If we build it …

Which came first — residents with a plethora of discretionary income? Or craft breweries, tapas bars and the availability of Starbucks’ White Chocolate Mocha Frappuccino on every street corner?

If we build it, they will come, goes the adage. Last Friday morning at the town’s Economic Sustainability Committee meeting, Alisa Duffey Rogers, project manager of the Future Land Use Map and the rewrite of the Land Use Management Ordinance, presented photos of her vision for downtown — clusters of tall apartment buildings wrapped around parking decks with ritzy retail shops at the base, made to order for those with plenty of disposable income perched in town temporarily.

Certainly, developers will rush to build such high-profit luxury living spaces. And certainly, we need residents with considerable discretionary income to support businesses in town. But those businesses and our main employers can’t run without employees — people to cook, serve and clean in restaurants; municipal employees; junior professors, support staff and groundskeepers on campus; nurses, technicians, and laundry and food service workers at the hospitals.

As towns around us grow, modestly paid workers will have employment options that don’t require commuting to Chapel Hill. We need to build homes for “the missing middle,” those in the 80% to 120% Area Median Income.

To that end, economic development officer Dwight Bassett proposed that the town buy the Lakeview mobile home park land for $5 million and redevelop it.

The town has no money to redevelop the land anytime soon, given commitments we’ve already made, such as a new municipal services center, but town ownership of the land would remove pressure on Lakeview residents to relocate in the near future.

Nevertheless, a consultant presented various redevelopment options to create — repeat the refrain — a vibrant, walkable community. He panned the barracks-style housing of multifamily units and townhouses lined up cheek-by-jowl in straight rows, edged by barely a fringe of grass. He claimed that development did not have to be dense, and showed a drawing of two-story apartment buildings.

His pitch and pictures seemed very much like what we had envisioned for the town-owned land at 2200 Homestead Road that Town Council designated as a combination of market-rate units sufficient to subsidize an equal number of affordable units. But when we turned it over to staff, we got back barracks-style units, block-y apartment buildings and a communal living building with no target tenant. And the cluster of tiny homes had been erased. A majority on council shrugged it off.

What makes us think the Lakeview project would have a different outcome? And what makes us think that a low-density development would be financially feasible for the town when professional developers say only high-density makes the numbers work?

The consultant flashed figures of wealth levels of town residents, indicating that two-thirds of Chapel Hill’s population is considered high-wealth (he did not define the term). He did not stratify the pay levels of the jobs in Chapel Hill. Yet that’s what we need to focus on. To ensure a stable, well-functioning town, we need to build for the people who work here.

— Nancy Oates

Wealth gap

I say this every year at budget time. Call it my annual screed: A flat percentage salary increase across the whole pay scale widens the wealth gap. The rich get richer, and the poor end up with comparatively less buying power.

This year, the town’s 3% across-the-board pay raise will put an extra $900 (before taxes are withheld) in the pocket of an employee making $30,000 a year. Employees making $200,000 receive an extra $6,000. Because of the state and federal tax cuts — that in reverse Robin Hood style take from the poor and give to the rich — employees on the high end of the pay scale get to keep more of their raises.

I have in the past, and again this year, suggested that employees making the equivalent of the Area Median Income (about $80,000 right now) or some other reasonable cut-off point (maybe everyone earning less than six figures) receive a 3% raise, while those making above that amount get a 2% raise. Or perhaps take a fiscal “leap year” periodically in which everyone receives the same $1,000 pay raise to hit “pause” on the widening wealth gap.

Every year, council votes it down.

Council members who support applying a flat percentage pay raise across the spectrum argue that highly paid employees would feel dissed if they received a lower percent or the same amount as their lower-paid co-workers. The highly paid employees might start looking for jobs elsewhere, those council members say.

Maybe. But people who are drawn to government work (and nonprofits — I say this as a former nonprofit and government worker) generally are motivated more by the ability to make a difference in someone’s quality of life than they are by getting rich. If they left for a municipality that paid more, it would be to a bigger town with more bureaucracy and less personal working conditions. And if someone is working only for the money, he or she may not go the extra mile that someone who believes in the value of the work occasionally will.

Unlike in the private sector, no one in municipal government generates revenue. Every pay raise comes at the expense of taxpayers, who are the only revenue source government organizations have.

From an economic vantage point, those on the lower end of the pay scale are more likely to spend their raises and stimulate the economy. Those on the higher end will be more likely to stash the extra income in an ever-growing brokerage account, benefiting further from decisions made by businesses to increase shareholder returns, which often involve keeping wages low and hiring the fewest number of employees to run the organization.

As taxpayers, we are investing in our employees to run a healthy organization. We need to invest in all of our employees, not just the ones at the top.

— Nancy Oates

Rogers Road victory

The historically black Rogers Road neighborhood crossed the finish line this past week on quality-of-life improvements years in the making. Town Council approved rezoning that would protect the neighborhood from the over-development expected once the sewer line extends into the area.

