Raleigh’s Affordable Housing Experiment in Jeopardy

You’ve likely heard the news that since Raleigh’s city council elections ended three proposals around affordable housing have been struck down. You’ve probably heard about accessory dwelling units (ADUs) and short-term rentals (AirBnB)— but what’s the third?

The last affordable housing measure that was struck down is also the least controversial of the three. Two historic homes near the intersection of S. West Street and W. Lenoir Street are set to be demolished for new development. Matt Tomasulo, a volunteer commissioner on Raleigh’s Planning Commission, offered to organize the purchase of the houses, pay to move the houses, pay the city for two lots in the Prince Hall historic district, pay to rehabilitate the houses, AND turn the homes into an affordable housing experiment where residents would share common space but have their own bedroom and bathroom.

So, in short, we would save two historic homes from being demolished, add two historic homes to the Prince Hall District, and create affordable housing close to downtown. An easy thing to vote yes on, right? Unfortunately, several members of city council instead decided to vote no, and the purchase was not authorized.

The TL;DR is three City Council members feel that it’s not proper to sell the city-owned lots to Matt Tomasulo. Even though the city isn’t selling them directly to Mr. Tomasulo, Council members Crowder, Thompson, and Cox believed that not opening the purchase to public bidding was unfair. Read on to learn more.

The Raleigh Historic Development Commission (RHDC)’s mission is to preserve the city’s existing historic structures. Historic districts, landmarks, the certificate of appropriateness (COA) process— that’s all RHDC. When a developer is about to clear land for new construction and a historic building is in the way, RHDC tries to work with the developer to save it. To do this, RHDC works with the developer, a historic preservation advocacy group, a building mover, and a landowner.

First RHDC works with the developer to get time to find land to move the home to. Many times this is a city-owned lot. This is where the first complication comes in. The City of Raleigh, by law, can’t sell real estate directly to an end user, it has to be done by public bid. However, there’s an exception for purposes of historic preservation. The city may sell historically significant properties directly to an end user for the purposes of preserving the house.  A recent example of this is when RHDC saved a Lustron house last month. In fact, the same partner that worked with RHDC to save the Lustron house, PreservationNC (PNC) , was also set to purchase the lots from the City of Raleigh to move the historic structures to. This all gets very complicated, but know that PreservationNC places restrictions on the legal deed to the lots and buildings, ensuring they are preserved, maintained, and not moved again.

So where does Mr. Tomasulo come in with this project? He would organize the purchase of the properties from PreservationNC, and from there, would have to pay for the costs of moving and renovating the houses, and for the land they sit on. The problem now is that Council members don’t want to sell the properties to PreservationNC knowing that they’ll go to Mr. Tomasulo. This places the affordable housing piece at risk. The City Council can place covenants on the property for historical preservation, restricting it so that it has to be sold for a period of time at an “affordable” price. However, there is no mechanism available to City Council to ensure the affordable housing project envisioned by Mr. Tomasulo will happen. Should someone else win the bid, the properties will likely just be used as single-family homes.

Council Member Crowder reprimanded Mr. Tomasulo and city staff, noting that while the deal as proposed is legal, it doesn’t look good to her from the public’s perception due to Mr. Tomasulo’s position as a city commissioner. Council Member Thompson took a much less aggressive stance, saying that it didn’t pass his sniff test as it seemed the preservation aspect was being used to bypass the need for a public bid.

In favor, Mayor McFarlane expressed surprise at the vote, as the proposal represented a great affordable housing project that everyone campaigned on. Council Member Baldwin agreed, saying not only did it get the city affordable housing, but also offered the opportunity to save some historic homes. Council Member Bonner Gaylord added that City Council should be encouraging citizen participation in activities like serving on the Planning Commission, and should not be punishing citizens for serving in such a capacity.

While the vote is a disappointing result, there is still a chance that this project can move forward. It will likely be on the Council’s agenda in January. However, the next council vote will not include Bonner Gaylord or Mary-Ann Baldwin. It’s unknown what Nicole Stewart, Stef Mendell, or Corey Branch’s vote would be.

What are your thoughts? Would you reach out to your city council member to ask their support? The vote in January will likely be the last chance to save this project. If voted down again, the developer would likely be ready to demolish the buildings before it would have time to get back to council.