By Sandy Semans Ross | Outer Banks Voice on September 25, 2021
In 2005, buying a home in Dare County was becoming an issue, with prices constantly rising and leaving behind many who wanted to purchase residential homes.
The short-term rental market was accelerating and moving into areas that previously had been for year-round residential renting. Because state legislators refused to allow short-term rentals to be deemed commercial, appraisals were based on what all properties were sold for, something that lifted the cost of all real estate.
To address the housing problem, Dare County officials began to meet to devise a plan of action.
The Dare County Board of Commissioners’ Affordable Housing Committee (AFC) began meeting in July of 2005. The topic of discussion was the county’s acquisition of two parcels of land at Bowsertown on Roanoke Island that had been transferred from the NC Wildlife Resources Commission to Dare County and approved by the NC Council of State.
The back-of-the-envelope plan was to build homes on the property with the county retaining ownership of the land, but buyers being deeded the structures. The houses could be resold but with some limitations on how sales figures could be set. Owners would gain equity, but not the amounts showing up in the private sales markets.
In October 2006, Dare County Board of Commissioners Chair Warren Judge, Commissioner Richard Johnson, who chaired the committee, and county planners Ray Sturza and Donna Creef met with Bill Parker, chairman of the Manteo Planning Board, Manteo Town Manager Kermit Skinner and Erin Trebisacci, the town’s planner.
The result of the meeting was a list of information needed by the town before Manteo would consider annexing the Bowsertown property so that it could be connected to the town’s sewer system. About a year later, the Affordable Housing Committee met with Community Development Corporation (CDC) Chairman Bob Muller to further the plans for the housing development, which the CDC was then spearheading.
In July 2008, Muller told the committee that Ben Cahoon had been hired by Dare County for the project. The Dare County Capital Improvements Committee, which had been briefed on the project, expressed general support of the project and preferred a three-phase approach to construction. Cahoon presented a site plan where two-bedroom units were envisioned to be approximately 1,000 square feet and three-bedroom units were about 1,200 square feet.
Efforts to get the property annexed by Manteo so that it could be served by the town’s sewer plant failed, however, largely due to concerns about the system’s ability to handle the project and still serve the needs of the existing lot owners in the town. The project was stalled in 2008 due to county budget shortfalls caused by the Great Recession in 2008-09.
The 2009 Dare County Land Use Plan, approved in December 2010 by the county commissioners, also addressed the lack of affordable housing in Dare County.
The document noted the economic slowdown experienced in 2008-09, and also forecast that many homes would open up for rentals, which could alleviate the affordable housing crunch. What it didn’t anticipate was the replacement of more traditional-sized homes with very large houses being rented as tourist housing.
The CDC continued to work until 2012 before filing bankruptcy due to lack of sustainable funding. In addition to helping facilitate some affordable housing projects, the group also built a large building with offices for nonprofits and housing for Outer Banks Hotline clients.
In 2016, the county canceled on the Bowsertown project.
But flip the calendar forward a few years, and now, the county has turned to the Development Finance Initiative (DFI) at the UNC School of Government for help. The program began in early 2020 by identifying the needs for housing and ways to get projects completed. Two properties are being considered for the apartments.
Gone are the thoughts of building homes that could be purchased, instead the effort now is to interest a developer into building apartments on the Bowsertown property owned by the county, as well as the Elizabethan Inn. There are tax credit programs that could benefit the developer and the properties meet most of the criteria needed. including close proximity to grocery stores, pharmacies and other essential businesses.
Dare County Board of Commissioners Chairman Bob Woodard pointed out one concern, however: “There is the NIMBY – not in my backyard – when it comes to higher density building such as apartments.”
And because the Bowsertown land is outside the Manteo town limits, it would most probably need to be annexed so it could receive sewer service from the town. Manteo Town Planner Melissa Dickerson said there has been no discussion about that yet with Manteo officials.
For his part, Dare County Manager Bobby Outten said that an interested developer would most probably approach the town to ask for annexation and to discuss zoning and building regulations.
The other property under consideration is the Elizabethan Inn on the north of the town. Most of this property is within the town limits and has sewer service. DFI is talking to developers about rehabbing the building to provide one-, two- and three-bedroom apartments.
Dickerson said that she had a two-hour phone meeting with DFI last year about what would and would not work for the motel property.
But cost will be one of the determining factors and Outten said the county and property owners have not yet discussed how much it would cost to purchase the property although they are interested in selling it.
The county recently contracted with an experienced architect to develop site plans for both parcels, so that DFI has something to show potential developers.
If the DFI finds a developer who is interested in either property, the tax credits can apply and all the other items can be dealt with, the county will then need to decide how much it is willing to pay in subsidies to the company.
If the projects become reality, rent for each unit will be based on the applicant’s salary. The upper limit will be approximately $39,000 in order to qualify for one of the units.
DFI reports that 60 percent of the 2,300 low-income residents that rent in Dare County must spend more than 30 percent of their income on housing cost. The DFI also reports that there is a minimum of 1,200 additional rental units needed to meet existing demand.
“The rents will be fixed on income and can’t be changed to regular market prices so the developer is going to have to know that it can make money,” said Outten. “The county will have to determine how much in subsidies it can pay to the developer that allows it to work for them.”
“It’s complicated,” he added.