She was probably already home writing some triumphant email about it…
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Can’t wait to see how the city council social engineers will determine which poor person will win the “high rise” lottery and get to live in the subsidized penthouse suite🙄
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Like the Zimmer tower. Make it a carbon neutral structure. No elevator. Only stairs. Cardio, cardio, cardio! (And strength training with that farmer’s carry utilizing reusable grocery bags, so there will be no skipping Leg Day.)
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@UncleJesse @dbearhugnc sheeesh y’all seem pretty damn bitter that a handful of below-market rentals are being included in two projects. I’m not exactly into the way the current CC is going about having more affordable housing included in new projects, but I certainly am NOT viewing affordable housing as a bad thing… I’d love to be able to afford to live where I spend most of time.
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I don’t think they’re viewing it as a bad thing, but a hastily thrown together “solution” for an issue that needs better solutions. There are plenty of examples of how tossing in “affordable housing” in a residential building that is otherwise designed as “luxury” causes more problems than it was designed to solve. I think it’s also possibly tongue in cheek but I won’t speak for them. I personally would have loved to see a contribution to a bond/fund and a well thought out program to provide dedicated affordable housing along a transit corridor where the cost of living doesn’t reflect the downtown core’s higher cost of living. Let me be clear, I don’t claim to have the answer and don’t believe I have the knowledge and education to write up the best solution, but I do think I am intelligent enough to know how it’s being handled in SmoHo3 and RUSBUS isn’t optimal.
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Well put! 20 characters
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Sarcasm aside. Raleigh and the City Council are navigating in uncharted waters. In the past, housing has been built in class segregated blocks - low, medium, and high. And, there are varying degrees of amenities. But, price points are also matched to land costs.
That which has been built at below-market value usually requires some degree of external subsidy to allow a break-even for the builder and subsequent owner, not to mention the lender.
This probably should go in the AH thread, but structures like this, SmoHo 3, and Zimmer are a new construct where there is internal subsidy going on with a mixing of resident classes in the same structure. And, it’s being shoehorned in to some of the more expensive land in Wake County.
So, the builder and the bank have to do the math and find a common set of finishes and amenities to make the final product a success. When, a decision is made to downgrade an amenity mix, then they have to put a positive spin on it.
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What I have an issue with is politicians trying to force feed some sort of social experiment down the throats of developers who, by the way, have to go to a bank/lender and say, “I need $100 million to build ‘project X’…oh and by they way, I can only lease 80% of that project a market rates…”
So people like stef mendell, etc; people who have NO clue what is required to develop a real estate project arbitrarily place requirements on builders/developers that could literally kill a project. My sarcastic ‘social engineering’ comment was meant to be tongue & cheek but also make a point. How, exactly does Stef Mendell propose these developers pick which poor person wins the housing lottery and gets to live in a high-rise? They don’t have answers for that question, further reinforcing my point about how clueless they are.
Maybe if the social engineering-city council wants to force affordable housing components on developers who actually live in the real world, they should be required to put together the financial model/P&L, explaining to JP Morgan Chase “HOW” and “WHY” they should provide $100Million in capital to a project that can’t achieve the “highest and best return” (actual finance terminology).
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In the end, 80% of local household incomes does not represent a poor household. Wasn’t there a presumed income level floating around in this community that talked about it being like $72K a year? Also, do we even know if the developer will fulfill their obligation by actually reducing rent, or by reducing the size or qualities of the apartments to meet the requirement? Maybe the reduced rent units don’t have granite countertops or stainless steel appliances? Maybe they have different floor finishes? IDK?..Speaking only for myself, there’s a lot of unknowns.
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The problem is that the city council has no understanding of what is required to seek funding for a project. Even if you put in ‘lower end’ furnishings, it still means you are not seeking the ‘highest & best use’ case, meaning you are not maximizing your possible return, which like it or not, that’s the name of the game in commercial real estate development projects.
Perhaps this math may still work to satisfy a lender (but it may not and can collapse a deal) The point is that you have city councilors trying to play ‘social engineers’ while taking no risk and appear to have no clue what is required to actually seek financing from a bank. Yet Mendell, Crowder, Stephenson & Co. are trying to dictate what they think is ‘politically correct’ scenarios and inject that into the real world instead of say, using the City’s own land and seeking their own financing to build ‘affordable’ housing.
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Two things …
- Nice use of SmoHo3. You owe @GucciLittlePig $0.02 in royalties.
