A split Council passes a controversial budget and affordable housing deal, showing how the battle lines have shifted after a contentious political season

Above: Council member Keith Young vied with his colleagues at the June 13 meeting, criticizing both a city budget than included a controversial police expansion and an affordable housing deal he said failed to provide units many cash-strapped Ashevillians could afford. Photo by Max Cooper.

The June 13 Asheville City Council meeting wasn’t the watershed political showdown that the hearing at its late May predecessor was, but it proved plenty revealing in its own right. A split Council passed the most controversial budget in years, while an affordable housing deal came under criticism both from locals and on the dais.

In the most sharply divided local political season in memory, all this revealed a lot about how our city’s shifted, what changes some locals are now demanding and how — despite that public pressure — a majority of Council still doubled down on its current course.

The affordability wars

For over a decade, affordable housing has loomed large in city politics. This is because Asheville has a housing crisis. A really bad housing crisis. A crisis so bad that Asheville makes national lists as one of the least unaffordable and most rapidly-gentrifying reports in the country. The in-depth 2015 Bowen report found that only those making over $70,000 could find find housing in Asheville that easily met their budget. Naturally, this leaves the vast majority of Ashevillians who make far below that in dire straits.

Not unexpectedly then, city political leaders have repeatedly proclaimed affordable housing as one of their main priorities. Over the past decade they’ve mostly tried to combat it through the affordable housing trust fund (which provides favorable loans to developers), incentive programs, federal grants, encouraging more accessory dwellings, partnering with Buncombe County and local agencies to fight homelessness and backing a redevelopment of public housing. One 2014 city-commissioned study found that Asheville was creating more affordable housing units than most other N.C. cities but that things remained dire. But the crisis continued to worsen, and even proponents of local government’s approach both on Council and city staff admitted that existing measures were insufficient to deal with the problem. Last year, they opted to put $17 million in bond funds for affordable housing before the voters, a step critics of their affordable housing approach had long pushed for.

Indeed, there are critics of the city’s policies on this front. Some affordable housing advocates assert Council and city government’s complacency has largely failed to stem the tide. These critics point to the relatively low amount of funds going to that trust fund (for most of the decade less than $1 million out of a more than $150 million city budget), policies they claimed favored hotels over housing in the city core, a lax approach to stemming Airbnb gobbling up the housing supply, a repeated unwillingness to protect tenant rights, failure to adopt measures like inclusionary zoning (which requires developers to build or fund affordable units in most new projects) or seriously push for higher density (Asheville has relatively low density compared to other major N.C. cities).

All that is just the tip of the iceberg. To put it mildly, the issue remains a complicated and contentious one. Importantly for the debate on June 13, critics have also questioned if affordable or workforce housing, as the city defines them, are actually that affordable.

For most of the last decade, city officials have discussed bringing another weapon into the arsenal by using city-owned land to foster affordable units. Over the past year, attention turned to the Hilliard Street property that housed the city’s parks and rec maintenance facility. Here, city officials believed, was a good opportunity to build affordable housing near downtown, where it’s most needed and locals would have ideal access to transit, jobs and services.

Incidentally, the presentation of the city’s plans for doing so marked the last Council meeting for Jeff Staudinger, the city’s long-time point person on affordable housing, who was retiring. So the hearing on the Hilliard project began with effusive praise from the Council dais.

“Jeff’s dedication, devotion and keen mind and endless curiosity about ways to find solutions has resulted in nearly all of the affordable housing policies we’re using today,” Council member Gordon Smith said. “Jeff’s relationship to people that are building this housing in our community has been on of great trust, cooperation and problem-solving.”

The Hilliard deal went like this: the city would lease the land to Charleston, S.C.-based Kassinger Development Services, who would build 64 units (49 one-bedroom, 15 two-bedroom) on the site. Thirty one of those units would be at Asheville’s considerably high market rate, but 33 would be affordable housing (as defined by the city). Specifically, 20 of those would be affordable (defined as the renters spending no less than a third of their monthly income on housing) to those making 80 percent of local median income ($30-40,000 annually, paying $650 for a one-bedroom unit and $900 for a two-bedroom) and 13 would be affordable to those making 60 percent of median income ($22-$30,000 annually, paying $500 for a one-bedroom and $700 for a two-bedroom unit). Those using the Section 8 program would have assurance their vouchers would be accepted.

