City of Wilmington approves funding for Cape Fear Collective affordable housing initiative
At Tuesday night's Wilmington City Council Meeting, the city awarded $250,000 to Cape Fear Collective to help save already-existing affordable housing units.
Affordable housing is a difficult topic for many cities to grapple with. Property values go up as more people move into an area and those who are unable to keep up with rent increases are forced to move out.
Cape Fear Collective is aiming to keep existing affordable housing units in Wilmington available below the rapidly increasing market rates. The properties they’re looking to use will be available to tenants that make 80% of the area median income. Their rent would be affordable, based on federal HUD rent limits.
Patrick Brien, founder of Cape Fear Collective, explained how the program works: “What we’re going to do, is identify those properties, we’re going to show the city this is exactly what we paid for those properties, at cost, and then we’re basically going to buy them out of that portfolio.”
Cape Fear Collective uses investors’ money to make the initial purchases when units become available — then CFC reimburses those investors once the city or county provides funding. But there’s no interest involved, no return on investment to pay to investors – so the city gets exactly what it pays for.
“So if we buy a house for $100,000 with previous investments, we’re going to use city money to buy it at $100,000," Brien said.
These properties will either be rented directly to tenants or to a non-profit organization that will then rent them out to tenants. In other words, Cape Fear Collective and the chosen non-profits become landlords.
With the city funding, Cape Fear Collective is looking to purchase three properties in qualified census tracts over a 20 year affordability period. The item passed unanimously.