1. Creating an Effective Density Bonus in Durham
Karen Lado
October 12, 2016

2. Background
Problem: Durham is experiencing rapid population growth, rising housing prices and escalating loss of existing naturally-occurring affordable housing
Challenge: Can we take advantage of strong market to incent market-rate developers to provide affordable units?
Opportunity: Create an enhanced density bonus in areas that would otherwise be legislatively upzoned

3. Target Area: Future Light Rail Corridor
Source: Durham City-County Planning Department

4. Density Opportunity
Current permitted densities range between 2-20 units per acre in most future station areas, excluding downtown and Ninth Street
In more urban areas such as downtown and Ninth Street, new residential projects generally build to maximum extent allowed under wood frame construction
50-60 units per acre, equivalent to 4-5 floors on top of concrete base
Church and Main
Whetsone
Source: Durham City-County Planning Dept.

5. Enhanced Density Bonus Concept
Bonus would allow developer to go from existing permitted density (2-20 units/acre) to ‘market’ density (50-60 units/acre)
Bonus would be provided to developers who agree to set aside a specified percentage of units as affordable housing
Program would be voluntary and predictable– developers could choose to build at existing permitted density, or to use bonus to gain additional density in return for providing specified affordability levels
Projects must adhere to zoning requirements for design districts

6. Issues and Challenges
Calibrating the bonus: percentage of units, AMI, affordability period
Requires financial modeling, as economic value of increased density > cost of providing affordable units for bonus to work
Geographic variability: Existing uses and potential market demand vary significantly across station areas
Potential unintended consequences: Bonus would only apply to residential construction, creating potential of driving development in station areas towards non- residential uses
Administration costs: City will need to set up system to oversee affordable units
Neighborhood impact: Some residents may not want additional density (or affordable units)

7. Next Steps
Durham pursuing interim density bonus which, if effective, would be incorporated into compact district zoning when station areas are officially rezoned (est. 3-5 years from now)
Need to complete financial modeling, developer and community consultation in order to calibrate proposed interim density bonus
Bonus proposal must be approved by Durham City Council and Durham County Board of Commissioners