The lease on the land would be for 50 years (compared to 15 or 20-year guarantees for most projects the city backs), during which the units would remain rented at an “affordable” rate and Kassinger would pay the city 10 percent of the rental revenue it collects from the property. The developers would receive $1.28 million in housing fund loans and a write-off to its city taxes for the development for 10 years. totaling $47,600 in incentives per unit, though over time, Staudinger said, the city would make much of that back as the loans were repaid.

Rain on the parade

The rental rates proved to be the sticking point. While most of Council saw an innovative new deal that would keep units affordable for an extraordinarily long time, members of the public who spoke mostly countered that the city was subsidizing nearly market-rate units still unaffordable for many locals while failing to build housing for those that needed it most.

“Zero for homeless people, zero for people at 30 percent [of median] income bracket, one-bedroom at $650, two-bedroom at $900 — that’s about market cost,” Melissa Clarke said. “This really looks like it does almost nothing for our actual low-income people.”

“I don’t see this as much of a step,” she continued, as some audience members clapped. “I can get a one bedroom for about $750 right now, so this saves people about $50? I don’t see how that does much for people who actually need housing.”

“You’re totally raining on our parade and that means we’re not selling it right,” Mayor Esther Manheimer replied to Clarke’s criticisms. Staudinger noted that the rates are based on HUD’s federal guidelines and that the project “had met and exceeded” the requirements that city set when it asked for bids and it would open up a significant amount of housing for Section 8 voucher holders.

But Council wasn’t all of one mind. Council member Keith Young asked if Council, in the future, could change its policies to make its definition of “affordable housing” more affordable than those offered by HUD if the developer was building on city-owned land. Staudinger replied that they could.

“Keith, we approved the RFP [the terms for developers to bid on the project] for this,” Manheimer interjected.

“I get that, I’m on board with that,” he said. “I’m saying that in the future, for city-owned land that we possibly look at improving these basic requirements to make it more affordable for those in our community, since it is city land.”

“I think it’s a great idea to look at that, but I want to bring things back to the numbers and reality of this situation,” Smith replied. Another developer, he noted, had declined to build affordable units on the site due to escalating construction costs.

“This isn’t the city building affordable housing, this is the city partnering with builders who are willing to take a lesser amount in order to work with us to create this housing,” Smith said. He added how “impressed” he was with the Kassinger group’s “unprecedented” deal, especially accepting Section 8 vouchers, keeping the units affordable for 50 years and sending the city some of its revenue.

“I’m keenly aware we’re in the middle of an affordable housing crisis and these rents will not be affordable to everybody,” Smith continued. “Having some $500 rents out there for something that’s locationally superior. It’s bikeable, it’s walkable, it’s on the transit line, it’s close to major employment centers. This is a win.”

He wanted to go further as well, Smith claime, but praised the “good faith” of the developers and asserted “we have to know the good when we see it and not make the perfect the enemy of the good.”

“I understand all of that, this is the first one I get that, but I don’t want to undervalue what we bring to the table,” Young replied. “They didn’t have to purchase the land, there is some added value in that. All of what you said sounds really good. I would say: tell that to someone who still can’t afford to live there, it means absolutely nothing to them.”

He continued that the city shouldn’t “undervalue ourselves that developers won’t want to build in the city of Asheville. That is not the case. Whatever we put on the table needs to be of greater benefit to the communities they’re serving.”

“It’s not ‘if we make this better, the developer are going to run away—,” he continued.

“Well, we had one run away, so that’s untested,” Manheimer replied.

“We can’t be scared of that,” Young said. “We don’t even have to offer this land. What would be the market rate if they had to pay for it? That doesn’t offset any of the cost?”

“It offsets a tremendous amount of the cost,” Council member Julie Mayfield said. Young added that the developer was still making money, even when they accepted Section 8 vouchers.

“We only had two applicants, if we required a much higher percentage of affordability would anyone apply?” Council member Cecil Bothwell said. “If no one applies you get nothing done.”

While Mayfield said she wanted to get more affordable units overall, “if we don’t have a private partner willing to take the deal then we’re nowhere.”

Young reiterated that he understood that, but felt the city could press for better deals in the future.

“This is a monumental step thing we’re doing, let’s take a step further,” he said.

