Council Approves Plan to Develop Affordable Rental Housing for Families

During its regular meeting on January 17, Raleigh City Council authorized the City of Raleigh Community Development Department to begin negotiations with Passage Home for the development of affordable two-bedroom rental apartments for families with low and moderate incomes.

Forty percent of the 18 two-bedroom apartments, located on City-owned property at 1002 Coleman St., will be reserved for families whose household incomes are less than 50 percent of the area median income. The remainder of the units will be reserved for families whose incomes are 80 percent or less of the area median income.

The City of Raleigh will maintain ownership of the property, which was acquired with Neighborhood Stabilization Program funds, received by the City from the North Carolina Department of Commerce, Division of Community Investment and Assistance. Passage Home will receive a 99-year lease on the property for $1.00 a year, will be responsible for construction and will own and operate the apartments.

Construction funding will be, in part, through an $800,000 interest-free construction loan provided by the City of Raleigh Community Development Department from $950,000 in Neighborhood Stabilization Program 3 funds received by the City from the North Carolina Department of Commerce, Division of Community Investment and Assistance in June 2011. The construction loan will convert to a 30-year, no-interest mortgage on completion of construction. The Community Development Department also received approval from Council to provide up to an additional $400,000 interest-free construction loan if needed to complete the project. The project must be completed and occupied by February 2014.

Other possible funding sources are expected to include loans and/or grants from Wake County, a private foundation, and the Federal Reserve Bank of Richmond. Passage Home will also obtain a conventional mortgage from a private bank.

Three proposals were received by the City in response to the Community Development Department’s request for proposals distributed on September 9, 2011. The City of Raleigh Budget and Economic Development Committee selected the proposal submitted by Passage Home during its regular meeting on January 10.

Passage Home is a nationally recognized, faith-based, nonprofit community development organization that addresses poverty and homeless issues in Wake County. More than 1,000 families have received a hand up from Passage Home since its 1991 launch. Program services include housing and support services, economic development, youth development, and neighborhood revitalization.