Despite a setback to a plan to build affordable housing on town-owned land, Chapel Hill’s Mayor Mark Kleinschmidt says the project remains promising.

“While it’s a very competitive process to get this funding and these tax credits, we have a very competitive project that will stand up well if we have a completed application,” says Kleinschmidt.

Raleigh-based non-profit DHIC announced recently that a plan to build 144 affordable apartments on 8.5 acres of town land had stalled because the application for low-income housing tax credits was not properly completed.

Nonetheless, Kleinschmidt says he’d like to continue to partner with DHIC to resubmit its application.

“If we were to go forward looking for another housing provider to partner with, it’s going to take us longer than it would be to just go ahead and reapply in the spring.”

The DHIC project is part of the wider Ephesus-Fordham revitalization plan.

In May the Council voted to rezone 190 acres of land, a move town leaders hope will spur redevelopment of commercial and residential properties near the Ephesus Road- Fordham Boulevard intersection.

But critics worry that the new zoning will discourage development of affordable housing at a time when landlords are already raising the rents on existing apartments.

In response, Kleinschmidt notes the Town Council set aside several parcels of land for later rezoning while town staffers explore how to offer affordable housing incentives for developers.

DHIC will be eligible to reapply for the low-income housing tax credits in January.

Mayor Kleinschmidt discussed the DHIC project and the future of affordable housing in Chapel Hill – as well as lessons learned from last week’s Mayors Innovation Project – on the air with Aaron Keck earlier this week.