Addressing Durham's Housing Crisis:
An Affordable-by-Design Model
Situation: During my five-year tenure on the board of Housing for New Hope, I gained profound insights into Durham's pressing housing issues - gentrification, displacement, and homelessness. Engaging with community housing leaders, such as Steve Schewel, Anthony Scott, Michael Rogers, Karen Lado, and organizations like Self Help, DFI, and DHIC, It became clear that we just have a critical housing supply-demand imbalance. The community was building about 1,000 units annually against a population growth of 6,000-8,000 people. The housing needs, mainly studios and 1-bedroom units, also starkly contrasted with the availability, mostly 3-bedroom units. While federal and municipal government and non-profits were activated, regulatory constraints and a lack of involvement from for-profit developers were glaring issues.
Task: As an impact entrepreneur, I aimed to alleviate low-income housing developers' pressure by showing that middle income housing can be scalable and profitable. The long term goal is to build about 2,000 middle-income housing units annually in Durham, addressing the supply-demand gap in one city and reducing gentrification and displacement rates by half. The first step, however, was to just create a model that could fill that gap in the market, sustainably.
Action:
Partnership Formation: Understanding that I couldn't embark on this alone, I began outreach efforts to find partners and was able to recruit to Christine Westfall, a local community developer with a shared vision and 30 years of experience, to the cause. We later found and recruited Steve Monti and Jim Falanga, impact investors in Raleigh, to help with fundraising and finance.
Resource Acquisition: We successfully acquired a 1.67-acre plot in downtown Durham by raising $2M from local banks and impact investors.
Initial Community Outreach: I launched a personal campaign in the startup, government and restaurants communities to figure out what folks working downtown were looking for in terms of housing type and affordability.
Project Conceptualization: We hired RCLCO to do a full market study based on our mission and hired MHA Architects and CJT Site & Civil Engineers to help shape our concept. By emphasizing smaller units and below-market parking ratios, our design plan consisted of 200 units, 168 parking spaces, and a 5000 sqft community-centric retail space.
Affordability: We estimate that 50% of these units would be affordable to households earning 70-80% of the Area Median Income, providing new downtown units at a solid $200-300 below market. The micro retail units would come in between $300-700/month.
Pre-development: After raising an additional $1M funding from a local partner, we fully designed the building and secured municipal entitlement. The project is now “shovel ready”. I personally managed the project through this phase, supervising the design team, hiring and managing vendors, running leadership meetings, and working with government and utility liaisons.
Micro-Retail Concept: I recruited Cameryn Smith, Dr. Danielle Spurlock, and Geraud Station to help concept and support the micro-retail experience. It will include a cafe, grocery, and additional 6 micro-retail units, providing affordable retail business opportunities for Black and Brown entrepreneurs in East Durham with wrap around support provided by CIP and Echo-NC.
Marketing Strategy: After many conversations with partners and our leasing consultants, we came up with a strategy to focus in on pre-marketing our community and offering leasing priority to people who work at targeted employers in and around Downtown Durham. This would help us achieve our goals of curating an inclusive community within the guidelines of Fair Housing.
Branding Initiative: I brought in Unbound (Dave Alsobrooks) to create a brand identity that would speak to our mission as well as it resonate with the local residents and workers we are hoping to attract to our community. I helped facilitate the process with our partners and lead the effort creatively.
Result:
Today, our fully entitled project is almost construction ready, with partners actively seeking financing. This venture is a testament to private investment potential to significantly address Durham's housing crisis and once underway, unlocks a host of follow up business and activist opportunities.
Scaling and Expansion
The second phase of this effort will be to begin acquiring 20-50 acre plots for horizontal development, then partnering with market, litc and non-profit developers to create mixed income walkable neighborhoods around retail/commercial cores. This model should generate 1000-2000 units at a time. Getting one to two projects like this underway each year should significantly mitigate gentrification and displacement in Durham.
Artifacts:
