Durham City Council Work Session - March 19, 2026: Durham Debates 505 Chapel Hill Affordable Housing
The Durham City Council wrestles with how much affordable housing to build at 505 W Chapel Hill Street, balancing a tight 9% tax credit timeline, parking and design choices, and millions in potential subsidy against broader downtown goals and tax revenue. Council members also hear updates on landlord incentive funding for families leaving homelessness and preservation plans for the Milton Small building as part of the site’s future. 58mins
Was this helpful?
Original Meeting
Thursday, March 19th, 2026
13011.0
Durham City Council Work Session March 19, 2026
Video Notes
Welcome to the City Council Work Session for March 19, 2026.
Agenda: https://www.durhamnc.gov/AgendaCenter/City-Council-4
How to participate: https://www.durhamnc.gov/1345
Contact the City Council: https://www.durhamnc.gov/1323
NOTE: Comments left on this livestream will not be read or entered into the meeting record
In This Video
-
-
Staff detailed how a past departmental director supplemented a housing contract with older bond program income, explained landlord incentive payments to reduce screening barriers, and Council Member Carl Rist highlighted the importance and recent successes of engaging landlords to house families leaving homelessness.
-
Director Sean Egan explained how staff evaluated multiple bids for a project, rejected one as unrealistically low and another for not meeting underutilized business participation goals, and recommended an award that exceeded the inclusion target while directing council to detailed site plans in the attachments.
-
-
A working group member thanked council and reported that LIHTC-supported affordable housing at 505 W Chapel Hill Street was feasible—outlining an initial 80-unit phase with potential for a second 55-unit phase, an estimated $4–6 million subsidy need, and a recommended timeline for selecting a qualified LIHTC developer and moving toward a pre-application.
-
-
Working group member Ted Hilbrun outlined a preferred five-over-two podium design with structured parking to match the high land value, cautioned that NCHFA might not allow easily converting surface parking to a garage later, and concluded that option 2 best supported a competitive 9% LIHTC application while preserving future developable area.
-
A speaker emphasized that 505 W Chapel Hill Street was expected to receive a perfect QAP site score and qualify as a redevelopment site for a highly leveraged 9% LIHTC award, and explained that the high land value supported the recommendation for structured podium parking instead of surface parking to reduce long-term costs.
-
A speaker urged the city to select a developer for 505 W Chapel Hill Street by July to meet a January LIHTC application deadline, outlining a long build-out timeline, a $4.2–$6 million city funding range, the advantages of podium parking on the sloping site, and the opportunity to reserve nearly two acres for future mixed-income, mixed-use development.
-
Downtown Durham, Inc.’s chief operating officer read remarks urging that 505 W Chapel Hill Street be treated as a catalytic downtown project aligned with the Downtown Durham Blueprint, noting existing and planned affordable units nearby while warning that further dividing the site without a broader context could limit its overall potential.
-
A speaker representing the Coalition for Affordable Housing in Transit and a local church ministry outlined three critical milestones for selecting a LIHTC developer and submitting a 9% tax credit application for 505 W Chapel Hill Street, urging the city to act promptly so the site could become a signature downtown development that demonstrated Durham’s commitment to all residents.
-
Ann Rebeck, speaking for the People’s Alliance, recounted the group’s long-standing advocacy for maximizing affordable units at 505 W Chapel Hill Street, endorsed the working group’s recommendations, and urged council to promptly select a developer so the centrally located site could house residents traditionally left out of new construction.
-
A speaker urged council to reserve publicly owned land at 505 W Chapel Hill Street for affordable housing that would allow essential workers to live in the city they serve, warning that delaying past an upcoming LIHTC pre-application deadline could forfeit a rare chance for the city to shape the market.
-
Council Member Matt Kopac reflected on a decade of delays at 505 W Chapel Hill Street, crediting recent work with reopening the possibility of affordable housing and describing a phased approach that balanced affordability, preservation of the Milton Small building, and future redevelopment as a win for the site.
-
Council Member Kopac asked whether including affordable housing at 505 W Chapel Hill Street aligned with the Downtown Durham Blueprint, and Anna Branley responded that affordability was central to the blueprint and could fit on the prominent gateway site but cautioned that further subdividing the parcel would reduce its overall opportunities.
-
Council Member Matt Kopac asked how limiting future parking at 505 W Chapel Hill Street would affect redevelopment options, and Kathleen Turner explained that while anticipated zoning did not require minimum parking, different potential uses of the Milton Small building—such as housing or a hotel—would still generate on‑ and off‑site parking needs that warranted proactive planning despite many details remaining speculative.
