In 2025, the county walked away from its five-year, $15 million affordable housing plan, citing budget constraints and continuing efforts of The Endowment. Next week, the county will consider a plan to invest in affordable housing — as a lender.
According to county agenda documents, the county was “approached by representatives of Cape Fear Development (CFD) regarding a potential investment.”
The project, known as “Proximity Blue Clay,” is located in northern New Hanover County on Blue Clay Road near I-140. The 28-acre project plans for 236 townhomes. CFD is asking the county for a $2 million loan, repayable at 5% over 10 years (providing around $100,000 in annual interest to the county).
According to a staff presentation, that's a considerably better deal than the 15-20% internal rate of return loan from a private lender. It's also expected to shorten the time it takes to bring the project to market, from four years or longer using traditional tax-credit development to 18 months using the county loan.
In exchange, CFD will guarantee the 60-90% AMI (area median income) affordability for ten years. The deal would not include any federal funds or tax credits — a departure from many other affordable housing projects in the area.
The AMI calculation of rent is based on renters paying no more than 30% of their income on housing. Notably, the AMI for the Wilmington area has dramatically increased in recent years.
Related: Wilmington's median income is on the rise. Here's how that messes with subsidized rents
Over the last decade, AMI has increased by over 70%, more than double the consumer inflation rate. The 2026 AMI for Wilmington is roughly $109,000, which has increased the going rate even for workforce and affordable housing units based on regional income.
According to the county, on the low end, a one-bedroom unit at Proximity Blue Clay would run $1,311 compared to a market rate of $1,828; on the high end, a three-bedroom unit would run $2,345 compared to a market rate of $2,795.
The county believes the project will serve residents working in health services, public school education, trades, and the hospitality industry.
According to the county agenda item, the “$2 million investment will be pooled with those of other community partners that will effectively replace private capital that is a typical component of a market structure. Replacing higher-cost private funds is the variable that allows CFD to offer the lower-than-market rents for the proposed ten-year affordability period.”
County staff propose using the county’s Revenue Stabilization Fund, a nearly $300-million fund created by the sale of New Hanover Regional Medical Center.
Staff also propose setting aside an additional $2 million in RSF funding for future workforce housing investments through a request for proposals (RFP), which would require future approval from the board of commissioners.
“In this process, the County would invite area developers to submit proposals for local workforce housing projects, with a baseline requirement of an annual return to the County and a scheduled return of all principal. County staff would evaluate proposals based on a mix of investment returns and affordability provisions,” according to the county.
The RFP would contemplate multifamily rentals, for-sale homes, and/or build-to-rent homes. The proposed financial structure would be flexible, according to the county, and could “include either fixed or variable repayment structures and could include the County participating in gains at refinance or sale.”
Staff said, “It is expected that the County would reduce or waive inspection and other fees and accelerate plan review and approvals.”
County commissioners will vote on the proposal at their upcoming meeting on Monday at 4 p.m.
