DAVIDSON — Commissioners and town staff are attempting a balancing act to maintain affordable housing in the area while not forcing homeowners to be tied to the house.

Davidson Affordable Housing Coordinator Cindy Reid presented some of the pitfalls regarding the affordable housing program to Davidson commissioners, Feb. 19 and 25, requesting they consider lifting or lessening some of the restrictions, even temproarily.

Reid said she has had a few families, who currently own affordable housing, express concern over not being able to sell their homes for increased prices because of the deed-imposed caps. Reid worries this will cause some of them to rent out the property in lieu of selling it, which could mean the homes aren’t maintained. The downside, if the homes' prices go up, they may no longer fit the qualifications for affordable housing.

Reid is asking the board to approve a 2 percent listing price increase for all affordable housing bought from 2008 to 2013 and sold in 2014. The medium income, which determines the rules, decreased so this would serve as a stopgap so residents don’t lose as much money when selling their property. 

Housing costs and potential homebuyers qualify based on the number of people in the family and how they relate to the Charlotte-Mecklenburg area median income of $64,200. For a family of four, it caters to residents making 50 percent of the median income —$32,100 — up to 120 percent of the median income — $77,000. Residents in these income levels should be able to pay a mortgage less than 23 percent of their income for the house to be considered affordable. The market value of Davidson land and houses surpasses that number.

Average sales prices in Davidson were $363,000 compared to $233,145 in Charlotte in 2013, said Realtor Elaine Smith.

Davidson started the initiative for affordable housing in 1998 to make sure there was “economic diversity in town.”

“The people who need affordable housing are people you see every day — your child’s teacher or day care worker, the clerk employed at the local store, the nurse at the medical clinic, a police officer, janitor, waiter or young professional just starting out — people who work hard and want to live in our town,” the Davidson housing brochure states.

To ensure there are housing opportunities, the town has stipulations for developers. Builders with seven or less units must build at least one affordable home or make a payment-in-lieu to the town’s affordable housing fund to be used to build it in a different location. Developments with eight or more units must set aside at least 12.5 percent of units to be affordable, and are categorized as made for the 50 percent, 80 percent and 120 percent income brackets.

There are minimum size requirements and homes must include the same functionally equivalent features as market rates.

Currently there are 56 homes in the program and 70 newly renovated low-income apartments, Reid said. The Davidson Housing Coalition partners with the town to provide housing opportunities. The town also has $106,000 in payment-in-lieu funds to be used to build affordable housing elsewhere.

Houses that are built as affordable housing have deed restrictions that limit resale to keep it in the affordable range. The current deed restriction is 99 years — a number considered too lengthy by stakeholders.

When previously discussed, the board questioned whether Reid’s suggested 2 percent was enough, offering 3 percent or more. She countered that while it may help the current homeowner to be able to list it at that price, the increase would more likely attract a nonqualified homebuyer. Plus, the listing price also must include 5 percent Realtor’s commission, decreased from the usual 6 percent commission.

While some of the homeowners want to move out, Reid said there isn’t a huge demand for people wanting to buy the homes.

During the meeting, Commissioner Rodney Graham asked if they could use the town’s median income, rather than Charlotte’s when deciding the numbers, but Reid said it’s not up to them. Commissioner Stacey Anderson added that some people making the lowest incomes really shouldn’t be buying houses and should consider renting instead, but they need to ensure those homes are available.

Graham, a developer who has built affordable housing in town, suggested bringing the deed restriction down to 10 years and then letting the original developer decide how to proceed after that time ends.

The board tabled the discussion of the percentages and revamping of the deed restriction timeframe until its March 11 board meeting.