Manheimer noted the city had already set guidelines for this project and Mayfield asked Staudinger to clarify the market rate for a one-bedroom in this location (he said it was $1200-1300 a month). The mayor then noted that Council was, in fact, in the middle of a public hearing.

Dewana Little also criticized the project as “not really pushing us forward” due to a lack of units meant for the homeless and low-income.

“What does affordable really look like when it’s unaffordable for the people who live here, who work good jobs?” she said. “This is not a test run for us when we can’t afford this.”

She asserted the project will worsen the city’s existing segregation and disparities, while the Section 8 provisions weren’t strong enough. “It’s still marginalizing a section of the community when you’re supposed to be talking about equity and inclusion. It’s still putting us in a place. Who’s going to live here? It won’t be people like me. I work great jobs, I can’t afford this.”

“How many times do we have to say the same thing before it sinks in?”

“If you’re looking for props, paying attention to the language is important,” Ashley Cooper said, as the units weren’t genuinely affordable for many people who weren’t white and middle-class. “It feels like it’s just language games to pass something through that will appease the need for affordable housing but doesn’t actually address the issues.”

“I’ve wrestled with this one for years: if you can’t afford it, it’s not affordable,” Smith said. “Affordable housing is the term we use from HUD.”

He countered the development’s critics that there was significant need in the economic brackets that could afford the rents offered by the Hilliard development. The city had to offer partnerships that were workable to private developers, Smith said, and more affordable rents wouldn’t be a acceptable to them (“let’s try it” someone replied from the audience).

“It will be important to the people that live here,” he continued.

“We’re not making this stuff up, we’re not deciding what’s affordable for you, we’re applying the federal rules,” Bothwell said. “Without those rules we couldn’t get the federal money. This is the best affordable housing deal we’ve seen in my seven years on City Council.”

While not doing enough, he said the deal was “a sea change.”

“Five percent of Asheville is in public housing or on Section 8 right now,” Manheimer said. “This is filling in these pieces that are not going to be affordable for everyone, but they are going to be affordable for a lot of people, and we know that because the average income in Buncombe County is $35,000.”

Scattered laugher broke out from the audience. “Since when?” someone said.

“Well, that’s what the data says,” Manheimer replied. “I wish it could be everything to all people, but I don’t think you can do that with new construction.”

“I can see that it is incredibly innovative and terribly disappointing all at the same time.”

Mayfield noted that the city put most of its attention towards creating housing at even more affordable rental rates, “this is just one project.”

“I will probably vote in favor of this, but I’m still discouraged about what we’re doing for deeply affordable units,” Council member Brian Haynes said. “I agree with Keith, we have this piece of land and we don’t have to sell ourselves short.”

To put the rents and income numbers for the Hilliard proposal in perspective Young said, without the additional income he gets as a Council member “I can’t live there.”

“So should we scrap this and go back to the drawing board?” Manheimer replied.

“No, you’ve got to start somewhere, I get it,” he replied. “The next iteration of this needs to be more, take the training wheels off.”

“I’ll be fascinated who accepts that invitation,” Smith shot back.

“We’ve got to put it out there, you don’t know until you try,” Young said. While he appreciated the work on the deal, he would vote against it.

“Symbolic,” Manheimer shot back. The Hilliard deal then passed 6-1, with Young dissenting.

Throughout the hearing, Young was repeatedly cut off or talked over by several Council members, especially during the exchange in the middle of the public hearing.

It’s worth noting, readers, that this isn’t the first time Young, Council’s only African-American member has been treated this way in the course of what is — from experience — a pretty typical Council policy debate. One may not agree with Young’s views on the Hilliard project (or any number of other issues), but none of his points were particularly unusual (Staudinger, effusively praised by Council at the meeting, has also noted that critics have valid concerns about how accessible the city’s affordable housing rates end up being). He didn’t personally criticize other Council members, just discussed a political disagreement about a complex problem and tried to raise concerns clearly held by part of the public, which is one of the points of Council’s existence. I have not seen members of this Council treat their other colleagues the same way, even when they disagreed or voted against their proposals.

Perhaps the next time the city does implicit bias training, it should start with the elected officials.

Dueling statements

Then it was time for the final vote on the most controversial budget Council’s seen in years. With a need for more funds for transit, repayment of the $74 million bond package and a recent property revaluation all among the many factors the city had to balance.

