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City, county leaders back away from $50-million housing bond after third-party polling by chamber of commerce

New Hanover County and Wilmington
WHQR
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WHQR

After a half-decade of committee work, New Hanover County and Wilmington seemed to agree over the summer on a $50 million bond to tackle affordable housing and a sales tax increase to help fund public transportation. But, despite earlier enthusiasm, the housing bond seems to be losing favor with elected officials behind closed doors.

At the end of the day, fear that the public won’t stomach additional local taxes caused elected officials to back away from the ambitious plans for affordable housing that were picking up steam over the summer — namely, a $50 million housing bond.

On November 15, the Joint City of Wilmington - New Hanover County Sales Tax and Housing Bond Committee held a meeting to discuss options for funding public transportation and affordable housing solutions. Because it was an official committee meeting, minutes were recorded. There was no formal agenda, but the main item — according to minutes and those who were there — was the result of a survey conducted by the Wilmington Chamber of Commerce.

The Chamber became involved because it would have been tasked by the county to promote the bond to the public (a role it has played with past bond initiatives). And, while the county had already commissioned an exhaustive study that included a public opinion survey showing 78% support for a housing bond, Chamber President Natalie English commissioned two additional third party polls — one leaning conservative, one leaning liberal — to gauge public support.

The details of that polling remain confidential — even elected officials were not allowed to keep hand-outs distributed during the Nov. 15 meeting — but the high-level synopsis was that the questions focused on the impact on property tax and the public approval of a housing bond landed below half. The numbers did not much improve for a theoretical $25 million bond. According to Chamber spokesperson Megan Mullins, “unfortunately, it is virtually impossible to move the needle enough to ensure the passage of a bond issue that starts below 50%.”

The Chambers polling also showed around 56% support for the sales tax increase to fund public transportation but noted that support eroded to 41% when respondents were presented with additional information about why the funding was needed and how it would be used.

The pollsters hired by the chamber recommended against putting the housing bond and sales tax increase on the ballot for the primary election in the spring of 2022.

When the meeting was over, there was no "singular recommendation" from the committee but it was clear that the winds had changed on the bond issue. The committee is set to meet again next week, but not much is expected to change on the housing bond front.

Of the five member committee — made up of county commissioners Rob Zapple and Jonathan Barfield, Jr. and city councilmen Clifford Barnett and Kevin Spears, and Mayor Pro-tem Margaret Haynes — only Spears was in favor of putting the housing bond on the ballot next year.

Two other ideas did garner support from at least three committee members. Putting the quarter-cent sales tax on the 2022 general election ballot was supported by Zapple, Haynes, and Barnes. Creating a new $7 county-wide vehicle registration to help fund WAVE had support from Barfield, Haynes, and Barnett — although the measure would have to be approved by the county each year. In an interview, Zapple noted that if the makeup of the board of commissioners changed that funding stream could easily disappear.

[Disclosure notice: Rob Zapple is a member of the WHQR Board of Directors, but has no role in editorial decisions.]

Did public support for the housing bond erode? It might depend on who, and how, you ask

The lack of public support for a housing bond in the Chamber polling might come as a surprise, compared to a study released earlier this year that showed 78% support for it.

The “New Hanover County Affordable Housing Study” commissioned by the county itself as part of the work of the city-county affordable housing task force, was performed by a team at UNC-Greensboro and presented to the city and county this past spring -- and it has some differences from the chamber study.

The UNC-Greensboro study included a survey of 1,463 people — nearly five times the sample size of the chamber’s survey, which asked 300 people.

Councilman Kevin Spears noted this during the meeting, and in a subsequent interview with WHQR, saying he felt 300 people wasn’t a fair representation of a county of over 200,000. Zapple replied that while polling was “imperfect” that the firms hired by the chamber had a good track record, according to meeting minutes.

The UNC-Greensboro survey also asked a much broader range of questions about affordable housing options, including whether respondents would be in favor of using money from state and federal grants, the sale of New Hanover Regional Medical Center, a housing bond, or property tax increases.

While the Chamber didn’t share its exact survey questions, from the meeting minutes, comments from committee members, and the Chamber’s description, the polling was more narrowly focused on the increase on property taxes, including questions on the public sentiment on property taxes in general (according to the Chamber, 67% of those polled felt New Hanover’s property taxes are already too high). And, while the county has other revenue sources to pay back a bond — including $350 million in cash reserves from the sale of the hospital — it is plausible that it would opt for a tax hike to pay down the bond.

According to the Chamber, “Questions asked suggest that selling an affordable housing bond tied to any property tax increase will be a challenge. Dropping the dollar amount of the bond under consideration ran into the same resistance even with less impact per household. Opposition messaging was very influential. After hearing negative messages, voters shifted by 7-points to the opposition position. Holding the line on taxes and improving the economy just resonated more with most voters we surveyed.”

Public survey from UNC Greesboro.JPG
UNC-Greensboro / New Hanover County
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WHQR
From the UNC Greensboro study on affordable housing, commissioned by New Hanover County.

The UNC-Greensboro poll also found that similar results when asked specifically about supporting affordable housing solutions that required increased property taxes, only 48.6% were in favor.

But the UNC-Greensboro poll found that other options, including a housing bond, were more popular. Over 70% supported using proceeds from the hospital sale, and over 80% the city or county providing infrastructure to offset housing costs.

So, the daylight between the two polls could be a function of how the questions were asked, who was asked those questions, or — as the Chamber polling might suggest — that the county’s unpopular ‘effective tax increase’ that was rolled out between the UNC-Greensboro survey and the Chamber’s research may have at least partially poisoned the well on local government spending.

