Chapel Hill has a partner for affordable housing by future park. Here are 5 things to know.

A development partnership announced Friday will help hundreds of families and individuals find housing they can afford next to a public park in Chapel Hill. .

The town is partnering with Raleigh-based DHIC Inc. to build affordable housing on the Legion property, just outside Chapel Hill’s Blue Hill mixed-use district off Fordham Boulevard.

Though some town residents wanted the whole site to become a park, the Chapel Hill Town Council voted last year to build affordable housing on a quarter of the 36-acre site, leaving the rest for a park and nature preserve.

Chapel Hill previously worked with DHIC to develop 149 affordable family and senior apartments at Greenfield Place and Greenfield Commons, about a quarter-mile from the Legion site. Those apartments were built on 10 town-owned acres that previously were designated for expanding the Chapel Hill Memorial Cemetery.

What’s the history of the Legion property?

▪ American Legion Post 6 decided to build a new headquarters in rural Orange County and offered the town an opportunity to buy its longtime headquarters at 1714 Legion Road in Chapel Hill. The town declined to buy the land in 2015, but after an election overturned the mayor’s office and council seats, agreed to the deal.

▪ The town paid $7.9 million, using cash and voter-approved parks bond money that delayed other parks and recreation projects already in the pipeline. The town’s initial discussion included the possibility of building a park, as well as housing and some retail on the site.

▪ A task force considered how the site might be used. Although it wasn’t part of the task force conversation, many residents also voiced support for affordable housing. The pandemic then delayed the plans.

▪ In 2022, the council’s Legion Property Committee recommended the town build housing and a park on the property. The council voted in December to move ahead with affordable housing on nine acres and combine the remaining 27 acres with the adjacent, 12-acre Ephesus Park on Ephesus Church Road. The park site includes an 8.6-acre, undeveloped buffer and a stream.

What is the housing plan?

▪ The preliminary concept plan is for 160 housing units at 1714 Legion Road.

▪ Units would be priced for individuals and families at less than 60% of the area median income, which is determined annually by U.S. Housing and Urban Development officials.

▪ Chapel Hill’s AMI is $116,200 for a family of four in 2023. The units would serve an individual earning up to $42,480 a year or a family of four earning up to $60,660. The town’s AMI will likely increase before leases can be signed.

▪ DHIC also provides housing support and mental and emotional health services to its residents.

What they said: “In Chapel Hill, every affordable housing partner has waiting lists that continue to grow. The need is clear and the more units we can get in the pipeline, the sooner those needs can be addressed,” said Sarah Viñas, the town’s director of affordable housing and community connections.

Why is the housing project important?

Financial experts agree individuals and families should only spend about 30% of their annual income on housing and utilities. In Chapel Hill, 60% of renters and 17% of homeowners spend more than 30% of their income on housing costs, according to town data.

▪ The average rent in Chapel Hill this past year was over $1,700/month for a two-bedroom apartment, the town reported. The average home sales price was over $651,000.

▪ The town estimates it needs 1,900 additional rental units to serve residents earning less than $50,000 a year. There are 830 affordable units proposed or under construction now, the report said.

▪ Chapel Hill requires developers to include up to 15% affordable housing when they build houses for sale, but state law prevents the town from requiring affordable units in rental housing. The town does negotiate with developers to get affordable rental units, usually for up to 30 years and often only for individuals and families earning up to 80% of area median income.

▪ DHIC has 4,200 affordable housing projects completed and underway across the Triangle, according to Friday’s news release.

How will the town pay for the project?

▪ The council approved a Comprehensive Affordable Housing Plan and Investment Strategy in September that would dedicate $30 million to $50 million over the next five years to develop up to 900 new, affordable homes and preserve another 400 homes through purchases and critical repairs.

▪ The town has multiple ways to pay for projects, but it’s facing a $30 million funding gap to sustain its affordable housing program now that a $10 million voter-approved bond has been spent and the existing affordable housing funds are largely tapped.

▪ The largest regular source of affordable housing funds for Chapel Hill is a penny on the property tax rate, or roughly $958,000 a year.

▪ The town also gets payments from developers who don’t include affordable housing in their projects and works with nonprofit partners to leverage the town’s money and land with nonprofit funding sources, such as grants, to build more housing.

▪ The Legion Road project could compete with other projects for a federal low-income housing tax credit. Orange County typically has just one project selected each year because it is considered a high-wealth county.

What’s next for the project?

▪ The process to approve and build the housing could take three to five years. The town will work with DHIC on a concept plan, which the council will review to provide feedback.

▪ Multiple meetings will be held to hear from the project’s neighbors and community members.

▪ An official plan will be submitted for additional reviews and public hearings, including before advisory boards and the council, which will make the final decision about what is built.

▪ More detailed building plans will be submitted to town staff for review and approval, and the inspections department will work with DHIC to make sure the project meets the town’s requirements as the housing is built.

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