The city of Wilmington is putting up an extra $750,000 for affordable housing. Here's why.
An affordable housing project in the city of Wilmington is going to cost more than originally expected.
The Wilmington City Council has agreed to put up an extra $750,000 for the Starway Village project. The former site of the Starway Flea Market will provide 278 units for residents who make 60% or less of the area median income in New Hanover County.
The additional funding is needed for project developers, Bradley Housing developers and the Kelley Development Company, because of the rise in interest rates, said Suzanne Rogers, the city’s community development and housing planner. “It’s impacting the real estate industry as a whole,” she said.
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The city is already contributing $3.5 million in funds from the American Rescue Plan Act. That’s on top of $9 million in funding from Community Development Block Grant Disaster Recovery (CDBG-DR) that the project received from the North Carolina Office of Recovery and Resiliency. New Hanover County is also providing $1.8 million in funding.
The total cost of the project, located at 2346 Carolina Beach Road, is $75 million. It is the largest affordable housing development to receive funding from both the city and the county, according to Mayor Bill Saffo.
Because the project’s rent is capped at 60% of the area median income, the rising interest rates can’t be offset by simply raising rents, thus creating a “gap” in funding.
Rogers said the project will leverage $61.5 million in additional funding, outside of what the city and county have provided, from the community, private equity debt and other bond funding.
“I want the community to understand that without the support of local, state, and federal governments, it’s going to be difficult to get any of this stuff done,” Saffo said.
A city and county commissioned housing needs report states that Wilmington will need at least 4,000 rental home units in the next 10 years. “Fifty-two percent of renters in our community are housing cost burdened,” Rogers said.
This article originally appeared on Wilmington StarNews: Wilmington's Starway Village will receive more funding from the city
