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New zoning rules could boost range of affordable homes

Posted on March 18, 2010March 18, 2010 by Staff

BY KIRK ROSS
Staff Writer

CHAPEL HILL — The Chapel Hill Town Council opened a public hearing Monday night on changes to the town’s zoning rules that are designed to increase the types of affordable housing.

At its meeting at Town Hall, the council reviewed a proposed inclusionary-zoning ordinance aimed at expanding the range of housing stock and making more of it available to low- and moderate-income families.

For more than a decade, the council has required developers seeking zoning changes or special-use permits to make 15 percent of a project’s housing units affordable. The current system relies mainly on the Community Home Trust to manage the affordable units created under the town’s current system.

Critics of the system in place say it doesn’t produce enough multi-bedroom units and does not offer enough flexibility in accepting payments in lieu to cover the rising maintenance costs the trust faces as the affordable-housing stock grows.

Affordable housing has been a long-running concern in Chapel Hill as rising housing costs have pushed lower- and moderate-income families — including teachers, police and service and trade workers — farther from town.

In an overview of the new ordinance and the need for it, former town planning director Roger Waldon, a consultant to the town on the rules, emphasized the need for a more comprehensive way to achieve affordable-housing goals.

“A large category of the workforce here in Chapel Hill can’t afford to live here,” Waldon said, “and it has been a community goal to maintain a diverse community and to have people who work here be able to live in the community.”

Waldon pointed to a study conducted last year by Spencer Cowan of UNC’s Center for Urban and Regional Studies that looked at the housing needs for trade and service workers and others generated by new residential construction.

“The conclusion of that report and many others is that the market is not providing housing for the full range of people who work in Chapel Hill and would like to live here,” Walden said.

The new rules, he said, would be more thoroughly spelled out for developers and give them more incentive to build to a greater density if more affordable units are included. That would allow them to recoup some of the costs of adding affordable units.

“Developers are able to get some significant density bonuses to help offset those costs,” Waldon said.

Although many states use similar rules, only two jurisdictions in North Carolina, Davidson and Manteo, have inclusionary zoning. In Chapel Hill, it is not a new concept. The council formed an Inclusionary Zoning Task Force, led by council member Sally Greene, in September 2005.

One significant change in the new rules would be to provide units that are affordable to people making 65 percent of the median income of Chapel Hill. The current system sets the affordability threshold at 80 percent of the median income, which this year is $57,050 for a family of four.

Greene and others have argued that in order to include the types of households the town wants to assist, the threshold has to be lowered.

At Monday’s meeting, Greene said one problem left to be solved is how to guarantee that the lower-priced units don’t end up as one-bedroom units, as they often do now.

Council member Jim Ward said he also wanted to see the types of units expanded, saying too many units are smaller, one-bedroom ones. The council, he said, needs greater flexibility.

“Maybe it should be 15 percent of bedrooms,” Ward said, “or 15 percent of bathrooms or 15 percent of value. Fifteen percent of units is not getting us where we need to go.”

Ward said he was in general support of the plan, but wanted to make sure the units would be kept affordable in the long run.

Greene said that the town likely would have to do more oversight of the units to make sure that deed restrictions on pricing would be adhered to with each sale.

The new rules also try to maintain affordability over time through design, such as providing for wider doorways and other features that would allow people to retain their homes longer.

Richard Duncan of NC State’s Center for Universal Design, who encouraged the task force to look at design issues, said lower-income earners can have trouble staying in the same home because of the cost of upfitting it as it grows older.

The council is expected to take up the ordinance again as early as next month and will continue to take public comment on the plan, which is on the town’s website at townofchapelhill.org/index.aspx?page=1298

In other action Monday night, the council reviewed a special-use permit for Murray Hill, a 15-unit development on a 1-acre lot on Meadowmont Lane near the Meadowmont Wellness Center. The development includes two affordable-housing units and a $21,250 payment in lieu.

The council also reviewed a concept plan by the university foundation for a 90,000-square-foot expansion of the Kenan-Flagler School of Business Rizzo Conference Center on Dubose Lane at Meadowmont. The expansion would add space for the school’s executive-development, continuing-education program, along with 80 additional guest rooms and 168 parking places.

1 thought on “New zoning rules could boost range of affordable homes”

  1. Elliot Baron says:
    March 24, 2010 at 10:22 am

    “Affordable Housing” is a buzzword that conjures an image that is hard to oppose, but scratch below the surface and a myriad of problems reveal themselves.

    Real estate values are set by what people are willing to pay. People pay a premium to live in Chapel Hill because it has many desirable attributes. These include a school system with the highest spending per student of any district in the state, a sense of space and openness not found in more urban environments, the proximity of a flagship public university, many cultural offerings, and less than stultifying traffic jams. All of this comes at a price, housing costs are high and so are tax rates.

    There are two distinct limits which need to be considered before suggesting a solution to build our way out of an affordable housing deficit. First, what is the carrying capacity of Chapel Hill? Specifically, the optimum population which can be serviced with reasonable services and amenities. This is more than an ecological calculation Surpassing this number degrades the experience for everyone. The second limit is the level of taxation that the local population will support.

    Residents of affordable housing demand services at roughly equal rates to residents of market rate housing. Below market valuation assures that the taxes generated by affordable units are insufficient to cover the tax burden that they create. Obviously, smaller affordable units generate lower revenue expenditures because they create less demand. Public education drives the tax train. Building new schools and educating more students has done more to increase taxes in Chapel Hill than any other factor. Since we do not have excess capacity in our school system, every new child in the district brings a $60,000 infrastructure burden just for the cost of providing a desk and building. Add to that the annual cost of providing an education from K-12 and you have another $120,000 in today’s dollars.

    Requiring developers to provide larger affordable units for families might sound well-intentioned, but a new family of five with three school age children will add over $500,000 in public expense which must overwhelmingly be carried by existing taxpayers, because the family creating the impact will be paying virually nothing. Multiply that by 100 and you are now talking about real money. Of course, increasing population carries additional diminishment to the quality of life. This is not an elitist argument, it involves more traffic congestion, longer waits, lower air quality, more frequent water restrictions, higher density and intensity. In essence a loss of the “sense of place” that makes Chapel Hill what it is, through urbanization.

    One way to make housing more affordable is to make a place less desirable. This will happen when local residents can no longer afford to pay escalating taxes and our school district is forced to lower standards. Many residents will have already been forced to leave, because even if they own their own home, they can’t afford to continue living in it. It will become less desirable when the unique set of factors that made Chapel Hill a town have been lost and others begin leaving for greener pastures. Finally, prices will definitely begin to drop when the supply of housing outweighs the demand and the market refuses to pay the going rate for the diminished, overpriced services.

    Faced with declining values, local government will be forced to choose between further increasing taxes or cutting services. Both options will exacerbate the decline. But that’s just my opinion!

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