ASHEVILLE, N.C. (828newsNOW) — Asheville city leaders are weighing a difficult question as recovery from Tropical Storm Helene continues: Should limited recovery dollars go toward rebuilding damaged homes or constructing new affordable housing?

That debate took center stage during a City Council agenda briefing Thursday, where council members wrestled with how to balance urgent home repair needs against long-term affordable housing shortages across the city.

Staff presented a proposal to shift $19.2 million in federal disaster recovery funds into the state’s Renew NC home repair and reconstruction program, including $10 million currently allocated for infrastructure work and $9.2 million from the city’s affordable multifamily housing construction program.

The move would increase Asheville’s single-family housing recovery allocation to $22.2 million, enough to help an estimated 55 to 65 households, according to city staff.

But several council members questioned whether the city is putting too much emphasis on large apartment developments while longtime residents remain displaced from storm-damaged homes.

“We’re in a scarcity moment,” Council Member Kim Roney said during the discussion. “The $225 million sounds like a lot, but it’s not $1.1 billion.”

Limited funds, growing needs

City staff said Asheville’s overall unmet recovery need far exceeds available funding. An updated assessment estimates roughly $222 million in housing-related needs alone following Helene.

The state’s Renew NC program received 285 applications from Asheville households, though only 124 have so far been deemed eligible. Of those, 87 fall into the highest-priority category based on income and vulnerability factors such as age, disability or children in the home.

Officials said the current allocation would only fully fund a small portion of applicants.

The debate exposed broader disagreements over how Asheville should approach recovery.

Some council members argued preserving homeownership and generational wealth should take priority.

“If I was being asked to spend $30 million to build a few hundred privately owned affordable apartments versus $30 million to fix every home, the answer’s really easy for me,” Council Member Sage Turner said.

Others stressed that deeply affordable rental housing remains critical for residents displaced by the storm and Asheville’s broader housing crisis.

City staff described their proposal as a “balanced approach” that would continue funding affordable apartment projects while expanding homeowner repair programs.

Under the proposal, the city would still move forward with nearly $18.8 million for affordable multifamily housing developments while increasing home repair funding.

Officials said the multifamily housing applications generated significant demand. Twelve applications sought a combined $70 million in funding and proposed more than 1,400 housing units across Asheville.

Concerns over water infrastructure funding

At the same time, some council members voiced concern about taking money away from water infrastructure projects tied to the city’s North Fork Reservoir system.

Staff said the proposed $10 million transfer would come from project design costs that they expect could eventually be reimbursed through FEMA hazard mitigation funding.

Roney questioned whether reducing infrastructure funding sends the wrong signal after Helene exposed vulnerabilities in Asheville’s water system.

“I don’t think anybody on this call would disagree with me that having our water system secure and reliable is a public health issue,” she said.

City staff said they identified the infrastructure funding as the lowest-risk source for reallocation because the design costs are likely eligible for future reimbursement.

Federal rules increase rebuilding costs

The discussion also highlighted sharp differences between the federal disaster recovery program and local home repair efforts already underway.

Earlier in the recovery, Asheville allocated roughly $1.4 million in local bond funding to the Asheville Regional Coalition for Home Repair, known as ARCHER, which officials said has already helped repair more than 60 homes.

Unlike federal HUD-funded programs, those local dollars are not required to bring homes fully up to modern code standards.

Under federal rules tied to Renew NC funding, homes must be repaired to “decent, safe and sanitary” standards, often requiring full reconstruction if damage and code issues exceed certain thresholds.

That can include addressing lead paint, asbestos, code deficiencies and mitigation work beyond the original storm damage.

City officials said reconstruction projects under the state program can cost up to $450,000 per household.

Council members also questioned whether more recovery work could be directed to local contractors instead of out-of-state firms involved in the state-managed program.

No formal vote was taken Thursday, but the proposed funding changes are expected to move through a public comment and hearing process over the next several weeks before returning to council for approval in June.

Meanwhile, council is expected to vote Tuesday on nearly $18 million in affordable housing awards tied to three proposed multifamily developments in Asheville.