Given that the city and county are looking to see how other regions have dealt with the affordable housing crisis, it’s worth noting that housing bonds have been popular in other major North Carolina cities.

Related: Wilmington could soon see a housing bond. How has it worked in other NC cities?

Asheville, Greensboro, and Raleigh have collectively passed over $100 million in housing bonds on local ballots. While these bonds have been critiqued by both progressives and conservatives, they have overall been fairly popular. In 2016, Asheville and Greensboro passed bonds with 71% and 68% of the vote and in 2020 Raleigh passed its fourth housing bond with a record 72% approval.

After five years, the devil is still in the details

The affordable housing debate goes back a long time and, even in 2016, the local government was considered late to the party by housing advocates — even then, they be said to have jumped in with both feet.

In 2016, the City of Wilmington and New Hanover County formed the “Committee on Workforce/Affordable Housing,” ad-hoc comprised of community members who wanted to identify key problems and solutions.

The following year, in June of 2017, the committee delivered its final report, primarily calling for the establishment of a permanent committee. Two years later, nearly to the day, in June of 2019, the city and county finally set up that permanent committee. But no little local legislative action was taken.

From Port City Daily: Two years later, Wilmington and New Hanover County finally commit to permanent affordable housing committee

Over the next two years, the city and county seemed to drift apart on the issue of housing and transportation, clashing repeatedly over funding for WAVE.

But, in the spring of 2021, the city and county held joint meeting, attempting to clear the air and get back on the same page about a host of issues — at the top of that list, affordable housing and transportation.

In April, the UNC-Greensboro study was delivered. Advocates noted that the study told elected officials what had long been common knowledge: the Wilmington area was in a full blown housing crisis and residents wanted to see local government take action.

In May, a new ad hoc committee — this time of elected officials — proposed a $50 million housing bond, and staff present a high-level breakdown of where the money would go.

In June, at a joint meeting of city council members and county commissioners, officials agreed to put the bond — with more details — and a sales tax increase to help fund WAVE on the ballot. City Councilman Charlie Rivenbark seemed to sum up the mood of the meeting, saying, “I don't want to put this off anymore … we've been kicking this can down the road. So long there’s not much can left.”

Housing bond use proposal.JPG
Ben Schachtman
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WHQR
Proposed uses of a $50 million bond presented in June.

The June meeting ended with the creation of another committee this time, tasked with fine-tuning of the initiatives and selling them to voters.

Related: Wilmington and NHC officials agree on housing bond, transportation tax - now they have to sell it to voters

Over the summer, incumbent city officials — including Mayor Bill Saffo, Rivenbark, and Barnett — campaigned on affordable housing, touting the proposed bond.

But, two weeks after the election, the latest committee has now derailed the housing bond, at least for the time being.

In an interview, Zapple explained why he feels the committee is now backing off the bond.

“I think that what we're doing is, as we learned more as members of the subcommittee, about the complexity of the different options of tackling affordable housing — we are tasking our staff to come forward with more ideas on how we can create a revenue source — it all boils down to the money and how something's going to be paid for,” Zapple said.

“And so looking beyond just the knee-jerk reaction of a $50 million bond, that would be paid for by the property tax owners — giving other options that are spread over a number of years, that's what we've asked for,” he said.

Zapple also repeated concerns he raised back in June: that the county wouldn’t get enough ‘bang for its buck,’ creating maybe 1,500 affordable units when the county needs closer to 30,000. During the committee meeting, Natalie English agreed, saying the Chamber would need a lot more detail before it agreed to working on a campaign.

For housing advocates it is likely to be frustrating that, six years after the city and county finally started getting engaged, there still aren’t sufficient details — despite numerous committees, studies, presentations, and programs in other North Carolina cities to build on.

Now what?

There are probably some concerns, for elected officials, about the political costs of raising taxes. But, compared to the county’s recent effective tax hike — which was neither popular or up for a vote — at least some of the responsibility for a housing bond would fall on the voters.

Councilman Kevin Spears said he still supported putting the housing bond on a ballot.

“I still say, us as the elected officials, it’s our job to put it into the hands of the people -- put both the quarter cent sales tax and the housing bond on the ballot. And if the people vote for it, fine. And if the people vote against it, then you become innovative,” he said.

Other committee members seemed concerned that if a bond failed on the ballot it might signal that the community was no longer supportive of the issue. According to meeting minutes, Mayor Pro-tem Haynes voiced concern that this could hurt the chances of getting funding from the New Hanover Community Endowment, which manages the $1.25 billion in proceeds from the sale of NHRMC.

The Endowment is certainly an option for long-term funding. In a recent interview, Chair Spence Broadhurst and Vice-Chair Hannah Gage told WHQR that they considered affordable housing a top issue and would be open to suggestions about a big one-time spend on a major issue. And the endowment will have $40-50 million a year to spend — eventually.

It will be several years until the endowment reaches its full grant-making capacity, and is not even taking applications until next September

There’s also the $350 million in cash that the county received from the hospital sale and has now invested — that’s the considerable budget the county initially suggested using, in part, to address school safety (commissioners later asked staff to look for additional funding streams). But, while many have pointed to Endowment as a source of housing funding, there’s been little discussion of taping this funding for the issue.

Since no one on the housing bond and transportation tax committee wanted to wait until the 2024 election cycle that means, at least for affordable housing, the committee is left not far from where the region was in 2016. Elected officials may now take the issue more seriously, but they don’t seem much closer to having a concrete plan to deal with it.

Correction: The original article reported that the Nov. 15 committee meeting "wasn't publicly advertised." The City Clerk's office did email it out the week prior to the meeting. WHQR apologies for the error.