Two Issues, One Nonprofit | Can Thriving Tourism and Affordable Housing Co-Exist?

It took the formation of Thrive AVL, a relatively new nonprofit here, to formally connect tourism and affordable housing—and the policies and practices around them—as affecting one another.

Casey Gilbert and Kate Pett of Thrive AVL go into detail about what’s called sustainable tourism—that is, encouraging tourism that enhances all avenues of life. They also dissect a recent Thrive AVL study that, among other surprises, found that much of the affordable housing initiatives in Asheville leave out those who need help the most.

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Transcript

Matt Peiken: You talked about affordable housing and sustainable tourism. Are these bedrock causes at the heart of Thrive in perpetuity, or is it that Thrive takes a look at the landscape and here are the issues now, and then decides this will be our project or our undertaking for the next X number of years?

Casey Gilbert: So the issues that we're working on are focused on affordable housing right now the landlord tenant partnership and the Buncombe rental assistance Collaborative. We'll be moving into more work around destination stewardship. We're working with Black Wall Street on a BIPOC incubator program, and hopefully, if all things go well, working with Explore AVL and other partners on looking at destination stewardship as a philosophy for how we look at tourism and make it work better for the community.

So we want to be responsive. We want to listen to the community. We are evolving, the organization is evolving as the community evolves. 

Kate Pett: I think that Casey's really nailed it is that we listen to the community. This was really an organization that was born out of conversations from diverse leaders across the community who wanted to see more collaboration. They wanted to look at how were some of the challenges in our community really being exacerbated by rapid growth and change.

And two of the issues that really emerged to us. One was a driver of that change, which is tourism, and the other one is really an effect of that change, which is the scarcity of affordable housing. That played into our decision to identify those as our driving issues. 

Matt Peiken: What are the points of merging for these two?

On one hand, you think affordable housing and tourism itself, a lot of people that I've talked to mention tourism and its effect on our housing stock as anathema to affordable housing here. How do you define sustainable tourism? 

Kate Pett: Sustainable tourism, the definition that we used when we gathered community leaders to talk about this issue was the kind of tourism that really benefits residents as well as creates a thriving tourism economy and also protects our environment and our assets in a way that we can continue to have a robust tourism economy long into the future.

Matt Peiken: Okay, How can outside entities or everything from the Tourism Development Authority to hoteliers to tour guides Restaurants, bars, every industry that serves tourism here. How can they control the behavior of tourists? What can be done, what is being done elsewhere that is informing your work in terms of developing sustainable tourism.

Casey Gilbert: Sure. I think control is a tricky word. But I think we can mindfully plan, mindfully plan and manage. Absolutely. And what I'm excited to talk about is that we, as an organization, through an ideas to action cohort process, brought together 35 stakeholders to look at this and What we discovered is that there is a model that's being used across the nation and across the globe and it's called destination stewardship.

And right now there's 25 DMOs. Those are destination management organizations or destination marketing organizations. There's 25 DMOs and seven state DMOs that are using a destination stewardship management plan. That have destination stewardship councils. So there's best practices. There's leaders. And I think this is the future of tourism.

Matt Peiken: Can you give us some examples, just a couple of things that come into destination stewardship? 

Casey Gilbert: Absolutely. The focus is. It's, as Kate mentioned, a lot around the natural environment and climate impacts and environmental impacts. And it's also around maintaining the authenticity of your community and highlighting the culture of your community.

And so whether it's access for people to the tourism sector that wouldn't have otherwise had access to those dollars. So really being mindful and looking at existing businesses or growing businesses within the cultural sector so that they can access those tourism dollars or looking at those environmental impacts.

And there's a way to take a gauge of how tourism is impacting your community through an assessment. So you can do an assessment looking at environment, culture, community. So that's the first step is really, how is tourism impacting our community? Let's look at it. Let's get a baseline and then we can move forward with a plan from there. 

Kate Pett: I think in this community too often the conversation of tourism really is It's just about the tourism economy and it's just about the financial effects of tourism, which we know it's a huge boon for our community.

And destination stewardship is really about looking much more holistically about the impacts of tourism. So really evaluating how it is affecting these other significant components of living in this community, the environment, our culture, our quality of life, all of these different things, including housing.

And one of the things that's really different about places that are implementing this destination stewardship model is that they have many different people around the table. Not people just from within government and tourism, but it's a conversation that really includes all different kinds of people from the community determining how they want to see tourism shape their community for the future.