- Have other cities made progress on increasing the supply of affordable housing? I think so. How did they do it? This isn’t proprietary stuff … cities that have successfully addressed such problems are more than happy to share! We do not have to solve every one of our problems in a vacuum.
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You are definitely right, and I agree this way of forcing affordable housing is definitely not the way to go.
But, I think it’s worth reiterating this is not for poor people (since you skipped right over that.) I think that is a misconception going around and I think it’s clear when the council talks about affordable housing, they aren’t talking about helping the poor. I think “more affordable” should be the term the council is using. I feel like we have a definition of affordable housing at this point.
And I don’t think we need it at all. We aren’t Seattle or Silicone Valley, where there is no affordable rents within an hour drive of the downtown core. I think the city needs to put a plan in place for the future, but we have no need for knee jerk affordable housing policies right now at this moment.
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I bet you hear less about affordable housing right after the election. They are pandering for votes right now.
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My biggest take-away from listening into 15 different city council streams is that Baby Boomer home-owners in Raleigh consistently do not want people of color and/or poor people living next to them. Since they can’t say that out loud without being labeled bigots they really, really hate having ‘renters’ live next door. Especially low income renters. Since ‘renters’ → people that can’t afford home ownership → a large subset of which are people of color/people historically affected by systematic and institutionalized racism in America.
Hence that boomer would rather have another gas station than affordable senior housing next door. It’s not about the traffic, it’s about the change in neighborhood composition.
Woah, the ghost of Jim Crow is alive and well.
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Yeah, that guy was definitely doing a “dance” to not say something that everyone in the room knew that he meant.
This is really, really true. If we are saying that affordable housing is for those qualifying applicants that make no more than $72K a year, then I call bullshit. Why does society owe a downtown residence to someone making that sort of income? The council tees this up like it’s going to help those being primarily displaced in east Raleigh as gentrification runs amok, but are these displaced people really going to be helped by these limited “affordable” options in new luxury towers? If so, I haven’t seen proof of it yet.
IMO, solving for the $72K a year household isn’t the problem that needs to be solved first.
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The breakdown of AMI for the Raleigh Metro this year is $74k for a family of four. For one person it is $52K which is still a decent salary but I think the point is to address deficiencies in what the private market has brought to bear for those under the AMI in our area and other urban areas around the country. It’s true though, that there’s a bigger need for housing for those around 30%-50% and less for 60%-80% but still a need nonetheless. 50% AMI is $46K for a family of four, $32K for one person.
I notice people moan and groan bringing up social engineering but are probably forgetting our country “social engineered” a lot of these folks out of opportunities for a very long time. And redlining still happens today and in more than one form - it may not be as race-based as it used to be, but certainly socioeconomic with less safeguards against predatory lending and so on.
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A lot of tools used around the country vary with state enabling legislation and local market nuances. Our GA in its infinite wisdom outlawed ‘inclusionary zoning’ which would have given the city the tool that others use to make requirements clear for developers. In some parts of the country developers even signed on to the idea because they want more clarity/predictability. The more I think of it, maybe this is what the Council is actually seeking to do in the long run and this is a way to encourage developers to sign on, could be giving them too much credit but possible.
Other tools like rent control are excluded here as well altho I personally think our market doesn’t need that at this point. I think the Feds/State could craft better tax credit programs. Opportunity Zones from the current administration have almost no guidelines/rules & will likely exacerbate these issues with the tax breaks going to higher end housing & glamor projects like Hudson Yards that likely would have happened regardless of the large breaks. The NC tax credit program, like many state/federal, is geared towards more rural areas, so Raleigh will be lucky to get one 9% deal every year or two.
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I think this is a fantastic point to make:
I don’t believe affordable housing is a solution for gentrification, in fact I don’t even think it’s a small component. Those being displaced don’t want to be displaced. It’s not about wanting an “affordable” place to move to.
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Does anyone have data on the actual financial impact of gentrification displacement east of DT?
I mean, do we know what people were paying in rent before the properties were sold out from under them? Also, do you know what their rent payments were “buying” in terms of size of home/number of rooms? It would seem to me that we’d want to know these things in order to understand the magnitude of problem that needs to be solved.
What’s going on today with the council passive-aggressively strong arming developers sounds more like creating workforce housing for early in career professionals who want to live near their DT jobs…not that figuring out that is a bad thing. It just seems to me that there are market solutions for that problem that others have already figured out like micro-housing units.