When Kathy King moved to Wilmington, she had no intention of becoming a landlord. A retired Army veteran, King came across a ranch-style stucco home listed in a public auction that was in rough shape, located next door to her parents’ old home on Wilmington’s east side. Though she’d visited the area growing up, she was new in town and picked up a flyer on the city’s rental housing rehabilitation loan program as she was trying to get to know the city.  
 
“Wilmington is a beautiful place to live. But the housing, just say it: sucks in terms of its availability,” King said. “Wilmington is getting further and further behind because people are coming here to live and there’s just not enough.”  
 
The city program mostly attracts developers, King was told when she first got involved. It grants homeowners up to a $125,000 interest-free loan to rehabilitate their properties, if they rent units to those making 80% or less of the Area Median Income (AMI); in Wilmington, that’s $42,700 for a single person, according to the U.S. Department of Housing and Urban Development (HUD).  
 
“I just figured that it’s an opportunity, and I’m not looking to get rich off of this – at all,” King said. “The need is so great. And this is just a little bit that I can do, and I’m happy that I’m able to do it.”  
 
King was awarded a roughly $67,000 loan in 2019, which she used to help fix and convert the dilapidated home into two one-bedroom units she rents to veterans for about $870 each. Behind the now-rehabbed home, she also acquired two units she will begin renting in March. Collectively, King owns over a half-acre within her growing mini-compound and dreams of building another house to provide more affordable housing to veterans.  
 
Her soon-to-be four affordable housing units represent just a sliver of the area’s overall need.  
 
A local government-commissioned housing needs assessment released in March 2021 projected a rental housing gap of roughly 7,400 units by 2030 in New Hanover County for rentals less than $1,575 a month. There’ll be another nearly 8,400-unit housing gap of for-sale stock over the next decade for under $300,000, the report estimates.

As of Feb. 22, the N.C. Regional Multiple Listing Service showed just 27 listings of single-family residences across New Hanover County priced at less than $300,000.  
 
Amid sluggish wages and historic inflation, the average rent for an apartment in Wilmington is $1,431, according to the latest RENTCafé analysis. A single person would have to earn at least $57,240 a year to afford that rate and not be cost-burdened (HUD defines this as spending more than 30% of income on housing). That’s well over what local entry-level and mid-career first responders, teachers, service workers and others earn.
 
In New Hanover County, more than half of all renters are cost-burdened, according to 2019 U.S. Census data analyzed by Cape Fear Collective.  
 
Pressure is mounting on public officials to take swift action to address the region’s mounting housing affordability problem.  
 
After years of summits, committees, task forces and meetings spent diagnosing the issue, advocates and many business leaders have sharpened their tone to jolt officials.  
 
Last month, officials abandoned the previously proposed New Hanover County $50 million housing bond. As initially presented, it planned to create an estimated 1,333 new affordable units over five years; another 302 would have been acquired or rehabilitated.
 
The forgone investment represented about one-tenth of the new affordable housing stock required to fill housing gaps over the next decade, according to the latest estimates.  
 
Opposed to raising property taxes to finance the bond, the New Hanover County Board of Commissioners unanimously approved an alternative plan Feb. 24, pledging to spend at least $15 million over the next five years. It’s not immediately clear how many units the investment will support, especially amid ballooning construction costs. Officials said they hope the private sector will step up to reach the previously discussed $50-million investment goal.  
 
As stakeholders sort out a big-time solution, smaller-scale local efforts to preserve the area’s affordable housing stock – from an individual landlord like King to a high-level social investment model – are underway.  
 
Cape Fear Collective first entered the housing sphere in late 2020 and has since expanded its portfolio of affordable units, which it’s working to rehabilitate and preserve.  
 
“Our main goal overall is affordable homeownership,” said Eileen O’Malley, Cape Fear Collective’s director of operations. “We all know that housing is not getting any cheaper, especially in this area, and one of the biggest generators of familial wealth is homeownership.”  
 
The nonprofit has acquired 92 properties with 113 units, according to O’Malley. Cape Fear Collective purchased a majority of these units (71) in January for $10.6 million, mostly single-family structures in and around downtown. The move to scoop up these properties was made possible through Collective Ventures, the nonprofit’s social impact investment program that promises modest 2-5% returns.  
 
Live Oak Bank is one of the primary sponsors of the initiative, having infused it with $7.5 million, according to a bank official. This year, the nonprofit’s plan is to assess its new slate of tenants, and eventually, work with them to determine whether they are interested in a path to homeownership or would prefer renting. In either scenario, Cape Fear Collective’s goal is to preserve the area’s naturally occurring affordable housing stock. The group is hiring two project managers this month to head up its assessment process before it focuses on adding any more to its portfolio, according to O’Malley.  
 
“We recognize the fact that it would be very difficult for one entity to pretty much solve everything,” she said, citing the critical work done by partners including the Cape Fear Housing Coalition (CFHC), the Cape Fear Community Land Trust, Habitat for Humanity, Good Shepherd Center, LINC Inc. and more.  
 
“We try to at least keep that in mind as we try to go and do as much as we can,” she said.  
 
At a recent CFHC event, Live Oak Bank President Huntley Garriott said the Collective Ventures model is already proving to be successful: “It’s actually working, and I think it’s scalable.”  
 
It’s “not going to solve 10,000 housing units – but it’s a hundred. And it’s going to be another hundred. And that’s a piece of it, right?” he said. “There is not one answer to this. It’s too big (of) a problem, but it is solvable.”  
 
Garriott was among a group of business leaders that urged public officials in a January op-ed to commit serious capital to address the issue, arguing more piloting would just further “exacerbate an already dire situation.” 

Taking a passive approach will result in a drive-until-you-can-afford-it model, UNCW economist Adam Jones said at a January real estate luncheon. Workers on the periphery will have the longest and most expensive commutes while being paid the least, Jones said. “So we're going to end up having difficulty finding the workers we need in the central areas,” he said.  
 
A lack of affordable housing can stunt economic prosperity, according to the National Low Income Housing Coalition; constrained options can eat at families’ earnings potential and slow GDP growth.  
 
Samuel Gunter, executive director of the N.C. Housing Coalition, said at the CFHC event he’s trying to get people to understand affordable housing as “privately held public infrastructure.”

Former chair of the joint city-county workforce housing committee, Dave Spetrino, said it’s cheaper and easier to improve and make use of existing but inaccessible run-down homes than to build new ones.  "These homes are rotting," he said, due to hurricane damage, a lack of funds and a lack of leadership or effort to get them into compliance.

“Our city will continue to thicken up,” he said. “The best thing we can do is take housing just as seriously as we do safe drinking water, nourishment and education.

When it comes to new construction, the Low-Income Housing Tax Credit (LIHTC) program, managed by the state and funded with federal money, is the state’s largest resource, Gunter explained. The program provides financing to incentivize developers to build affordable housing.  
 
Paul Kennedy serves on the N. C. Housing Finance Agency responsible for making recommendations on LIHTC awards. Statewide, the program’s roughly $250 million budget turns into about 2,800 new affordable units annually according to Kennedy. “That's a drop in the bucket,” he said.  
 
Local loans or grants can provide a boost of financing to help see these projects through, an option that is looking increasingly more desirable as construction costs have created gap financing needs.  
 
Katrina Knight, CFHC chair, has asked leaders to dedicate at least $100 million this year in both public and private funds.  
 
“We have studied and discussed and made recommendations only to be asked to research some more,” Knight said. “The only outstanding question is what we have the political and moral will to make happen for our community, and truly for the benefit of us all.”