Chapel Hill Moves Affordable Housing Forward With $10 Million Tax Credit

GOVERNMENT

By Michelle Cassell
Correspondent

The Town of Chapel Hill received a $10 million low-income tax credit that should cover most of the cost of redeveloping the Trinity Court Community for affordable housing. With this credit, which operates similarly to a grant, the town will be able to demolish and reconstruct the community with 54 affordable housing units.

“For me, this is a win-win-win for everyone,” Town of Chapel Hill Mayor Pam Hemminger told The Local Reporter (TLR) Wednesday morning.

Trinity Court, a public housing community, was built in 1975, originally offering 40 residential units, so the proposed redevelopment will gain 14 units. The Town of Chapel Hill vacated the community in 2018 due to structural deficiencies and the deterioration of buildings. In May 2020, the Town began planning its redevelopment.

In June 2021, the Town of Chapel Hill signed an MOU with Community Housing Partners (CHP) to lead the reconstruction effort of the property. CHP Affordable Housing Development Officer Emily Holt said, “With construction costs increasing and rents having to stay flat by regulation, it is challenging to make housing affordable.”

Holt said when the project began, the estimated cost was $11.5 million. “Interest rate hikes, expenses going up on materials, [and] labor and supply chain issues increased the budget to $14 million to complete the project,” she explained. “Rents have to be based on Area Median Income (AMI). You can go up to 80% of AMI. So if construction costs go up … you have a big gap there. That is why this $10 million will enable us to move forward.”

“This is great news for our community,” Hemminger told TLR. “ A great deal of thought and planning went into this project. It takes advantage of Town-owned property in a great location to add more affordable houses for families in Chapel Hill.”

The Town of Chapel Hill developed a strategy to use Town-owned land to help support affordable housing development in their 2020 Comprehensive Plan. The new 54 affordable housing units will serve households earning incomes at or below 30% of AMI.

With the cost of what is known as the “Re-Imagine Trinity Court” initiative projected at $14 million, the $10 million award will cover a little over 71% of it.

The Trinity Court  community is on the edge of the Northside neighborhood, looking out over 10 acres of wooded Town land near Umstead Park and the Tanyard Branch Greenway Trail. It is within walking distance of Northside Elementary School. There are bus stops nearby for Chapel Hill Transit.

“We are so thrilled and hope to break ground next summer,” said Holt. ”The tax credit brings with it a strict timeline that requires construction to start about a year after it is awarded.”

The tax credit process works by the Town submitting low-income properties that could be eligible for tax credits in Orange County. Not all submissions receive awards. The Taft Mills and Indigo projects did not land awards this cycle. The next tax credit cycle will be in 2023.

Michelle Cassell is a seasoned reporter who has covered everything from crime to hurricanes and local politics to human interest over the course of 35 years. As assignment editor, she hopes to encourage writers of a wide range of backgrounds and interests in TLR’s coverage of southern Orange County news.