February 22, 2024

Housing Finance Development

It's Your Housing Finance Development

Transit-Oriented Development Provides Affordable Housing in Durham| Housing Finance Magazine

Willard Street Apartments is a transit-oriented, mixed-use development in Durham, North Carolina.
Sterling E. Stevens Design Photo
Willard Street Apartments is a transit-oriented, mixed-use development in Durham, North Carolina.

A new transit-oriented, mixed-use development has risen in the heart of downtown Durham, North Carolina.

Willard Street Apartments, developed by DHIC and Self-Help Ventures Fund, brings 82 much-needed affordable housing units to the rapidly growing and gentrifying city. With strong migration over the years, upward pressure on the area median income (AMI), and rising rents, existing residents have been displaced and naturally occurring affordable housing has been lost in the city and region, according to Michael Rodgers, director of real estate business development at DHIC.

“At the rate affordable housing is being built, it isn’t even close to keeping up with demand,” he adds.

When the city had a small parcel of land left over after the construction of a transit station designed by acclaimed architect Phil Freelon, advocates pushed for the surplus to be used for affordable housing. DHIC and Self-Help won the RFP, with the city contributing the land.

One-quarter of the units are for households earning 30% of the AMI, and the remaining units are for those at 60% of the AMI. Rodgers says the pent-up demand for this housing was evident when over 1,000 people put their names on the interest list for applications within a few days, and the property quickly leased.

The location provides accessibility for residents. “There is a significant number of job opportunities in walking distance, plus being next to local and regional transit allows people to commute to Chapel Hill, Hillsborough, Raleigh, and Durham.”

Another feature for residents is the nonprofit dental clinic, Local Start, which operates in the ground-floor commercial space owned and managed by Self-Help. It provides sliding-scale dental services and serves as a training venue for University of North Carolina dental students.

“It has great synergy with the affordable housing immediately above it, and it’s a socially beneficial enterprise in that space,” notes Rodgers.

According to Rodgers, another amenity for residents is free wireless high-speed internet as part of their rent. The move was made at the outset of the development and proved to be crucial when lease-up began in the middle of the pandemic. “That allows families and other households to do remote learning and remote work with really high-quality internet services that they may otherwise might not have access to.”

The $21.1 million development was financed with 9% low-income housing tax credits awarded by the North Carolina Housing Finance Agency and syndicated by RBC Capital Markets. The permanent financing was a Freddie Mac forward commitment through PGIM. Additional financing was provided by the city, Duke University, and the A.J. Fletcher Foundation. In addition, the Durham Housing Authority has provided 21 project-based rental vouchers through a Rental Assistance Demonstration conversion.

Additional partners on the development include architect Cline Design Associates and general contractor WeaverCooke Construction.

“The overall impact has been very positive, but it’s just a drop in the bucket,” Rodgers says. DHIC and Self-Help expect to close on financing and start construction in November on the second phase of the development, Ashton Place. It will provide 51 units for seniors 55 and older with incomes between 30% and 60% of the AMI.

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