Title
Resolution Authorizing a Fund Balance Cap for the One Cent for Affordable Housing
Body
LEGISLATIVE INTENT/PURPOSE:
WHEREAS, on January 19, 2016, City Council approved the establishment of the City of Wilmington/New Hanover County Ad Hoc Committee on Improving Workforce/Affordable Housing (“Committee”), and charged the Committee with conducting a comprehensive examination of workforce/affordable housing and bringing forth a report on findings and recommendations; and,
WHEREAS, on June 18, 2019, the City of Wilmington and New Hanover County jointly created the Workforce Housing Advisory Committee (“WHAC”) to conduct a comprehensive examination of workforce housing efforts and recommend practices, policies, and programs to improve and increase the stock of available workforce housing in the region; and,
WHEREAS, in the FY22 budget, City Council assigned $3,500,000 from the General Fund balance to be available to appropriate at its discretion for workforce/affordable housing; and,
WHEREAS, in the FY23 budget, City Council established a policy to dedicate the value of one cent on the ad valorem property tax rate for affordable housing, and placed an additional $1,500,000 in the General Fund committed affordable housing fund balance, pending further direction from Council on its affordable housing use; and,
WHEREAS, City Council identified in the City’s 2017-2020 Strategic Plan a strategy to partner with developers and non‐profits to tackle the challenges of creating more affordable housing; and,
WHEREAS, City Council has identified workforce and affordable housing as a priority in the City’s 2025-2030 Strategic Plan; and,
WHEREAS, the one cent value dedicated for affordable and workforce housing funds programs leverages substantial private investments for affordable housing; and,
WHEREAS, in March 2021, the WHAC presented the jointly funded City of Wilmington and New Hanover County Housing Needs Assessment prepared by Bowen National Research (“Bowen Study”) in which the need for affordable rental housing was identified and quantified; and,
WHEREAS, the Bowen Study found that over 52% of renters in the City of Wilmington pay more than 30% of their income for rent, meeting the definition of “housing cost burdened”; and,
WHEREAS, the Bowen Study identified a need for approximately 4,153 rental units per year for households earning less than 80% area median income (“AMI”) during the period 2020-2030; and,
WHEREAS, the Department of Housing & Neighborhood Services has presented to City Council for adoption, a goal to create, preserve, and open the doors of 1,000 affordable and workforce housing units in Wilmington over four years; and,
WHEREAS, establishing a cap on carry-over funds allows available funds to be deployed for other important community needs; and,
WHEREAS, to ensure the consistent process for the calculation of the affordable housing fund balance cap, the calculation will be completed to coincide with the City Council’s annual Resolution Accepting the Annual Comprehensive Financial Report; and,
WHEREAS, staff presented a fund balance cap policy recommendation to City Council at the November 7, 2024, budget work session.
THEREFORE, BE IT RESOLVED:
THAT, the City Council establishes a policy of a fund balance cap of 2.5 times the value of the annual allocation of the one cent for affordable and workforce housing.