The Durham City Council is expected to vote Tuesday night on the future of an affordable housing project.
Durham’s Community Development Department is recommending the city enter a grant agreement with the Durham Housing Authority worth $6.6 million. It is an increase from the $2.5 million previously committed to the mixed-income housing development at the corner of Elizabeth and Liberty streets.
Other WRAL Top Stories
“It is clear that affordable housing is a priority, but at the same time, we know that there is a limit,” said DHA CEO Anthony Scott.
The increase is due to the increase in construction costs and rising interest rates, according to the project’s developer Ronn Stewart, who is the senior vice president of Laurel Street Residential. The proposal, known as the Elizabeth Street Apartments, would be a 72-unit family development. Construction on the project is supposed to start later this summer or in the fall.
“It’s always been challenging,” Stewart said of the construction industry. “This is just a new challenge.”
Scott said as prices increase, there’s a question of how that will impact projects moving forward.
“As you know this is not a DHA or a Durham issue,” Scott said. “This is a national, and certainly, a state issue.”
Gateway Building Company co-owner Austin Moore is working on several other commercial projects in Durham. Moore’s company has noticed similar price increases, including year-over-year increases between 20-30%.
“It doesn’t surprise me,” Moore said of the increasing prices.
Moore said Gateway Building Company has had to get creative to adjust to the conditions of the market.
“We’ve had to change certain materials, we’ve had to start projects, stop them and restart them at a later date,” Moore said.
The rising costs could mean fewer projects for the city, Scott said.
“We are hoping that there is greater stability across the market in a variety of ways, but if not, it means we are likely to face some tougher decisions down the road,” Scott said.