City Council Starts with "Tiny" Step to Boost Affordable Housing, Promises Bigger Steps to Come
The Brevard City Council approved assistance to a developer of two "tiny" houses and plans to address affordable housing challenges -- which, as previous projects show, are daunting.
BREVARD — The Brevard City Council got a small start in its planned big push to address what a developer at Monday’s meeting called the “affordable housing crisis.”
A tiny start, as a matter of fact.
That developer, Annelise Hagedorn, requested that the city waive a total of $5,500 in utility connection fees for two “tiny” houses she plans to build west of downtown. In return, she pledged to rent them out at affordable rates for at least three years.
This could be the start of a much larger effort to address the city’s shortage of affordable housing, which was detailed in a presentation at the meeting from Blue Zones Project-Brevard, a healthy lifestyles initiative. Its report included news that the median sale price of a single-family home in Transylvania County had climbed to $389,000 during the first quarter of 2021, 38 percent higher than the year before.
Both City Attorney Mack McKeller and Council member Maureen Copelof said the forgiveness of water and sewer hookup fees for the two houses could serve as a model for other projects offering prices within the reach of working residents.
“I would basically like to put that in as a revised line in our fee schedule,” Copelof said.
It may also be one of many strategies discussed at a workshop devoted to addressing workforce and affordable housing that Council members agreed to schedule for next month, and that one of them, Geraldine Dinkins, said was long overdue.
“I get accused of being dramatic, so I’m going to be dramatic tonight,” she said. “The house is on fire and we’re still checking hoses, and we’ve been checking hoses for 10 years on this particular topic.”
The lack of affordable and workforce housing has emerged as perhaps the biggest issue in this year’s city elections, and Copelof, who is running for mayor, has positioned herself as one of its firmest advocates.
Mayor Pro Tem Mac Morrow, who is running for reelection, previously expressed skepticism about the seriousness of the problem, as well as a reluctance to swap utility revenue for lower-cost units. But after the unanimous vote to approve the deal with Hagedorn’s company, Sunnyside Properties LLC, Morrow said, “Excellent. Thank you.”
Copelof suggested using the Blue Zones report as a starting point for the discussions in October.
“We can take that document, which has the outline, the bones, and flesh it out and make it into actionable items,” she said.
Obstacles to Affordability
But the report not only listed possible strategies, including changes to the city’s land-use plan, but the many challenges to building affordable and workforce housing in Transylvania — challenges that are clear in the fate of several projects that had promised to bring or allow the construction of more reasonably priced units in the city.
Last spring, the city and county agreed to provide $300,000 in grants and low-interest loans to support the planned Falling Waters development on land at Rosman Highway and Nicholson Creek Road. The project’s 80 units would have been rented at rates affordable to tenants earning, on average, 60 percent of the county’s median income.
The local money would have helped extend city utility lines to the project, which developer Jim Yamin planned to finance with the help of highly sought-after federal Low-Income Housing Tax Credits.
He predicted that the state Housing Finance Agency, which distributes the credits, would give a high score to Falling Waters, partly because of both the local need for affordable housing and because no tax-credit projects have been built in Transylvania since 2013.
Falling Waters did indeed receive a high score, Yamin said, but the North Carolina Legislature failed to earmark money for a state program that is “kind of layered in with the tax credits to basically spread the them out among more projects statewide,” Yamin said.
That meant that fewer projects received subsidies, he said, and that Falling Waters just missed the cut when the awards were announced last month.
“I got every single available ranking point,” he said. “It’s just so darn competitive.”
But local support is vital, he added, and if the city can find a way to offer more aid, it would help the chances of such projects in the future.
“It’s always better if you can bring more to the table from state and (local) sources,” he said.
Also last spring, city Planning Director Paul Ray expressed high hopes for a project led by the non-profit, Hendersonville-based Housing Assistance Corporation (HAC). The city agreed to sell the organization a parcel of land on Cashier’s Valley Road at a bargain price in return for a pledge to build six “sweat-equity” homes for low-income families.
But the obstacles HAC faced are common in Transylvania, where there is a long-standing shortage of easy-to-develop lots, the Blue Zones report said. A Duke Energy power-line easement runs across the front of the property, Ray said, leaving only the steeper rear portion of the land available for development. This slope pushed construction costs out the reach of HAC, Ray said.
But there are still possibilities for the land, Ray said. A developer has approached the city to talk about building a multi-family development on this property combined with a portion of a nearby tract owned by Western Carolina Community Action.
The developer has not yet submitted a proposal, Ray said, “but supposedly he has engineers working on it and will provide us with some more concrete ideas.”
One idea firmly in place: running a sewer line to a neighborhood near Azalea Avenue and Old Hendersonville Highway.
A 2020 application for a $2 million Community Development Block Grant to pay for the extension was rejected because the Covid-19 pandemic prevented grant writers from collecting enough in-person signatures, said City Manager Jim Fatland.
Council approved a backup plan on Monday. Rather than wait until next spring to seek a grant from a Covid-19 relief fund, it approved a proposal from Fatland to immediately apply to a state utility-funding program. This would include money to pay at least 75 percent of the project and a low-interest loan to cover the remainder.
Fatland used the phrase “roll the dice” to describe the attempt to secure the grant, but said it actually stood a good chance because he expected few other local governments to apply during this cycle.
The extension could not only serve the neighborhood’s existing homeowners, whose septic tanks are failing, but open up lots for future development, the city has said.
A Limited but Proven Approach
Hagedorn told Council that her family-owned company has shown that small parcels present at least a partial means to address the shortage of affordable housing — at least for developers who want to make it happen.
A Transylvania native with a doctorate in rural sociology and demographics, she said her family-owned company is focused on providing affordable units because they see the pressing need.
The planned project would consist of a two-bedroom house renting for $800 a month, and a one-bedroom studio priced at $600.
Sunnyside could charge about $400 more per month for each unit on the open market, Hagedorn said, meaning the city will easily recoup its investment in the accumulated rental savings over three years — or, hopefully, much longer.
Sunnyside built two small one-bedroom houses on Hemphill Circle, near the site of the planned project on North Lane, in 2018. Since then, they have been rented out for $600 a month — continuously and at a profit, she said, if not at a “humongous profit like the short-term people are making.”
“This is just a tiny Band-Aid on the affordable housing crisis,” she said. “But it’s something that (shows) we as private individuals . . . can participate in this process of building a better community.”