‘They’re being shut out’: New $47M housing project targets low-income workers in Apex
More affordable housing is coming to Apex.
Four years after approaching town officials to help identify a site, DHIC Inc., a local affordable housing developer, has begun work on Broadstone Walk, a 164-unit affordable housing complex on a 14-acre parcel along South Hughes Street in Apex.
The complex will include eight buildings providing one-, two- and three-bedroom apartments for households making 40% to 70% of the area’s median income — roughly $34,000 to $75,000 for a family of four.
It’s expected to be complete by May 2024.
For many who live and work in this pocket of the Triangle, it can’t come soon enough as runaway inflation, higher mortgage rates and soaring home prices drive many to the economic brink. As Apex’s population swells to over 62,000, demand for more affordable housing remains at an all-time high, Natalie Britt, DHIC’s senior vice president of real estate development, told The N&O.
“You’re talking about occupations like retail, health care workers, people working at call centers or day cares,” she said. “The incomes of low-wage workers are not going up at the same rate. They’re the backbone of our community, and they’re being shut out.”
Triangle median income is 70% of what it takes to buy a median-priced home, TMLS says
Last month, DHIC closed on a $35.5 million loan to kick-start the project. The deal, however, didn’t come without some hitches.
A spike in interest rates last fall created budget gaps and delayed the closing, said Victor Agusta, executive vice president at Bellwether Enterprise Real Estate Capital LLC, which originated the loan through a private placement on behalf of DHIC.
Ultimately, a mix of “creative deal structuring” from DHIC, along with some additional funds from the town of Apex and Wake County, made up the shortfall, Agusta said.
The total cost of the project is $47 million. DHIC received close to $7 million in financing from Wake County and the town of Apex. It also received equity from the sale of roughly $14 million in low-income housing tax credits, Britt said.
“The hardest part is making all the numbers work. We’re dealing with all the market forces. It’s really tough.”
The economics of affordable housing
DHIC’s challenges show how much harder it’s getting for developers of affordable housing in the Triangle’s red-hot real estate market. Soaring prices for land, materials and labor, coupled with rising interest rates, are driving up the costs to build housing at below-market rates.
“It’s very competitive,” Britt said. “But unlike market-rate developers, we can’t just increase our rents to cover the budget deficits, we’re restricted by certain income levels.”
At Broadstone, the lowest priced one-bedroom apartment is $690 per month. Compare that to the average rent for a one-bedroom apartment in Apex of $1,404, according to the latest data from rental listing site Zumper.
Last October, Wake County and Raleigh city leaders officially launched a $61.5 million affordable housing preservation fund that includes monetary support from financial institutions to make it easier. Apex has also launched its own Affordable Housing Fund.
Apex alone needs 2,000 affordable units, according to the town’s Affordable Housing Plan adopted in 2021.
“All the big tech companies that have moved here, like it or not, they’re kind of adding to the problem with the higher salaries and demand,” Britt said. “I’d love to see more of the corporate community stepping up to help us with this problem.”
DHIC has five projects underway in Raleigh, Durham and Apex that will add more than 600 units to the region’s affordable housing inventory, including Milner Commons, a 56-unit complex for seniors in Raleigh, and Ashton Place, a 52-unit complex in Durham.
