TAKING ACTION
Town of Wake Forest | HOUSING AFFORDABILITY PLAN
Strategy 2: Create New Affordable Rental Housing
Public Land Disposition
Program Overview The Town can sell publicly-owned land to developers at a reduced price in exchange for their development of affordable homes. Reducing land costs lowers the amount of rent that is required to ensure feasibility of rental projects (Figure 49). This strategy can also reduce the sales price of owner-occupied units. The Town should determine the sale price based on the share and level of affordability that the developer will build. In some cases, providing the land for free might be appropriate in exchange for a higher share of affordable units and price points. The Town has already identified two sites that may be well-suited for residential development and has begun the process of evaluating different programs for the sites. The following pages demonstrate how these sites might be used, in partnership with developers, to develop both affordable rental and homeownership opportunities. The development concepts presented are hypothetical concepts, not approved plans, and will continue to be evaluated based on the feasibility of development, the housing priorities of the Town and community feedback. How Does it Work? The Town could sell or grant the land to a housing developer or community land trust as public subsidy to reduce the cost of development, in exchange for affordable housing on-site. Using this approach, the Town can decide on a priority program for the site, including populations served and affordability levels.
REQUIRED RENT WITHOUT LAND COSTS REQUIRED RENT WITH LAND COSTS Land costs savings allow projects to be viable
FIGURE 49: PUBLIC LAND DISPOSITION DIAGRAM
AFFORDABILITY GAP
Developer Profit
Rent a Household Can Pay at 60% AMI
Operating Expenses
*LAND COSTS REMOVED
Soft Costs
Financing of Development Costs
Hard Costs
INITIAL DEVELOPMENT COSTS
POST CONSTRUCTION OPERATING COSTS + PROFIT
REVENUE GENERATED BY DEVELOPMENT
IMPLEMENTATION
1. Develop a land inventory or identify parcels that are well suited for residential development based on size, location, environmental conditions, and other factors. 2. Finalize program requirements for affordability, including target households, level of affordability, and unit mix. 3. Develop a request for proposals (RFP) and set criteria for evaluating developer responses.
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