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.

February 25, 2026

As organizers and leaders for People’s Alliance, upon reflecting and meeting about the events of Meet and Confer on 2-19-26, at the front of our minds are the students. Students are watching and learning from us every day. We ask that leaders from the Durham Association of Educators and the Durham Public Schools Administration that are part of the Meet and Confer process be mindful of this in all public interactions.

We cannot ignore the racial tensions that were evident at the end of the last Meet and Confer meeting. Racial equity must be embedded into all of our systems. In that context, the action by the President of DAE, a white woman, calling the Superintendent, Dr. Lewis, by his first name, rather than his earned professional title, is not neutral. Black leaders have historically and systematically been denied the respect, formality, and recognition afforded to their white counterparts.  Addressing Dr. Lewis by his first name not only stripped away his accomplishments, but denied him the professional respect he has earned. PA’s work is rooted in advancing racial equality in Durham, thus, this moment requires accountability, reflection and change. 

The exhaustion, frustration, and anger that were apparent at Thursday’s meeting are the culmination of months of emotionally charged meetings. It was clear that every person in the room cared deeply about our DPS students, families, and staff. Every person in the room was and is deserving of respect for their hard work, dedication, and passion.

The work of the People’s Alliance Education Action Team for the past few years has been in large part focused on advocating for the full implementation of restorative practices across the district. Restorative practices are rooted in respect for others and the recognition of the connections between people who are in community with one another. Restorative practices require us to take responsibility for the harm we have caused and demands that we stay vigilant and curious about the steps we must take to repair a strained relationship. 

The People's Alliance believes that a path forward is for the Meet and Confer committee to collectively commit to a relationship reset grounded in restorative practices. This could be through a restorative practices circle, facilitated by a trained neutral party, as a way to improve the Meet and Confer process moving forward.  The People's Alliance encourages all Meet and Confer leaders, both union and administrative representatives, to recommit to healthy and respectful meeting norms designed to build trust and understanding. The public apology issued by the DAE leadership is a good first step.

Every administrative and union member of the Meet and Confer process has been and will continue to be in community with one another. In order to continue advancing shared goals of making Durham Public Schools an excellent place for staff to work and for students to learn and thrive, this moment calls for accountability, repair, and a commitment to mutual respect moving forward. 

In Solidarity

The Education Action Team and c3/c4 Board of the People’s Alliance

February 23rd was the first meeting of the 505 Working Group (505WG) convened by the City to hear community/expert input on the prospects for affordable housing at 505 West Chapel Hill Street.

GOAL: The 505WG is a collaborative team of community advocates and experts working with City Staff. The purpose is to find a path forward for the start of affordable housing on the 505 West Chapel Hill Street site as soon as possible. 

IF YOU ARE INTERESTED IN OBSERVING AT THESE MEETINGS PLEASE CONTACT PEOPLE'S ALLIANCE AT [email protected] AND WE WILL HELP MAKE THAT HAPPEN.

Topics at First Meeting

1. We settled the question of whether a City ground lease could work (YES)
2. Parking: We made it clear that it's not impossible to come up with a plan to meet LIHTC requirements to maintain parking for the AH residents if 505 is developed in phases. Parking adjacent to the street will not be a problem. Off-site parking owned by the City (corner Duke/Main) may be available. And, it is very likely that the parking requirement for AH can be 1 space/resident (not 1.75).
3. Process: City Attorney Aarin Miles confirmed that the City is not required to use an RFP process to choose a developer. (And, incidentally, DHIC will not be disqualified because it is participating.)
4. Agreement that the Milton Small Building process will be long (developer search alone will be up to 2 years), rehab will be complicated and expensive, and there's no guarantee it will be successful or that the City will have subsidy.
5. 9% LIHTC deals in 2026 can be used for up to 120 units. The City does not know of any 2027 LIHTC applications in process. We'll need to monitor this.
6. General agreement on the viability of a mixed income building -- 80/60/30 % AMI -- which is allowed under LIHTC.
7. Next week we'll dig into "massing" (what will fit on the site), starting with a look at past proposals.

Members of this group are as follows (apologies for the lack of some of the names of participants)

Ketty Tellamaque - (Durham CAN)

Yolanda Winstead (DHIC)

Gregg Warren (DHIC)

Sherry Taylor (DCLT)

Ted Heilbron (Kelley Devt Co.) 

Stacey Poston (Durham City Staff)

Rick Larson (Durham CAN, 505 Coalition)

Staff from Perkins & Will