Dare commissioners approve housing agreements
Published 1:22 pm Wednesday, September 14, 2022
The Dare County Board of Commissioners unanimously approved agreements on Tuesday, September 6 that will move affordable housing projects forward.
The commissioners first approved a memorandum of agreement with Woda Cooper Companies, Inc. That agreement spells out the terms of the project to build 100 housing units split between two parcels. Accompanying the agreement are a conditional commitment letter and a ground lease.
The second action is a pre-development agreement with Coastal Affordable Housing LLC. The agreement moves $5 million to the developer for pre-development costs.
The two projects are very different in financing.
Woda Cooper will use two identified sites: the Bowsertown Road site on Roanoke Island and a 4.7-acre vacant parcel known as the Nags Head site at 100 E. Hollowell Ave. The agreement calls for Woda Cooper to build 100 housing units, which will be split between the two sites.
Woda Cooper proposes a mix of 24 one-bedroom units, 66 two-bedroom units and 10 three-bedroom units. The final mix will be determined in consultation with Dare County.
Dare County has pledged $9 million to the Woda Cooper project. Woda Cooper will leverage the county funds by qualifying for a North Carolina Housing Finance Agency 4% Low Income Housing Tax Credit tax-exempt bond.
The units are restricted to two people per bedroom and rent amounts will be determined by AMI, or area median income. In calculating AMI, total household income is used.
For the one-bedroom units, rents are projected to be $440 at 40% AMI for eight one-bedroom units; $730 at 60% AMI for another eight one-bedroom units; and $1,025 at 80% AMI for eight one-bedroom units.
For two bedroom units, rents are projected to be $515 at 40% AMI for 22 two-bedroom units; $875 at 60% AMI for another 22 two-bedroom units; and $1,200 at 80% AMI for 22 two-bedroom units.
For three bedroom units, rents are expected to range from $585 at 40% AMI for three three-bedroom units; $990 at 60% AMI for four three-bedroom units; and $1,380 at 80% AMI for three three-bedroom units.
As of April 18, 2022, an annual salary projection for one person at 60% AMI would be $33,180 and at 80% AMI would be $44,240. An annual salary projection for two people at 60% AMI would be $37,920 and at 80% AMI would be $50,560. Calculations were provided to Woda Cooper by Novogradac.
Dare County already owns the Bowsertown Road property. The county will also eventually own the Nags Head site, which was acquired for $3.7 million. County ownership of the land guarantees that the housing remains affordable for the life of the 65-year ground lease.
The agreement calls for up to $1 million in pre-development costs.
Woda Cooper will pay the fee of 1% of the total budget for the Bowsertown Road site to the University of North Carolina Chapel Hill School of Government, Development Finance Initiative.
Woda Cooper intends to begin construction mid-2023 and finish the projects in 2024.
Coastal Affordable Housing LLC is now operating under a pre-development agreement. It is anticipated that a development agreement will be approved for construction and for operations of the project.
Coastal Affordable Housing has an initial project phase of 300 to 400 multifamily housing units at one site or multiple sites to be identified. The final site or sites must have the approval of Dare County.
Coastal Affordable Housing will use the $35 million allocated by the North Carolina General Assembly, called legislative funding in the agreement, to “secure the primary, permanent debt financing necessary to complete the project.”
In this agreement, the pre-development costs are set at $5 million.
The legislative funding comes as a forgivable loan. The developer must provide “affordable housing at a cost-savings between the usual market rate for the housing of the type developed which rate shall be determined jointly by the County and Developer, and a lower rate, which shall be set by the developer …”
The difference between the market rate and the reduced rate is the cost-savings, which are applied to the loan amount annually as loan forgiveness.