Housing Director, Sarah Vinas, presented the staff’s recommendation concerning 505 West Chapel Hill.  They proposed the building of 80 affordable units for individuals/families with incomes from 30 to 60% AMI.  It is a mixture of 1, 2, and 3 bedroom apartments and will be built on the Southwest corner.  

The affordable housing developer recommended is Laurel Street (builders of 300 and 500 West Main along with other units).  The Council was very positive about the proposal, endorsed it, and gave recognition to the community advocates who have worked so hard for affordable housing on this city owned property.  

It is contingent on Laurel Street obtaining a 9% LIHTC grant which they will apply for in January.  The city will provide 6 million in subsidy.  

The 505 Working Group (WG) completed it's process and presented to the City Council in May of this year. The 505 WG was composed of Yolanda Winstead (DHIC), Ted Heilbron (Kelley Development Co.), Sherry Taylor (DCLT), Gregg Warren (formerly DHIC), Ketty Thelemaque (CAN), and Rick Larson (Durham CAN, Duke Memorial Church,PA).  The team met for six weeks and accomplished quite a bit in a short amount of time. The support from staff and consultants was high level and encouraging. 

The WG had close cooperation and support from City staff (General Services, Housing, Planning, Attorney), HR&A, and Perkins&Will, which provided massing studies for our work. As such, the City Staff support the WG feasibility findings but did not  take a position on the WG 's recommendations. 

The primary message delivered to the City Council was:

• RESPOND NOW TO THE AH CRISIS: Affordable housing remains a crisis in Durham -- it's essential that the City Council act now and use our public land for our low and working income citizens.
• 80 UNITS IS THE MINIMUM. We support the WG's recommendation for Scenario 2 (80 units with the possibility of another 55). The stated priority of past Councils was 80 units. 80 units is the minimum, and we call on Council to aim higher. 
• PLAN FOR A PHASE II: We understand that the second phase of Scenario 2 will have to wait. We call on the Council to set aside the .5 acres in the SW corner for AH when considering future development.  
• RETAIN CITY OWNERSHIP: We support the WG's recommendation that the City should retain ownership of the property via a ground lease.
• FAST TRACK and NO RFP.   The Council must choose a developer quickly (by July) -- an RFP will unnecessarily delay moving forward. The City attorney says an RFP is not required   [NOTE: CAN will be reminding the Mayor and Council Members Kopac, Cook & Burris that of their commitments to fast track AH development at 505. And the 3 Council members (Cook, Kopac & Burris) said they would vote against the City launching another RFP for the 505 West Chapel Hill Street site.

IndyWeek article about the proposal to start Affordable Housing on the site. 

The City Manager directed staff to identify an affordable housing developer by August, 2026 Stay tuned for more updates prior to the August City Council work sessions.

Reps from the 505 Working Group pictured here: Sherry Taylor, Gregg Warren, Yolanda Winstead, Rick Larson, Ted Heilbron

March 19, 2026
To: Durham City Council
Fr: 505 Working Group

Re: Recommendations (link to slides) for building affordable apartments at 505 W. Chapel Hill St.

Background: The Working Group (see below for membership) was convened by the City in December 2025 to determine the spatial and financial considerations for developing affordable housing at 505. With active support from City staff, HR&A Advisors, and Perkins&Will, we met six times in January and February 2026. We appreciate the opportunity to share our expertise, work constructively with City staff, and present our findings and recommendations to Council.

Assumptions: In keeping with past RFPs for the site and years of advocacy by a range of community organizations, we based our work on these assumptions:

• Maximize # of affordable units (minimum 80) available for 60% AMI & below
• Given the high value of the land, seek an efficient affordable housing footprint
• Meet all NC Housing Finance Agency, LIHTC and City of Durham requirements for amenities, open space, parking, and configuration
• Choose a project size that is competitive for a 9% LIHTC Award
• Affordable housing must be able to proceed independently of plans for the Milton Small Building and other future development at the site.

Our process: We focused on the Northwest corner (intersection of S. Gregson St. and W. Chapel Hill St.). We considered multiple massing studies prepared by Perkins&Will, consulted with City staff and HR&A, and engaged a licensed general contractor to generate cost estimates for the two most feasible scenarios:

Scenario 1: Use a 9% LIHTC award to build a standalone 5-story wood-framed structure housing 80 apartments. 80 surface parking spaces wouldbe available to the South of the building.

Total acreage: 1.64 acres. ESTIMATED gap subsidy required: $4.2 Million.

Scenario 2: Use a 9% LIHTC award to build a standalone “5 over 2” structure -- 5 stick-built floors housing 80 apartments over 2 concrete floors providing 80 units of structured parking. Same apartment configurations and amenitiesas Scenario 1.

Total acreage: .8 acres. ESTIMATED gap subsidy required: $6.03 Million.

Findings: Building 80 affordable apartments is clearly feasible on the NW portion of 505 and will not prevent other future development of the site. 505 is an excellent candidate for affordable units given its proximity to public transit and downtown, and an 80-unit development would be competitive for a LIHTC award in 2027. The cost per apartment is comparable to other City-funded affordable housing projects.

Recommendations:

• Pursue Scenario 2: Build 80 affordable apartments over structured parking onthe NW corner, leaving room for a 2nd LIHTC building of 55 units on the SW corner in a future development.
• By July 2026 select a qualified LIHTC developer with a proven track record in Durham to develop a detailed plan for Council consideration in Fall 2026 and a LIHTC pre-application in January 2027.
• Offer a long-term ground lease at nominal cost to the developer.