Asheville City Council

“There’s no way I can look the community in the eye and and say that 180 [thousand] is truly affordable.”

— Mayor Terry Bellamy on affordable housing

Proposed changes to the city’s Housing Trust Fund guidelines — a source of no- or low-interest loans to developers building low-cost housing — stirred a Council debate on affordability at the Asheville City Council’s April 25 formal session.

Three changes proposed by city staff were intended to bring the the 6-year-old fund more in line with prevailing market conditions. But two of those ideas were thrown back to staff after some Council members said they strayed too far from the trust fund’s intended purpose.

The trust fund was established in 2000 with an initial city contribution of $400,000. Last year, Council allocated $600,000 to the fund. To date, 113 homes have been built, and another 359 are in some stage of development, Caplan told Xpress. All told, the revolving fund has now swelled to $3.15 million (including current loans).

Perhaps the most controversial proposal called for raising the maximum sale price of homes built using trust-fund money. The current limits range from $95,000 to $150,000, depending on the size of the unit. But the proposed adjustment, which would up those prices to $105,000/$180,000, stopped Mayor Terry Bellamy in her tracks.

“There’s no way I can look the community in the eye and and say that 180 [thousand] is truly affordable,” she told Community Development Director Charlotte Caplan. “Seventy [thousand] to 110 [thousand], that’s where it’s needed.”

Bellamy is the marketing and development manager at Mountain Housing Opportunities, a local nonprofit that often takes advantage of Housing Trust Fund money to build low-cost housing. MHO Executive Director Scott Dedman also questioned these figures.

Those numbers, noted Caplan, are consistent with federal Department of Housing and Urban Development guidelines, but that didn’t impress Council member Robin Cape. “I think we are all shocked at what HUD says is affordable,” she observed. In fact, that is not the upward limit of what the agency guidelines allow, Caplan told Xpress.

Another suggestion — exempting certain developments from the price caps — also failed to rally Council support. The only proposed change that Council members even voted on calls for doubling the trust fund’s maximum loan size, from $250,000 to $500,000.

“Loans need to be able to support really big projects that get a lot of mileage,” noted Council member Brownie Newman.

Larger projects are needed, added Bellamy, as folks who work downtown are getting priced out of the city and wind up moving to outlying areas. “I think people who work inside the city should be able to live in the community,” she said.

Council member Carl Mumpower, however, roundly rejected the very existence of the fund. “It is forced taxpayer participation,” he asserted. Additionally, Mumpower questioned whether affordable housing even fits in today’s downtown. “Right now, we are trying to build big, nice and affordable. It may not fit into the equation,” he said.

But Mumpower found himself the odd man out, as others rushed to the trust fund’s defense.

“We need to be real careful when we talk about dissolving the Housing Trust Fund,” cautioned Council member Bryan Freeborn.

Mumpower also questioned the ethics of increasing the maximum loan amount, given that another agenda item proposed lending that exact amount to MHO. Originally earmarked for the consent agenda, that item was postponed so that it came up immediately after the new $500,000 loan maximum had been approved.

“We’re changing a policy and immediately thereafter approving a project for almost exactly that amount,” noted Mumpower, adding that the mayor’s role as a decision-maker at MHO smacked of impropriety.

But that observation didn’t sit well with his colleagues. Bellamy regularly recuses herself from votes affecting the nonprofit, Cape shot back. And Council member Holly Jones likewise took umbrage. “The insinuation of impropriety is unfair, and I’m calling it out,” she declared.

After the first two parts of the proposal had been sent back to staff for more work, Bellamy did recuse herself, leaving the chamber for the vote on increasing the loan amount. That measure passed 4-2, with Davis and Mumpower opposed.

Bellamy stayed out of the room as Council considered granting Mountain Housing Opportunities a $500,000 loan to develop 73 rental units. The loan, noted MHO Community Rental Investments Manager Cindy Weeks, will trigger $7 million in federal tax credits for low-income housing. Those credits, in turn, attract private investment by developers, who can use the credits on other projects. “The affordability is sustained by tax credits,” she explained.

And despite Davis’ “no” vote on increasing the size of trust-fund loans, he supported the MHO loan, which was approved 5-1 with Mumpower dissenting.

The wish list

The city’s legislative agenda — an annual list of requests requiring action by state legislators — is due in Raleigh by May 17, when the General Assembly convenes for this year’s short session. And though there’s always some discussion about which items to include, Council members typically agree on what should make the cut.

In alternate years, the General Assembly convenes in May instead of January, primarily to handle unfinished business from the previous year’s long session. Because of time constraints, lawmakers try to limit new legislation to noncontroversial requests unanimously approved by the petitioning local government.

This year’s list, presented by City Attorney Bob Oast, appeared to fit the bill, with five requests for legislation and one resolution:

• Finalizing a proposed settlement with Progress Energy over the city’s abandoned attempt to annex Lake Julian.

• Allowing voluntary annexation into the city without legislative approval.

• Permitting funding options for replacing or refurbishing the Civic Center.

• Repealing the Sullivan Acts, related to the city/county water dispute.

• Increasing reimbursement for child-care services for low-income families.

• A resolution requesting increased funding for the criminal-justice system.

The last item, Newman told Xpress, had been brought up by Mumpower in the April 11 work session, despite Council’s prior agreement to include only issues specifically affecting Asheville.

After that, however, Newman showed up at the formal session with his own list of proposed additions, giving a rocky finish to what is typically a pro forma approval process.

Newman’s first request involved tweaking the wording of the planned request for Civic Center funding options. The existing language would leave Council open to any funding option except a sales-tax increase.

Davis, who chairs the current Civic Center Task Force, explained that the wording was intended as a placeholder to keep the issue on the General Assembly’s radar. But Newman wanted to further define which types of funding should be considered, including a hotel-occupancy fee and a fine-dining tax.

Davis, however, maintained that legislators would not address the details of the funding during a short session. “This is open to debate, but this is not the time for that debate,” he said. Accordingly, Council unanimously passed the existing agenda without the new language.

Newman wasn’t finished, however. Council’s unanimous support, Oast explained, is needed only for legislation that would solely affect Asheville. Broader-brush resolutions, which Council had initially agreed not to include on this list, require only majority support on Council to be sent to Raleigh. And on that basis, Newman was able to get enough votes to add resolutions to the list calling for:

• Allowing local governments to publicly fund their elections.

• Local control of cable-franchise fees.

• Raising the statewide minimum wage to $7 an hour.

• Expanding the Homestead Exemption Act to reduce property taxes for senior citizens.

• Placing the Land for Tomorrow conservation bond referendum on the North Carolina ballot.

At press time, Oast was still tweaking the additions to the list; the full legislative agenda will be submitted by May 9, he said.