Matt Peiken: You know, This is one of the things that's a real pet peeve of mine around How the TDA, and I'm not blaming this TDA specifically. I think a lot of TDAs, if not all of them, operate this way. That the people on their boards who decide where the money goes, where tax dollars that come in through tourism, where that goes, it's entirely, almost entirely from the hotel industry.

It's people who make their livings through tourism and not a broad cross section, like you're just mentioning, a cross section of our community really representing different needs, different constituents who are not at the table right now. How vital is it, in the course of this work that you're doing around sustainable tourism, how vital is it to change the dynamic of money that comes into the TDA itself?

Because from my eyes, and correct me if I'm wrong here, the many millions of dollars that come in through the occupancy taxes, Unprecedented and unrivaled in our community. There's not yet another source of fungible money that comes in through tourism. Is your work working around like, not putting that aside, what can we do, or do you think it's important at some point to change the very structure of how that money is 

Casey Gilbert: used? 

I would say that conversation is really on everyone's lips right now, and so I think our focus as Thrive Asheville would be on, making that part of the conversation, but not the conversation, right?

We're working on sustainable tourism. We also are going to stay in the game talking about affordable housing and those impacts. And it's interesting, I was just last night at a panel discussion, the AVL watchdog hosted and they were trying to show the links between, is there a link between tourism and the effects on affordable housing?

And is it because of hotel rooms or is it because of Airbnb and, short term rentals? So trying to make those linkages is difficult, but I think When we're looking at sustainable tourism development and affordable housing, what we need to remember is there's people who make a living from tourism who are working for us every day serving locals serving tourists, and they need to have affordable housing.

They need to have a place to live. We want to keep them here. We want to keep our creative economy here, our arts folks here. So I think our approach will be not just focused on the TDA's budget, but how can we look at this destination stewardship model, make it work for the community and bring stakeholders together to talk about it.

Kate Pett: One of the outcomes of our work in the Ideas to Action Leadership Forum, where we brought together tourism sector leaders with community advocates, is a report that appears on our website, ThriveAVL. org, and it's on destination stewardship. And one of the things that we did with a small working group that represented tourism sector leaders, arts leaders, business and nonprofits is that we looked at eight other communities around the country who have already started down the road of destination stewardship.

And we cited some of the specific things that are happening in those communities. Some of the things that make me really excited is the way in which some communities are collaborating around transportation so that visitors can have car- free visits would be wonderful if people could arrive at our airport and didn't have to have a car to go visit certain trailheads or to come to downtown Asheville.

That's happening in other communities. Other kinds of things that are happening in other communities are sustainable business incubators, where businesses are actually being certified as sustainable businesses and Tourism traffic is being driven to those businesses so that we can really support local sustainable efforts to create a thriving local business sector. So I think there's great examples of what other communities are doing and I encourage people to check that report out. 

Matt Peiken: Now, you're trying to general say it's more than about money, but it takes money to make a lot of these things, if not all of these things happen along with a will a real sense of urgency to make these things happen.

Our community is starving for money. We don't have big corporations here with highly paid workers who are raised in philanthropy, who are giving to all our nonprofits and spending money locally, keeping money local. So that's among the reasons our community really depends on tourism for our economy and keep jobs going.

There's thousands of jobs that depend on it. Is the general makeup of our community, the fact that we don't have a diverse economy in that way, is that one of our challenges in seeing through one of your goals in this sense?

Kate Pett: I think absolutely. I think that it is a challenge that we face as, non profits, also in our local government when we try and really tackle big problems like affordable housing, like transportation.

So I do think that working with the tourism sector is a key opportunity. And I think we're seeing greater collaboration between local government, both city and county, to work with the TDA. to plan for how the influx of dollars that's going to continue to increase over the next decade, how that money can really be used so that residents and tourists alike can benefit, projects like the greenway in the river or the blue way in Woodfin that matter to locals, but also will tick the boxes that the TDA has to tick based on state legislation.

So I think that's really a two-way street. And our local government leaders need to step up to the plate and really bring projects of scale that can really benefit locals.

Matt Peiken: What brought us into this conversation today was the other leg of the work you do, which is affordable housing.

Before we dive fully into that, can you talk about how your work in both these sectors, in terms of sustainable tourism and affordable housing, how do they work in concert with each other?

Casey Gilbert: Anytime you have these big issues, there's going to be intersectionality, right? So there is an interaction, absolutely, between sustainable tourism or tourism and affordable housing. But I think we're treating the issues right now, at least, as separate advocacy in programmatic issues.

