A New Investment Model for Workforce Housing in New Hanover County

By Chris Coudriet, County Manager  

Housing affordability is not a new challenge in New Hanover County, and there is no single solution to it. 

For several years, New Hanover County made significant direct investments to help create and preserve affordable housing. Much of that work supported households with the greatest housing needs, generally those earning below 60 percent of area median income. Those investments were important, and the need they addressed remains. 

They also demonstrated something about the housing challenge – different parts of the market require different tools. 

New Hanover County has historically defined workforce housing as households earning between 60 to 120 percent of area median income. That range begins, intentionally, about where traditional subsidized affordable housing generally ends. It includes many of the teachers, nurses, sheriff’s deputies, firefighters, people working in the trades and hospitality, and others we often have in mind when we talk about workforce housing. 

These households may earn too much to qualify for traditional assistance while still finding that market rents take too much of their monthly income. 

In 2025, the Board of Commissioners ended the county’s annual direct funding approach to housing. But its interest in finding ways to support workforce housing did not end with that decision. 

That created a different question for us to answer: Could the county help produce housing for working individuals and families without relying on the same direct funding model? 

On July 13, 2026 the Board unanimously approved one approach to doing that. 

The county is investing $2 million in Proximity Blue Clay, a 236-townhome community being developed by Cape Fear Development on Blue Clay Road. The county holds a note at 5 percent annual interest, with the full $2 million principal scheduled to be repaid after 10 years. That means the county receives $100,000 in interest each year, or $1 million over the life of the investment. 

In exchange, all 236 townhomes will be rent-restricted for 10 years to households earning between 60 and 90 percent of area median income. 

That does not cover the full workforce housing range. But it directly reaches a part of the housing market that has been difficult to serve through more traditional affordable housing tools. 

For the people who live there, the difference is meaningful. Current projections put a one-bedroom at about $1,311 per month compared with a market rent of $1,828. A two-bedroom would be about $2,001 compared with $2,339, and a three-bedroom about $2,345 compared with $2,795. 

Depending on the unit, that is roughly $340 to $520 each month that stays in a household’s budget. 

What makes this approach different is how the project is financed. 

Private development typically includes investor capital seeking a considerably higher return. In this project, the county’s investment, together with capital from other local community investors, replaces a portion of that financing at a 5 percent return. The savings created by that lower-cost capital help make the reduced rents possible. 

There is no county grant. The $2 million is expected to come back, with interest. The project also does not depend on federal housing tax credits. Working through private development means these homes are expected to be delivered in roughly 18 months rather than the considerably longer timeline often associated with federally financed affordable housing projects. 

There is a tradeoff. The affordability commitment is for 10 years, not permanently. That is worth being clear about.  

It is also worth being clear about what happens at the end of those 10 years. The homes do not disappear. Instead, they become established housing stock in our community, the kind that often becomes naturally occurring affordable housing as newer homes are built and the market continues to evolve. 

At the same time, the county’s investment is designed to come back. 

If the investment performs as expected, the county receives interest along the way and its principal back at the end of the term. Those dollars can then be available for another housing investment. 

That is the idea behind the Board’s second action. 

An additional $2 million has been reserved in the county’s Revenue Stabilization Fund for a Workforce Housing Investment Fund. No future project automatically receives those dollars.  Any proposed investment will have to come back to the Board of Commissioners for consideration and approval, with the same focus on generating an annual return and recovering the county’s principal at the end of the investment term.  

That gives us an opportunity to test whether this model can work with other developers and other projects. 

Can county investment help private developers produce workforce housing at scale? Can we earn a reasonable return on public dollars while lowering rents for working households? Can we reach different parts of the 60 to 120 percent workforce housing range over time? 

And, most importantly, can we use the same public dollars more than once to do it? 

We will learn as this project, and any that follow, move forward. 

Traditional affordable housing remains necessary. Producing housing for individuals and families with the greatest need is difficult and expensive work, and public investment will continue to be an important part of making those projects possible. 

Workforce housing presents a different challenge and may require a different tool. 

For this project, $2 million in county capital is expected to help produce 236 rent-restricted homes, earn a 5 percent annual return and come back to the county after 10 years. 

That is a different way of thinking about the county’s role in housing. Rather than spending the money once, the goal is to put it to work, get it back and, if the model proves successful, put it to work again. 

I appreciate the Board’s willingness to consider a new approach and the staff work that went into building the structure behind it. 

The test now is whether it delivers what it is designed to deliver. If it does, New Hanover County will have another tool available to address a housing challenge that is not going away.