DAVIDSON – Developers who opted to pay money instead of build certain types of affordable housing are being offered a temporary discount for money owed, which is considered a win-win for them and the town.
The board agreed June 10 to send a letter to developers offering a 25 percent decrease on owed payment. Developers wishing to participate have 30 days to respond and 90 days to pay.
Town rules require developers to build homes in their developments that are affordable to those whose family income is 50, 80 or 120 percent of the average household income. Developers do have the option of providing a payment in lieu for the units meant for those with an income of less than 50 percent. Those who qualify for this housing would be a family of four with an income of $32,100.
Depending on when the developments were approved, town ordinances stipulate payments can be made after a certain percentage of development is complete or once the project is finished, which could take years. According to data given by Affordable Housing Coordinator Cindy Reid, the town is owed more than $2 million.
Reid approached the board in May about offering a 25 percent discount to help developers and get the money in. She said, because the economy is getting better, it is more difficult for developers to meet the requirements of building homes for the 50 percent income bracket because they lose money on the construction. Plus, she has been told their payment in lieu is too high.
Reid said that it is also harder for families at this income level to be approved for mortgage loans, which means they may not be able to buy the homes if built. Instead, it would be better to have more opportunities for families to rent.
The town is in talks for a possible partnership with the Charlotte Mecklenburg Housing Partnership to buy the Lakeside Apartments and turn them into affordable housing. If purchased, Reid said they would need to be completely renovated. Money generated by offering the discount would be used for this initiative.
Commissioner Rodney Graham, a developer who has participated in the payment in lieu program, said instead of recusing himself from the vote, he would decline taking advantage of the discount so as not to appear to be getting financial gain.