But it was a controversial proposal to expand policing became the focus of a large part of the debate, both due to major problems with racial disparities, equity and use of force in the APD as well as the desperation caused by rampant gentrification. Chief Tammy Hooper sought a $1 million a year expansion to escalate policing in the core of the city, claiming that an increase in crime and tourism justified it.

An array of civil rights, homeless advocates, left-wing groups and even some downtown businesses opposed the move, asserting that given the department’s current state it would massively worsen disparities and gentrification. The “A million dollars for the people” coalition instead wanted the funds directed to housing, transit and social services to address the needs they saw facing Ashevillians.

The controversy only increased when Hooper, notoriously hostile to public questions and criticism, largely skipped the usual budget process of presentations and discussions at city committees. It also emerged that many of the numbers she was citing were either dubious or lacked essential context. That led to open government activists and even some centrist Council candidates also criticized the move, asserting that the process around it was so broken the city should go back to the drawing board. But going into the June 13 vote, a slim majority on Council (Manheimer, Mayfield, Smith and Vice Mayor Gwen Wisler) all defended Hooper and the increase.

At a budget briefing in late May, Hooper announced the APD would push the new hires into the next budget cycle, reducing the expenses in this one. At the key public hearing that followed, locals sharply criticized the move for almost three hours (though a few defenders, mostly representatives of police groups, did emerge) in the most contentious budget hearing in memory.

As if all that wasn’t enough, a $2.5 million pay hike for city staff — supposedly justified due to major turnover issues — wasn’t discussed at all during the budget process, which is incredibly unusual. Half of those funds go to a pool of “merit” increases mostly directed to upper-middle and senior staff who already bring in relatively high salaries.

As a reporter, this was the least transparent budget I’ve seen in 12 years of covering City Hall. Major documents and changes weren’t available to the public going into the final vote, major issues weren’t discussed, Hooper was allowed to completely ignore the standard process for no fathomable reason other than she simply wanted to and the police expansion wasn’t even detailed in the final budget highlight document city staff posted.

Nonetheless, City manager Gary Jackson started the budget presentation off by claiming the budget was actually the most transparent and accountable ever, citing a list of policy goals and “performance measures” (e.g. getting five percent more women and minorities to apply to the APD).

CFO Barbara Whitehorn mentioned some of the smaller changes and noted (finally) the across-the-board pay increase for staff, though she didn’t highlight the $1.25 million “merit” fund.

When asked by Manheimer why the police expansion and other changes weren’t posted in the budget online, Whitehorn claimed it wasn’t typical practice to do so, but that they would be more transparent about such changes going forward. From experience, the city usually issues more transparent documents about changes throughout the budget process. The lack of those this year was highly unusual.

When property revaluations promise to raise the tax bill for local property owners (and given Asheville’s skyrocketing values, they certainly do) cities will generally consider lowering the rate to a level that takes in the same amount as the previous year, plus growth, a rate known as “revenue neutral.” Council was loath to raise it beyond the amount required to cover the bond repayments.

As Council considered their votes, the revenue neutral amount was set at $39.39 cents per $100 of prop value and the planned budget would lower the tax rate from 47.6 cents per $100 of property value to 43.39 cents (which would mean in increase for most Ashevillians) to cover the bonds and a half cent for transit improvements.

Manheimer noted she had asked staff to reallocate cuts from other departments to come up with about $650,000 in cuts or delays from other areas that could be re-directed to the bus system to avoid the need for the half cent increase intended for transit.

Jackson said he could do so by holding off on rehiring one of the Assistant City Manager positions (open after Paul Fetherston, raking in a $169,084 a year, left the city to work elsewhere), putting off some equipment purchases and reducing some contracting and “temp/seasonal” labor (which the city defines as anyone that works 20 hours or less).

“I’d appreciate having the flexibility to work with that and not be bogged down in the details” by Council, Jackson added.

With the public hearing done at the last meeting and Council opting (unusually) not to take comment on any of the budget changes that had happened since (they’d extend this to the open public comment period as well, which is also unusual).

Mayfield made the motion to approve the budget (with the lower tax rate), which Bothwell — previously critical of the police expansion — seconded.

Mayfield then made a statement in defense of the budget, saying that “the debate has also illuminated some significant divides in our community that are real and troubling and that require attention.”