So we really started this work on affordable housing. We have our landlord tenant partnership program right now that we are working on to really address this concern around the usage of federal housing vouchers and making sure that people in our community can move into more Sustainable housing and get them safe and secured.

So that is one thing that we are working on with affordable housing. And then with the sustainable tourism piece, as I mentioned, we'll be working on the BIPOC entrepreneurship program. So they're separate, but they definitely overlap, but we're approaching them from an advocacy and programming perspective a little bit separately. 

Kate Pett: Thrive issues tick a few boxes. They meet a few criteria. One is that they involve working with local government. Another is that they affect equity issues in our community. And they have something to do with kind of the effects of growth and change in our community. And so both tourism and affordable housing really checked all those boxes in the way in which they're really both cause and effect of these big Changes in our community and they require collaboration with local government and other sectors to really create a sizable impact So that's why these two issues are Thrive issues right now 

Matt Peiken: When I saw your Opening Doors study, what I found alarming, and tell me if I'm framing this or if I'm phrasing this correctly, that city investments in affordable housing often, and more often still, that they're not affordable for people making less than 50 percent of the average median income. I found that really interesting that even housing that's proposed and designated for affordable housing, it's unaffordable to many people. Talk about the roots of this study. What prompted you to even look into the affordability of affordable housing? 

Casey Gilbert: I will just say, having a background in public policy can always be so well intentioned, and when we develop policies, policymakers or whoever is working on these policies, we always have good intentions, and then there's these unintended secondary consequences that sometimes we don't look at, or we don't go back and evaluate the policies to see, are they meeting the true impact and intention of what we set out to find, and that's when, Kate and we have a consultant, Garrett, that works with us.

They really dug into the data and that's how we ended up at this report. So Kate can tell you a little bit more about that. 

Matt Peiken: Yeah, Kate, talk about the very genesis of when this became or why this became a point of study. 

Kate Pett: Yeah, one of the reasons why this became a point of study is because City Councilwoman Antanette Mosley said about two years ago in a City Council meeting, she said that she really wondered whether or not people of color in Asheville were really benefiting from the city's investments in affordable housing.

I thought, how could it be that, we're working on affordable housing and some of the people who need it the most might not be benefiting. So we took that as an interesting challenge to look at whether or not the things that we were advocating for, which is increased investment in the housing trust fund, increased investment in the Land use incentive grant.

These are the two financial tools that the city has to increase affordable housing Whether or not these were really helping all different kinds of people in our community. We dug into it and what we found as you mentioned is that because affordable housing is really linked to this kind of mass aggregate figure called the average median income, we don't know as well as we should about who is benefiting. And our financial tools in the city have really helped us develop housing that is out of reach for many folks because we've invested in housing that is affordable to some, but still leaves out people who really need deeply affordable housing.

Matt Peiken: Is that because it's always done as public private partnerships? That you can develop these projects, but you don't set the rents? Explain to me why these projects are unaffordable to sell to people when they are designed to be affordable. 

Kate Pett: Yeah. Developing affordable housing is really expensive.

We all know that it's expensive to build any kind of housing. Right now, and when we ask private developers to be a part of developing affordable housing, we have to in some way compensate them, right? We have to close the gap between the market rate and this affordable rate that we're going to ask them.

If we ask them to deliver affordability for people who make close to market rate, so people at the highest kind of affordable income levels, then the subsidy that the city has to use is smaller than if we're asking them to provide housing for people at the very lowest levels of affordability.

The people who need the most affordable, lowest cost housing, that's very expensive to develop. So sometimes cities decide that what they should do is develop as much housing as possible. And the goal is really to try and create as many units as possible. And so the bang for your buck goes further when you're investing at the higher levels of affordability. 

Matt Peiken: I know that your study addressed this, that we should change the conversation to have affordable housing be defined, or effective affordable housing be defined by more than the number of units that come in, and we'll get into that in a little bit.

So you talked about it's incredibly expensive to do this. Is it that the two tools that the city has and the county has at its disposal, they're finite sums of money, that there's just not enough money in those pools to be able to fully subsidize it. Everybody who needs housing is that the crux of it.

Kate Pett: That's absolutely true. I will say that there are more tools than just those two financial tools, though, just as a reminder, we can look at zoning. We can look at fee rebates. We can look at other ways in which we could make it easier for developers to create affordable housing. But right now, the Housing Trust Fund and the Land Use Incentive Grant are our two primary ways in which we co invest with private developers to create affordable housing.

Matt Peiken: How are those channels funded? 

