Summary: Proposed process for examining permanently affordable housing options for the City. Permanently affordable strategies for homeownership have not been widely employed here. Examples of methods used elsewhere include Community Land Trusts, Limited Equity Cooperatives, and deed-restricted ownership.

1. STAFF REPORT
TO: HCD Committee
DATE: April 12, 2016
FROM: Jeff Staudinger, Assistant Director, Community and Economic Development
SUBJECT: Proposal For Exploration Of Permanently Affordable Housing Alternatives
Summary: Proposed process for examining permanently affordable housing options for the
City.
Review: Recommendations for Asheville to incorporate permanently affordable housing into its
affordable housing strategy were made in both the Affordable Housing Scorecard and the
Alternatives to Gentrification reports. Ongoing conditions noted in these reports affecting long-
term affordability in the city continue. These include the post-recession recovery of the single-
family for-sale market; the continuing escalation of prices in historically low-income
neighborhoods; the continued weakness of the credit market for condominiums and other
space-efficient housing; the strength of the rental market, with significant supply deficits at
prices affordable to low and middle income households; the emergence of short-term rental
demand; and the growing wage/cost of living gap.
This is exacerbated by the decline of federal and state funding for housing, creating increasing
pressure on local governments to fund affordable housing. Public officials are concerned about
the value of those subsidies over time, and whether they bring maximum benefit to lower
income persons.
Adopting policies and strategies that lead to public and private investment in permanently
affordable housing can help address these concerns. Asheville already has made a strong
commitment to permanent affordability in rental housing production, by investing significantly in
Low Income Housing Tax Credits (LIHTC) developments here, which require a minimum 30
year period of affordability. The non-profit developers in Asheville (MHO, National Church
Residences, Volunteers of America) all have indicated their commitment to extend affordability
past the minimum required period. While mechanisms to do so have not yet been fully explored,
they will be more in focus as developments approach their 30 year affordability end date.
Permanently affordable strategies for homeownership have not been widely employed here.
Examples of methods used elsewhere include Community Land Trusts, Limited Equity
Cooperatives, and deed-restricted ownership.
The Housing and Community Development Committee (HCD) has asked staff to design a
program that would enable community members and elected officials to explore the range of
strategies that could be employed to create permanently affordable housing. The Alternatives
to Gentrifications report outlined a process for this. Staff sees that the City could play an
important role in facilitating community discussion through that process. The elements of this
include:
1. Sponsor a series of community forums exploring the tools available for permanently
affordable housing; their effectiveness in other communities, and their applicability to
Asheville;

2. 2. Establish a community-based steering committee, with broad representation and
inclusive of a range of stakeholders, including residents of low-wealth neighborhoods,
artists, public housing residents, non-profit developers and other interested community
members;
3. Assess the costs and benefits of the various models;
4. Make a recommendation for the use of the strategies in Asheville.
Community Forums
We suggest three forums, each exploring a different set of permanent affordability issues.
These would be:
1. Permanently affordably homeownership, through deed restrictions and the Community
Land Trust model. We would suggest bringing in staff from successful NC-based CLT’s,
including the Community Home Trust in Orange County and the Durham Community
Land Trust.
2. Permanently affordable cooperative ownership. While less widely practiced, this method
could be used to create multi-family housing options, and to be considered as a method
for conversion of public housing. An expert would be sought to lead this discussion.
3. Permanently affordable land and facilities for community use, including for use as urban
agriculture and artist work space.
The forums could be held over three successive months. A June 2016 start date is possible.
Community Steering Committee
A community steering committee would be formed from persons attending the forums and
expressing interest in permanently affordable housing. The steering committee would begin
meeting in the fall. City staff will initially facilitate the process, with the intent of handing off the
process to community leadership by early 2017.
Assess Costs and Benefits
The steering committee, assisted by staff, will assess costs and benefits of the various models.
This will include required capital, operating costs and other costs required to acquire or
otherwise control the affordability of housing. The committee will also assess benefit, including
the avoided cost of subsidy over time (if possible), the income of households to be served, and
the impact on existing neighborhoods.
Committee Recommendation
The steering committee will determine its future direction and make recommendations to elected
officials as relevant and appropriate in the winter/spring of 2017. Recommendations could
include requests for resource allocation (i.e. funding, property), organizational structure, policy
direction and participation.
Recommendation: Staff recommends discussion and approval of a process to explore
permanently affordable housing options.