While asserting that “the Million Dollars for the People campaign has been effective in making change,” Mayfield remained opposed to its primary goal and defended the proposed police expansion, claiming that the funds could not be allocated elsewhere (this is untrue, whether the expansion is a good idea or not Council can allocate funds from one department to another, as it did in the same proposal Mayfield was supporting to cover the increased funding for transit).

Mayfield, who’s the executive director of the environmental non-profit Mountain True, touted her background with Amnesty International and other organizations as evidence that “my roots are in social justice and human rights advocacy.”

“I care deeply about the very real concerns around race, equity, homelessness, and relationships between people and the police—and I commit myself to addressing these larger, systemic problems that demand and deserve deep, long-term solutions,” she said. But she felt that the critics were wrong about the police expansion.

“Many of you have said that providing additional funding for new officers won’t address any of these deeper problems. While that may be true to some degree, it does not mean the funding is not needed,” she claimed. “Asheville’s population is growing, more and more people visit here every year, and we are seeing significant new development across the city. This growth cannot be ignored, and I trust the wisdom and experience of Chief Hooper to know what her department needs.”

Despite the issues with racial disparities, use of force and the major controversies about Hooper’s own conduct and lack of transparency, Mayfield claimed that she’s “on the right path to addressing these larger issues.”

“This is a budget for the people,” she continued. “Can we and should we do more? Always, and we will. This year, we are increasing funding for affordable housing, sidewalks, crosswalks, greenways, parks, youth programs, partnerships with nonprofits, staff salaries, and retirement for firefighters.”

Particularly important to her was the increase in transit funding, something Mayfield’s pushed for in her time on Council, noting “expanded transit is all about providing opportunity and access to those who need it most – access to jobs, school, friends, participation in civic life.”

While praising Mayfield’s remarks as “good words,” Young then laid out his reasons for opposing the budget.

“This is the most attention we’ve had on a budget in awhile,” “It takes courage to use our voices to stand against what we believe are anti-democratic behaviors and practices and to stand for more democratic ways of governing ourselves. When one believes they are not part of a process, one would stand to question any and all outcomes moving forward. So what begins to happen is we protest. We protest the process, we protest the outcomes, we protest the intent. We protest, protest the process. It takes civic courage and skill where people of all backgrounds and views can share honestly and deeply.”

Elected leaders, he said, needed to sit down with people and listen to them, especially those “with different experiences from our own.”

On that front, he said, Asheville needed some reforms, especially giving locals direct control over some of the budget process and more of “a voice in decision-making.”

“This is an opportunity for our city to look at our budget process and seriously consider a move toward participatory budgeting,” he said. “This is a move that will bring people closer to democracy in our city and closer to transparency in decision-making.”

The city also needed to continue to move forward with creating a Human Relations Commission.

“In many conversations I’ve heard ‘trust is broken’ and with that, safety is compromised,” he said. “When people experience inequitable law enforcement, as revealed in Ian Mance’s report, residents may think the police are prejudiced and enforce policies unfairly. On the other hand police may feel blame for all kinds of social problems and may think they don’t get credit for the job they’re doing.”

Contra to Mayfield’s assertion that the department was moving rapidly in the right direction, Young said the department “continues to hemorrhage officers due to the lack of responsibility in identifying the root of our recruitment and retention issues and bringing those to Council, instead of what we have come before us during this budget cycle.”

Instead, he felt supporters of the expansion had opted for “short-term politics” over long-term solutions that would actually address the issues between the police and the community.

“We can’t disband or defund public safety: of course no one has mentioned that,” he said. “The community needs the police and the police need the community. But it’s essential we look at what’s next.”

While many parts of the budget “serve the community well” and allocated funds to help “the most vulnerable” but that the anti-democratic practices worried him. In support of the movement against the expansion and in favor of more effective police reform, he said was opposing the budget.

“A police officer should be a respected profession, not a menace to society,” he said.

Manheimer noted the process was the “most challenging she’d seen” but believed “what we have today really reflects a lot of input we heard from the community.” She called participatory budgeting “an interesting idea.”

Despite the controversy, few of their colleagues offered statements. The passage of the budget was, except for Mayfield and Young’s statements, marked by silence that contrasted the contentious debates of the past months.

The budget passed 5-2, with Young and Haynes opposed. The issues highlighted throughout the months of conflict over it, however, are unlikely to have such a straightforward resolution.

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