Kate Pett: The Housing Trust Fund is funded by every year, city Council sets aside a certain amount of money for the Housing Trust Fund and a significant amount of the Housing Trust Fund dollars actually came from the Affordable Housing Bond that was passed about five years ago.

The Land Use Incentive Grant is a tax credit. So all of us help fund that. So when a developer accesses the Land Use Incentive Grant, For 20 years after, or sometimes even 30 years after creating their affordable housing project, they don't have to pay taxes. So that's really a shared burden that all of the rest of taxpayers pay in the 

Matt Peiken: future.

So it seems there's two things going on here. That because there isn't enough money in these pools, that Rents have to be set at a certain level because the city and county just can't put enough money in to fully subsidize or these units are so small, we pack so many units in, that they are not accessible to families that like a micro unit or, 500 square foot apartment just isn't feasible for a family? Is that, and you also addressed that in your study. Are those the two things or are there more things going on here that are barriers to the way things are happening?

Kate Pett: I think you really hit the nail on the head there, especially with that first piece, which is that when we set affordable rents, The highest level of rents that are affordable are going to require less money from the city and the county. So that's where the city and county have tended to make their investments because again, they're trying to create as many units as possible.

I think it might be helpful for a second to just say that all across the country, the way that we determine affordability is by talking about the average median income. And here in Asheville, we just learned in July that the average median income for a household is $90, 000. 

Matt Peiken: What? Really?

The average median income in this region is $90, 000?

Kate Pett: Is 90, 000 for a household.

Matt Peiken: I was surprised to hear it's that high. 

Kate Pett: Yeah, many people are surprised to hear it's that high. And that's part of the problem, because what that means is that we've got some folks who are really way above that number, we have a lot of folks below that number and as that sort of gradient between high and low stretches out further and further, there's still a lot of people way under that.

Matt Peiken: And you use as a point of comparison, between 2018 and 2022, Um, and I want to point out to you that three quarters of new affordable housing units were for people making more than 60 percent of the average median income.

So that is what roughly about 50, 000 a year or more. So that leaves out everybody below that. And that's about three quarters of the units that were developed in that time. The study doesn't go into depth about this, but I know it was at the heart of your study to not at the heart of it, but one of the study.

Ripples of the findings that it disproportionately affects people of color. Yeah, families of color 

Kate Pett: Yeah, because we've only looked at income and we haven't disaggregated data We really haven't understood what is the impact on non majority populations? So this I think is a takeaway for everything we do in the city and the county is that we should be disaggregating our data to understand how people of color how non majority populations are affected by these policies. As Casey said, of course, this was, has been well-intentioned, but without really understanding who was disproportionately benefiting, people who are at the higher ends of income.

We left out a tremendous important group of people who have not been able to access this housing. 

Casey Gilbert: It's also worth mentioning that one of the great effects of this report is that the city is currently looking at a whole review of their affordable housing policy and they've hired a consultant and what this did was it just made them take a moment and say, oh, okay, let's look at this holistically, let's look at the unintended secondary consequences of some of our affordable housing policies and let's take a step back and see, to your point, what are some other tools that we can use moving forward.

Thank you. This is the beautiful thing about policy. It is flexible. We can go back and review what we're doing. We can go back and take a second look. And I just want to commend the city of Asheville for taking the time to say, Alright, let's take a pause. Let's look at what other cities are doing.

Let's look at what we can be doing better and how we can serve our community. They're going to be looking at all these policies across the board. And we'll be right there beside them to help in whatever way that we can. 

Matt Peiken: It's not just policy though, right? It's priorities. Because funding isn't a policy. You've already, you're already deciding you want to do something about affordable housing. The city has declared that loud and clear. So it's not just policy, it's how does affordable housing and making this housing affordable to as broad a range as possible, how does that fit into the priority of budgeting?

So that has to be part of this conversation. 

Kate Pett: Yeah, and I think that is exactly right, that the priority has been to develop more, the greatest number of units possible, and also there's been a drive towards smaller units, single double bedroom units, two bedroom units. So what we've learned is that first of all in our community as incomes have increased, not all groups have experienced a growth in their income.

White led households have had a dramatic rise. in their income, while Latinx community has had a more subtle increase in income and largely our Black African American households have remained pretty flat over this time, their incomes. So again, when we have. Directed affordable housing funds to the higher levels of affordability.

We've really left out our black and brown community from being able to access that new affordable housing. 

Matt Peiken: Yeah. Let's talk about some of the solutions you pointed out, which I thought was great. And you did it very succinctly in this study. You mentioned several solutions, one of which comes with some caveats, the increase increasing access to housing vouchers.

