Town of Chapel Hill Continues to See Affordable Housing Progress

GROWTH & DEVELOPMENT

By Adam Powell
Correspondent

CHAPEL HILL–Earlier in October, the Chapel Hill Council discussed the fiscal year 2025 affordable housing report. Town staff, including Affordable Housing and Community Connections Director Sarah Vinas and Affordable Housing Manager Emily Holt, highlighted progress towards developing 900 units of affordable housing throughout Chapel Hill, while also preserving 400 units of affordable housing over the next five years.

Chapel Hill’s Affordable Housing Plan is centered around four central goals: reducing barriers to building homes, expanding and preserving homeownership in Chapel Hill, expanding and preserving rental housing, and increasing staffing and funding capacity.

“The affordable housing plan that Council unanimously adopted in September of 2023 provides our roadmap for our affordable housing work over the next five years,” Vinas stated to town leaders on October 8. “Over the past year of our Affordable Housing Plan, we’ve made a lot of progress in implementing our plan, with 11 out of our plan’s 14 recommendations either completed or underway.”

The report noted that housing costs are stabilizing, with approximately 40% of households in Chapel Hill still experiencing a housing cost burden. The town has approved 1,200 units annually over the past five years, with 16% of these units being affordable. They completed 62 affordable units last year, preserving affordability for low-income households.

“From 2020 to 2022, we saw dramatic increases in housing costs,” Holt explained. “The last two years, housing costs have started to level out. Home sale prices are still increasing, albeit at a slower rate, while average rents have plateaued, despite an increase in income. High housing cost burden remains.

Holt indicated that with about 40% of all households throughout Chapel Hill dealing with housing cost burden, ‘that means they’re paying more than 30% of their income on housing,’ she explained.

“When you look at very low-income households, that number rises to 90%,” Holt continued. “We do still have a large gap in the number of housing units for low and very low income households, and home ownership remains mostly out of reach for low and moderate income households.”

While average home sale prices increased by 64% since 2020, they’ve risen by just 8% in the last two years, Holt explained.

In 2020, the average home sale price in Chapel Hill was approximately $431,704. Fast-forward to 2023, and the average home sale price in Chapel Hill had increased to $651,375. In 2025, the average increased further to $706,058. Over the same period, average rents in Chapel Hill increased from $1,398 in 2020 to $1,714 in 2023 and $1,759 in 2025.

“Average rent increased 26% since 2020, and they’ve leveled with only a 2% increase in the last two years,” Holt indicated. “Also, the local housing inventory is increasing. We’re building our local inventory of affordable housing, as well as housing in general. The latest survey data from 2023 shows small upticks in the housing inventory. So the difference between 2022 and 2023 was actually the largest, and it was only three and a half percent that we’ve seen in a decade.”

As new years of data have been released in recent years, town staff in Chapel Hill have also seen a boom in development interests in the area, as Holt explained.

“Council has approved an average of 1,200 units a year over the past five years, and 16% of those have been affordable,” Holt told members of the Town Council. “As a comparison, in the previous six-year time period, between 2013 and 2019, the council approved 3,600 units. About 7% of which were affordable.”

Of the town’s housing units that were approved since 2020, approximately 62 affordable units have either been completed or are currently under construction.

“So over the last year, we saw larger projects start to open after years of planning,” Holt explained. “So lately, in years previous, we’ve seen pretty low numbers of units developed while a lot of behind-the-scenes work was happening. This year, we saw an uptick (in construction). Much of our affordable housing work focuses on supporting low-income households to stay in their homes and keep them affordable. This work often carries success stories that aren’t always visible in a pretty picture of a new building.”

In fiscal year 2024, approximately 11% of the units approved by the Town of Chapel Hill in market-rate projects were affordable, including Old Chapel Hill Road Apartments.

“We made additional resources and funding tools available, (and) we secured additional bond funding,” Holt explained. “We launched the Affordable Housing Loan Fund. We supported our partners with an almost $3 million funding plan that the council approved for fiscal year 2025, and released another $4 million in local funding. And we supported DHIC (Durham Housing Improvement Corporation) to secure another 9% Low Income Housing Tax Credit award.”

This year marks the fourth consecutive year that Chapel Hill has received a tax credit award to promote affordable housing. Together, a series of four affordable projects currently underway will bring more than $40 million in tax credit equity to the town, and together they’ll create 200 affordable apartments.

“So each tax credit award brings about $10 million in tax credit equity,” Holt indicated. “So for four of those (projects), it’s it’s more than $40 million.We expect as many as 1,200 affordable units to be completed over the next five years, including many that you’ve been hearing about for a long time. That number would essentially double the number of subsidized affordable units we have in our inventory right now. As a comparison, in the past five years, we completed about 120 units in that time. Council also approved almost 300 affordable units for the second year in a row. That includes mostly 100% affordable projects (such as) Hillside Trace and Maddry Meadows, but it also includes affordable units in market-rate projects.”

Along with receiving an update on affordable housing progress and trends in Chapel Hill, the council also discussed the potential for master leasing and rental assistance, as well as the need for additional funding and resources to support these initiatives. Chapel Hill’s Affordable Housing team recently onboarded three new staff members, bringing them to a fully staffed team.

Staff gave town leaders a snapshot of the affordable housing initiatives and projects that will be at the forefront of the team’s attention over the next year.

“We will allocate resources to partners and boost our staffing capacity,” Holt stated. “You all (the Town Council), a few weeks ago, approved a $4.185 million funding plan (as part of the 2025-2026 fiscal year budget). Pending the federal budget approval, we’ll find out whether we got a community project funding grant from the federal government.

Affordable projects previously approved by the council at Legion Road and South Elliott Road will continue to help Chapel Hill drive towards its long-term goals in affordable housing.

“For the Legion Road project, and the South Elliot project council approved last spring, which had a one and a half million dollar affordable housing contribution, should that project move forward, that puts us at about 60% of our goal. That’s about $23 million more (in funding) than we would have we had before the affordable housing plan was approved.”

“Next year, Chapel Hill Affordable Housing staff will continue building its affordable housing inventory.

“We’re looking forward to the opening of Trinity Court,” she said. “Also to the groundbreaking on Tanyard Branch Trace and Homestead Gardens. And we’re going to keep making headway on the plan to develop 150 units at the Legion Road property. We also expect council to consider approval of projects (in the coming months) that could include as many as 250 (additional) affordable units.”

“This year, we will also continue to preserve the affordability of existing units,” Holt continued. “This includes programs that support low-income homeowners, like down payment assistance and rehab funding. We will also continue working with the county and towns to identify creative solutions to households facing housing crises and instability. We will complete a repositioning plan for our public housing inventory and identify tangible next steps for the implementation of our manufactured homes action plan. Finally, we will continue to expand our education and outreach efforts.”

Adam Powell has been a correspondent for The Local Reporter since 2023. A 2001 graduate of UNC-Chapel Hill, Powell has served as managing editor of multiple local publications, including the News of Orange County, the Mebane Enterprise, the Caswell Messenger, and the ACC Sports Journal. Powell has won more than 20 North Carolina Press Association Awards throughout his journalism career for Excellence in Education Reporting, Excellence in Sports Columns and Features, and Excellence in Video Production. He has also been recognized by the North Carolina School Public Relations Association (NCSPRA) for Excellence in Education Writing and for his newsletters representing Rockingham County Schools and the North Carolina Cyber Academy. The author of four books. Adam currently resides in Mebane with his wife Julie and children Colt and Jenna. This reporter can be reached at:Information@TheLocal Reporter.press