-
-
Staff explained that a drafted option agreement for the site would allow the manager to finalize a subdivision and sale without returning to council, while Council Member Cook requested that future development and parking scenarios brought by Preservation NC also come back for council input to ensure a cohesive plan for the property.
-
Staff and a Preservation North Carolina representative acknowledged past credibility issues that made developers wary and stressed the need to reduce uncertainty around the Milton Small building—including clarifying parking access—to attract an experienced preservation-minded developer and secure financing.
-
-
-
-
-
Housing and Neighborhood Services staff explained a recent open application process that put $4.5 million in HOME and CDBG funds out for competition, outlined plans to time future funding rounds to align with LIHTC application cycles, and clarified for Mayor Pro Tem Caballero that a developer at 505 W Chapel Hill Street would need to be selected by 2027 but could seek other gap financing if a city funding request did not meet RFP standards.
-
Mayor Pro Tem Caballero questioned the opportunity costs of committing roughly $6 million in gap funding for about 80 affordable units at 505 W Chapel Hill Street, confirmed with the working group that the contemplated project would not pay property taxes, and cautioned against being pressured into timelines or decisions before having a clearer picture of overall housing needs, funding constraints, and the transition to a new housing plan.
-
Council Member Kopac requested clearer information on the project’s overall budget impacts and potential financing partners during a tight budget period, while another speaker discussed limited feasibility for street-level retail on most of the site and suggested that alternative commercial uses could still align with the adopted downtown small area plan even without continuous retail along West Chapel Hill Street.
-
Council Member Rist voiced support for moving forward promptly with scenario two, praising its structured parking and preservation of future development options while welcoming the Milton Small building’s renovation and added affordable housing, and Mayor Pro Tem Caballero asked to keep flexibility on where to locate active street‑level uses on the site.
-
Mayor Williams asked whether funders for a future housing project could be convened upfront, and Ted Hilbrun explained that while local gap-funding partners could be coordinated, the North Carolina Housing Finance Agency’s competitive 9% LIHTC process and commitment to fairness prevented advance assurances of support.
-
-
Ted Hilbrun explained that the 9% LIHTC program was designed for relatively small, cost‑contained projects that must stay competitive, and noted there was flexibility in where housing could be located on the 505 W Chapel Hill Street site because siting did not affect the project’s financing feasibility.
-
Mayor Williams stressed weighing tax impacts alongside calls for more affordable housing and expressed a preference for getting the 505 W Chapel Hill Street plan right over rushing the timeline, while a speaker clarified that the 9% LIHTC program effectively capped the project at about 80 units before needing to shift to a less efficient 4% financing structure.
-
-
Mayor Williams acknowledged not being a development expert and expressed a desire to entrust implementation to staff, while City Manager Ferguson asked council to clarify whether they had a preferred location for the project or were comfortable leaving siting decisions to staff so long as the timeline was clear.
-
Council Member Cook and Ted Hilbrun confirmed that the project’s tax credit scoring would not depend on its exact location on the parcel, while the city manager summarized council’s direction as favoring a flexible siting approach with a preference for meeting a July timeline and allowing staff to adjust the location if a more advantageous option emerged.
-
-
Council Member Cook used a residential lease analogy to urge that future uses of the Milton Small building require owner-style permission, emphasizing trust in Preservation NC but stressing the need to ensure any tenants or activities remain consistent with the 505 West Chapel Hill Street master plan.
-
Kathleen Turner explained that Preservation North Carolina’s sale of the Milton Small building would include perpetual protective covenants and a rehabilitation agreement with a vetted, experienced developer, and recommended informing council of the prospective buyer before significant due diligence costs were incurred, noting that project timelines would vary based on the selected proposal’s scope and phasing.
-
Council Member Rist expressed enthusiasm for preserving the Milton Small building as part of the broader site redevelopment, while Kathleen Turner explained that lenders would require long-term parking access agreements and urged the city to proactively plan shared parking to support both the building’s potential future uses and the rest of the site.
-
Aarin Miles explained that the option agreement was drafted to keep parking flexible by avoiding commitments that would tie on‑site spaces to the Milton Small building, allowing parking for that project to be located off site so the rest of the 505 West Chapel Hill Street development would not be constrained.
-
Council Member Rist noted that selling the Milton Small portion of the site would generate future property tax revenue, and Mayor Williams voiced support for preserving and reusing the historic building—ideally as a boutique hotel—in a way that aligned with Durham’s values while still contributing financially alongside new development on the rest of the parcel.
More from this government
Nearby governments