All residents in Hillsborough — regardless of age, race or income — should have access to safe and attainable housing.  

Housing is a foundational element of an adequate standard of living, serving as a precondition for work, health, education and success. It is a key part of sustainability since the health and well-being of community members is dependent on having access to stable housing. 

The town must manage growth to provide a diverse supply of safe and affordable housing that serves the whole community. It must provide a range of housing types, sizes, designs and ownership structure to accommodate varying lifestyles and needs. 

For most programs, the definition of affordable housing restricts housing costs to no more than 30% of a household’s income. Income-restricted properties are usually based on a percentage of the area median income, as defined by the U.S. Department of Housing and Urban Development.

The Department of Housing and Urban Development defines households that earn less than:

• 80% of the area median income as low-income.
• 50% of the area median income as very low-income.
• 30% of the area median income as extremely low-income.

The Hillsborough Board of Commissioners has outlined guiding steps for town staff.

The town's current strategic plan includes two objectives and six initiatives related to affordable housing in the Economic Vitality focus area. 

Objective 4 

Preserve naturally occurring affordable housing.

• Actively participate in countywide housing plan effort.
• Develop local action plan.
• Financially support existing efforts to preserve affordable housing or support housing stability with locally identified funding.

Objective 5

Develop policies and invest in projects that contribute to meeting identified affordable housing needs in town.

• Establish an affordable housing reserve fund to support the creation of new affordable housing units.
• Support changes to town code and state law to provide new funding sources and reduce administrative barriers for affordable housing creation.
• Prioritize surplus of town-owned land for the creation of affordable housing and strategically acquire additional land or financial participation from new development for affordable housing.

The town's comprehensive sustainability plan dedicates a chapter to housing and affordability.

The plan states the goal for Hillsborough is to “develop and maintain a variety of safe, healthy, and sustainable housing options to increase housing stability for renters and homeowners.” The plan includes 7 strategies and 51 action items related to affordable housing:

• Plan for and monitor progress toward meeting housing needs in town. 
• Develop and adopt policies that contribute to meeting identified affordable housing needs.
• Invest in public projects that contribute toward meeting housing needs in town.
• Participate in partnerships and programs that provide security and stability for homeowners and renters.
• Participate in partnerships and programs that contribute to meeting identified future housing needs.
• Adopt development regulations that contribute to meeting identified affordable housing needs.
• Engage with community groups and individuals on topics and decisions that contribute to housing needs and affordability. 

In Fiscal Year 2024, the town began dedicating funding for affordable housing initiatives. The board established a goal of increasing funding to about $320,000 per year.

This dedicated funding includes a required local funding match for the federal HOME Investment Partnerships Program and the town’s participation in the Community Home Trust and Orange County Partnership to End Homelessness.
 
The chart below highlights the board's allocation to the affordable housing fund, its affordable housing commitments and the fund's reserve balance.

In addition to budgeted funds, the town has funded other activities that support affordable housing.

Emergency Housing Assistance

During the COVID-19 pandemic, the town received a total of $664,000 in federal funding to support emergency housing assistance. Additionally, the town has used $28,500 from fee-in-lieu-of funds from developers to support emergency housing assistance. Developers made these payment instead of building affordable housing units. The town uses those funds to create affordable housing.

Home Repair

The town's fiscal year 2026 budget includes funds for code enforcement and nuisance abatement to help prevent current affordable housing from falling into disrepair.

New Unit Generation 

The town has used fees in lieu of affordable housing units to create new affordable housing in Hillsborough:

• $85,000 — Odie Street 
• $125,000 — Crescent Magnolia

The town's current development incentives are being updated as a part of the larger unified development ordinance rewrite project.

Density Bonus 

The town allows an increase in density from a maximum of 25 units per acre to 40 units per acre if the development includes affordable units.

Reduced Parking Minimums

The town allows developers to reduce the required number of parking spaces to one space per bedroom if the development includes affordable units.

Accessory Dwelling Units

Accessory dwelling units are allowed in all residential zoning districts. The unit size is limited to the greater of 1,000 square feet or 50% of the principal dwelling unit. 

Central Pines Regional Council of Governments believes every individual in the region should have access to safe and affordable housing.

Its team collaborates with local governments, developers and nonprofits to preserve, improve and construct affordable, high-quality housing. Its goal is to work alongside communities at various stages of their housing efforts to meet the specific needs of the communities.

Several groups within Orange County provide work related to affordable housing. 

Orange County Affordable Housing Coalition

The Orange County Affordable Housing Coalition is an association of nonprofit housing developers, service providers, advocacy groups and local government partners working together to provide housing opportunities for all in Orange County. 

Working in coordination with Community Home Trust, the coalition has produced a land inventory and preliminary development analysis as a strategy to collectively increase access to affordable housing across Orange County. 

Orange County Home Preservation Coalition

The Orange County Home Preservation Coalition is a collaborative organization that coordinates the provision of home repairs and modifications for Orange County residents of low to moderate income. It maintains an online database that allows for communication regarding cases and facilitates referrals among the various partners. The coalition uses a unified assessment process  to provide comprehensive and efficient repairs to Orange County residents in need. 

Orange County Local Government Affordable Housing Collaborative

The Orange County Local Government Affordable Housing Collaborative was created to increase affordable housing collaboration among the local governments in Orange County. The collaborative is consists of elected officials and staff from Orange County and the towns of Carrboro, Chapel Hill and Hillsborough. This group also provides guidance on the administration of funds from the federal HOME Investment Partnerships Program.

Orange County Low Barrier Housing Working Group 

The Orange County Low Barrier Housing Working Group was formed in December 2024 to address the need for affordable, accessible housing that supports individuals with significant barriers to housing, such as those who are returning from incarceration, people impacted by criminal justice involvement, individuals who are unsheltered, and individuals facing behavioral health issues who need supportive services to maintain housing.

Members include staff from Orange County; the towns of Carrboro, Chapel Hill and Hillsborough; Alliance Health; and the Orange County Local Reentry Council.  

Orange County Partnership to End Homelessness

The Orange County Partnership to End Homelessness is a coalition of service providers, local governments and community members who work together to coordinate funding and bring best practices to the work of ending homelessness in Orange County.