‘Creative idea’: Durham allocates $1.75 million for those building tiny homes on their properties

DURHAM, N.C. (WNCN) — Applications close this week for the City of Durham’s pilot program dedicated to increasing housing affordability.

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As part of the effort, little homes will pop up all over the Bull City.

“Cost of living has increased significantly over the last several years, so things have become a lot more unaffordable to the majority of residents in Durham,” Coram Houses Business Development Manager Felix Sebera said.

“For existing homeowners, property values have gone up, which is great if you want to sell your house, but not so great if you want to continue to live there and you have a fixed income, for example. So your property taxes go up and you might have trouble staying in your house,” Sebera added.

That’s why Coram Houses is collaborating with the City of Durham to launch an Affordable Accessory Dwelling Unit (ADU) Pilot Program.

It provides a total of $1.75 million in construction loans for Durham residents who want to build tiny rental homes on their properties. The units must remain affordable for 30 years.

“We know that there is a tremendous need for affordable housing in the City of Durham, just like communities across the country,” City of Durham Housing & Neighborhood Services Director Sarah Vinas said.

Those selected for the program will receive an average loan of about $80,000. Sebera said that’s enough money to build a tiny home around 350 square feet.

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The goal is to produce around 20 ADUs citywide. Sebera also said loan selectees could build larger versions of the homes with their own investment.

According to Coram Houses, six are reserved for homeowners who make below 80 percent of the area median income. Four homes will be built in historically disinvested communities. Two of them will be duplexes, and two others are slotted for civic organizations such as churches.

“We estimate that we need 25,000 rental housing units for households that earn below $50,000 a year,” Vinas said. “So we are tackling that need using a variety of different strategies. This is the latest one. It’s a creative idea that we’re trying out.”

Officials said the plan would allow homeowners to generate rental income.

Selected homeowners get a two-percent fixed interest rate, and tenants must make 80 percent of the area median income or below. That includes a family of four making a little over $100,000.

“I hope that all of us, so the city, Coram houses, the community of Durham, realize that there are ways that we can collaboratively address the challenges we face together and build a better future through the building of ADUs,” Sebera said. “I think that would be really cool and a beautiful takeaway from this program if everything goes well.”

Project leaders said they’ve received nearly 40 applications so far.

According to the city, the money for the program comes from a 2019 affordable housing bond.

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