Talk about that and talk about what some of the problematic aspects of housing vouchers or at least the way they're done now. 

Kate Pett: Yeah, Thrive Asheville started looking at this challenge regarding housing choice vouchers four years ago when we first started.

Because we saw a real opportunity here for the community to increase the resources we have available to invest in affordable housing. What we saw is that each year millions of dollars of federal funding were being left on the table because Housing choice vouchers were not widely accepted in our community.

Matt Peiken: Why is that?

Kate Pett: We convened a group of landlords and asked them that same question. What are the reasons why you are reluctant to accept housing choice vouchers? And what they told us was really that there were three reasons. One of the reasons was that they found the process of joining the program of accepting housing choice vouchers to be really bureaucratic and slow.

Another one is that it wasn't profitable. Housing choice voucher rates weren't keeping up with the market and so they were actually losing money by accepting vouchers. And the third reason is that there were some, maybe due to stigma and also maybe due to some true experiences in the past, there was a concern about how well the property would be taken care of. So Thrive worked with landlords and community advocates to design a solution that would really address all three of those concerns.

We hired a landlord navigator who helps make the process go much more quickly, a landlord navigator who works with landlords to guide them through the process and also to really support them throughout the life of their tenancy. We also made it more profitable by awarding landlords financial incentives that would help close the gap between market rate and voucher rate. But the other great thing that happened actually is that the housing authority really advocated really in an effective way to increase the rates. And voucher rates are very competitive now. They're going up again in 2024. And so accepting vouchers has become much more profitable.

And the third thing that we did as part of this solution was that we provide damage mitigation funds. So should there be a problem, should the unit at the end of the tenancy have beyond normal wear and tear, we actually provide landlords with up to $5, 000 in damage mitigation insurance to address that.

Matt Peiken: You also talk about in the solutions you mentioned boosting the supply housing supply by making construction less expensive. How can we do that?

Kate Pett: So in our opinion, one of our recommendations that comes out of this study is that we see that as a community we're going to have to invest in greater amounts in these financial tools that can help meet developers where they are.

The bottom line is we have to make affordable housing affordable for private developers to develop. And the two tools that we have, the Housing Trust Fund and the Land Use Incentive grant, should be priorities for our community to invest in, in ever greater amounts going forward. There's a rumor that perhaps there will be another affordable housing bond in the future here in the city of Asheville, and I know that we would be strongly supportive of the community getting behind that so that we can really increase the dollars to help construct more affordable housing.

Matt Peiken: And the last of this in the solutions was assessing value or effectiveness by factors other than the number of units. We alluded to this earlier. How else can we assess the value or effectiveness of these programs other than, hey, we've introduced 400 new units into the supply? How else should we gauge success? 

Kate Pett: As a community, we have to keep looking at our own data. We have to understand who it is that needs affordable housing. And we have to be sure that we're designing affordable housing that will meet all different kinds of people. So one thing is we know that we have to not just look at the average median income, but we have to disaggregate that by groups.

And we have to be sure that we aren't just continuing to invest in one part of our community without investing in another part of our community. That's why we make a really clear call that we should be investing in deeply affordable housing, which is housing below 50 percent of the AMI. Another way that some communities are doing this is by really trying to develop housing for certain kinds of workers.

So for instance, in some communities, even tourist- facing communities, tourism economies like ours businesses are working really closely with local government to develop housing that's specifically for service industry workers, for example. So we could look at what are the kinds of people that our community needs.

We have a small example of this in our community where there's been some housing that was developed specifically for teachers. So most teachers do not make the average median income. We know that these are critical parts of our community. So, working with local government, our school districts, philanthropists in our community, that's another way that we could be sure that affordable housing construction was really meeting many of our goals rather than just one, which is creating more numbers. 

Having folks have access to stable housing really we think of as happening along a continuum. And there has been a lot of attention paid in this community to folks who are at the furthest end of this, who are unhoused and living on the street, and rightly so. We're all concerned about those folks, and I believe that we all have a duty to try and do something about that.

But then we have a whole group of people who are living in public housing developments, who are renting substandard housing, who are renting housing that's unstable because landlords might be selling properties. And so there's this whole section of our community and these people range in they could be CNAs, they could be People working in our hotels.

They could be service industry workers. They could be nurses, teachers. There's a whole group of really vulnerable people in our community who we have to be sure that we're investing in the construction of new affordable units so that those folks can have access to long term, stable housing.