Preserving Affordable Housing: DHIC’s Commitment to Community Impact

As the affordable housing crisis intensifies across the United States, preserving existing affordable housing units is critical. DHIC is proud to be at the forefront of this effort in North Carolina. In a recent conversation, DHIC Project Manager Joseph Omozokpea, shared insights into our approach to preservation and the challenges and innovations shaping this vital work.

A Journey into Affordable Housing

Joseph’s professional journey began at the University of North Carolina at Chapel Hill, where he developed a passion for affordable housing. Interning with a regional tax credit syndicator gave him firsthand experience with the complexities of financing and maintaining low-income housing. Later, working with a for-profit organization, he specialized in recapitalizing and rehabbing older affordable housing properties. This experience uniquely positioned him to join DHIC in 2021, where his expertise has been instrumental in managing a large-scale preservation project.

The Importance of Preservation

DHIC has been a leader in affordable housing development in North Carolina since the 1970s. Over time, however, our multifamily rental properties face the dual challenges of aging infrastructure and the expiration of their affordability restrictions—typically set at 30 years. Without intervention, these properties could face the risk of market-rate conversion.

“We’re seeing more and more properties reach the end of their affordability period,” Joseph explains. “If not preserved, they’re often sold or converted to market-rate units, which displaces residents and exacerbates the housing crisis.” To counter this trend, DHIC is committed to reinvesting in its properties, ensuring they remain affordable and functional for decades and generations to come.

A Strategic Approach to Preservation

DHIC’s current preservation project includes seven properties in Wake County, spanning Raleigh and Cary. Built between 1989 and 2005, these sites collectively provide housing for households earning between 30% and 60% of the area median income (AMI), which amounts to roughly $25,710 – $51,420 for a family of 1. DHIC’s reinvestment efforts include interior and exterior upgrades — replacing flooring, appliances, countertops, and lighting inside while addressing siding, windows, roofing, and even adding new playgrounds outside.

To make preservation financially viable, DHIC has employed a unique strategy. One key approach involves bundling multiple properties into a single portfolio. “By pooling these properties,” Joseph noted, “we can make the package more attractive to tax credit investors and lenders, allowing us to address preservation on a larger scale and within a shorter timeframe.”

Challenges and Opportunities

Navigating the complexities of affordable housing preservation isn’t without its hurdles. The 9% tax credit—a critical funding source—is highly competitive, limiting the ability to tackle multiple properties simultaneously. While rising interest rates further complicate non-tax credit financing options, DHIC remained steadfast, exploring all available strategies to sustain its portfolio.

Joseph explained the importance of a two-pronged approach to addressing the affordable housing crisis. “While building new affordable housing is important, we can’t let the existing affordable housing slip away due to the affordability period and lack of preservation efforts. Otherwise, no matter how much new housing we add, we’ll continue losing affordable units to market-rate conversions.”

Pictured above: rehab work at Creston Commons.

A Mission-Driven Legacy

One of DHIC’s proudest commitments is its refusal to sell properties from its portfolio. “Selling would mean losing control over the future of those properties,” Joseph explained. By keeping these units under their management, DHIC ensures they remain affordable for current and future residents.

This unwavering commitment has not gone unnoticed by residents. While preservation projects inevitably bring temporary inconveniences, such as construction disruptions, the long-term benefits—from lower utility bills to improved living conditions—have been met with overwhelming positivity.

Celebrating a New Milestone 

This December, DHIC celebrated the financial closing on DHIC’s first preservation portfolio. DHIC President & CEO, Yolanda Winstead, shared her insights on the momentous occasion.

“Where we have typically approached rehabilitation of existing properties in the portfolio one at a time, in this instance, there are seven properties (Avonlea, Highland Village, Jeffries Ridge, Madison Glen, Ripley Station, Sedgebrook and Tyron Grove), with 374 units that will undergo rehab with tenants in place under a single tax-exempt bond issuance with 4% credits. Just getting to this point was a huge undertaking with many moving parts.

The total development costs for the portfolio is around $83MM and sources included funding from Citibank, CAHEC, the North Carolina Housing Finance Agency (NCHFA), Wake County, City of Raleigh, seller notes from Community Revitalization Preservation Corporation (CPRC) and deferred developer fees from DHIC.  Longtime residents will soon have like-new housing without having to move to a new property and DHIC will have extended the useful life of a critical mass of local affordable housing units.”

Looking Ahead

This work underscores the critical role preservation plays in addressing the affordable housing crisis. As policymakers and the public often focus on building new units, DHIC advocates for a two-pronged approach: increasing affordable housing availability while safeguarding what already exists. This strategy ensures that the investments made over decades continue to serve the community.

By embracing this strategic approach, DHIC is setting a powerful example of how organizations can tackle the affordable housing crisis holistically. Our work not only preserves homes but also strengthens communities, providing a stable foundation for families across North Carolina.