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Frequently Asked Questions
There seems to be an abundance of new apartment buildings in Winston-Salem. Do we really need more?
Recent years have seen a substantial number of apartments being built in downtown Winston-Salem. These new apartments are market-rate (and higher) and are therefore not considered workforce housing. More affordable housing is needed for working households with low to moderate incomes.
Why are you focusing only on “essential workforce housing” rather than “affordable housing”?
TCHC aims to maximize its leverage by participating in projects that are funded with tax credits, creating larger amounts of equity investment. Since a financing need still exists in many of these projects, TCHC funds will help close the funding gap to make the projects financially feasible for developers. By partnering with developers who have secured tax credit funds, TCHC can ensure that more units can be built for essential workers seeking safe, decent, and affordable housing. These tax credits have been created to meet the affordable housing needs of essential workforce members. TCHC realizes that there are families that need affordable housing that do not fall in the income categories that we initially plan to serve. With proper funding, TCHC hopes to expand affordable housing opportunities to include home ownership and housing rehabilitation.
How does TCHC plan to raise enough funds to make workforce housing projects feasible given that the funding gap for a typical project is 3-4 million dollars?
TCHC does not plan to fund the entire financing gap for any individual project. A typical LIHTC (Low Income Housing Tax Credit) project has many different financing sources. Historically however, there are many times when a small financing gap remains that can hold up a project. TCHC will be a source to fund that final gap in order to expedite workforce housing development.
What percentage of money raised will go toward the actual Fund v. TCHC operational expenses?
TCHC plans to finance its operations with a maximum of 10% of any funds it raises within the community, allowing a minimum of 90% of the dollars raised to go directly into workforce housing development.
Has this model been implemented in other cities in North Carolina and/or across the country?
TCHC has studied successful housing funds in Greensboro, Charlotte, Raleigh, Durham, Denver, and Pittsburgh. The North Carolina funds use a Fund Administrator (Self-Help Ventures and LISC) to manage the funds, which TCHC also plans to do.
Learn more about the efforts in other cities.
Since home ownership provides a path to financial stability and generational wealth, is TCHC considering the development of single-family and/or townhomes for purchase by workforce households?
TCHC is aware of the great demand for home ownership and the shortage of homes affordable for purchase by workforce households. Research indicates that, in the current market, it will be more costly per unit to subsidize single-family homes than rental units. The Low Income Housing Tax Credit program provides substantial equity financing for the development of workforce apartment neighborhoods. However, as construction costs have skyrocketed, the financing gap faced by developers has expanded greatly. TCHC plans to use its capital to help close the affordability gap.
Why should I give my hard-earned money so a developer can make more money?
Developers are needed to create housing. Those developers must make enough money to stay in business so they can build the next neighborhood. Projects leveraging Low Income Housing Tax Credits (LIHTC) are very complicated, filled with a myriad of rules and regulations, and they often take years to get funded. The required market study costs anywhere from $10K to $15K in addition to submission fees required for payment to the NC Housing Finance Agency. These are just a few of the non-refundable costs that must be expended prior to submitting an application for tax credits. Because the number of projects receiving the tax credits is very small, the risk of failure is high. If cost overruns occur in construction, the developer must dip into their development fee to cover any shortfalls. It is estimated that the median developer fee upon completion of a housing project is about 11% of the total development cost; but this amount is significantly lower in workforce housing projects. (Source: “The Complexity of Financing Low-Income Housing Tax Credit Housing in the United States” Terner Center for Housing Innovation, April 2021) In short, successful workforce housing projects require successful developers.
How will workforce housing projects be selected for funding?
TCHC plans to use a housing fund model similar to those implemented in Raleigh, Charlotte, and Greensboro, which utilize a fund administrator to oversee the workforce housing projects that are financed through the Fund under the parameters that have been established. Learn more about similar programs in other cities.
How You Can Help
Join the Movement
The success of the Twin City Housing Capital Fund relies on passionate, informed donors and volunteers. Here are three ways you can help this effort.
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We have accepted, so to speak, a second Bill of Rights under which a new basis of security and prosperity can be established for all — regardless of station, race, or creed …Among these are… the right of every family to a decent home.”
—Franklin D. Roosevelt, State of The Union (January 11,1944)