The neighborhood, north of Homestead Road and east of Rogers Road, sits just south of the Orange County landfill, which has tainted some wells in an area that had no access to public water and sewer since the community’s inception in the 1700s.

The homes are in one of the town’s Extraterritorial Jurisdictions (ETJ), which means the property owners are governed by Chapel Hill’s land development regulations but can’t vote in town elections. They pay only county and school district taxes, not town taxes, and their children may attend Chapel Hill-Carrboro public schools.

In 2011, OWASA extended water service to the neighborhood. The sewer line will be completed any day now. Without public utilities, the neighborhood was able to retain its rural character. Recognizing that developers would take interest once the area had access to water and sewer, the residents of the Rogers Road community conducted a nine-month planning effort to shape growth in the coming years. The Mapping Our Community’s Future report came out in May 2016.

To give teeth to the report, Chapel Hill planners proposed formally rezoning the area. The town hired a consultant and held numerous community meetings over the past couple of years. Rogers Road residents remained adamant that their vision detailed in Mapping Our Community’s Future be respected.

Town staff presented a proposed rezoning at our April 22 council meeting that hewed fairly closely to the mapping report. Public comment at the meeting underscored the desire to hold to the mapping report, to remove proposed roads that ran through private property and to limit the rezoning to only the historically black neighborhood.

When town staff came back to council with the plan last Wednesday, clearly they had listened to the feedback from property owners. (This is rarer than you’d think.)

The night before our council meeting, the chair of the Orange County commissioners emailed a request to council members to delay voting on the rezoning until the commissioners had formally weighed in. However, delaying the vote would have left Rogers Road property owners vulnerable to developers taking advantage of access to the newly completed public utilities and proposing development that did not fit with the neighbors’ vision. As county staff had been involved in the rezoning process from the start and briefing commissioners along the way, council members and town staff so no need to subject the Rogers Road property owners to unnecessary risk.

The rezoning allows home-based businesses; triplexes, as long as they are affordable to people of modest means, and some duplexes that make room for growth. The quality of life has improved, and the character has been preserved.

— Nancy Oates

The cost of appearances

There we go again. Dipping into our savings to pay for nonessentials. Living beyond our means.

Our new town manager presented his recommended budget, a 3.7% increase over what we spent the prior year, which would require only a 1.6-cent property tax increase (per every $100 of property valuation).

The hiring process for our town manager included a budget exercise, which Maurice Jones knocked out of the park. When he tackled the real thing this spring, he came through again.

His budget corrected some areas we had long neglected — such as money to boost the starting salary of police officers in an increasingly competitive field, and funds to repave local streets where we’ve Band-Aided potholes for years.

It reflected a stroke of genius in making use of some money that had been shackled for the past few years. In 2015, the General Assembly decreed that all inspections fees a town collects must be used for inspections purposes only, not thrown into the general revenue pot, as we’ve done for years. Chapel Hill collects way more in fees than the department budget. Our new town manager found five people in the Planning Department who served inspections work and transferred those positions to the Inspections Department. Just like that, hundreds of thousands of dollars were freed up to use.

The budget left out only requested increases of four nonprofits, totaling about $72,000. When Town Council asked Jones to include those, he found $10,000 tucked away that could be applied to the requested increases, and said the remaining $62,000 would have to be taken from our savings. Tapping into our savings — living beyond our means — can negatively impact our bond rating, which determines the interest rate we are charged when we borrow for big-ticket items, such as a new police station. After some discussion, council agreed to pull the money from savings.

We were ready to wrap up when a council member proposed pulling another $50,000 from savings to be used for cultural arts. The manager’s budget hadn’t included an increase in spending for cultural arts, and what did that say about our town, the council member asked. The mayor directed the manager to explore tacking on another $50,000, and now we are living $110,000 beyond our means.

We do not live in a cultural desert. We need only cross Franklin Street to access Playmakers Theater, Current Artspace, Memorial Hall, Hanes Art Center and the Ackland Museum. We can drive 20 minutes to Durham for DPAC, Carolina Theatre and the Nasher art museum. We can drive 30 minutes to the many cultural arts venues in Raleigh. The council member had no specific use for the money, only “is that the message we want to send?”

By focusing on appearances, we are creating a town only for the wealthy. If we are intent on pulling another $50,000 from savings, let’s designate it to be used on events that will be free to the public.

— Nancy Oates

 

The New Historic District

As the Town Council’s liaison to the Historic District Commission since the 2015 election, I’ve had a front-row seat to many redevelopment proposals by people who have no clue what value historic neighborhoods add to our community. The presentations follow a form so uniform that it appears to be an Internet download.

The presentations apparently never vary from city to city. In this week’s New Yorker, Jeremiah Budin spoofs those presentations in a piece that would be so much funnier if it weren’t so true.

Budin clearly has sat through numerous applications to demolish history and replace it with something shiny and new. He knows all the lingo, from the “mixed-use” towers to the offer of maybe planting a tree, unless it gets in the way, to the claim of historic patina because the brand-new complex is near something old.

At last Wednesday’s Town Council meeting, a couple dozen historic district homeowners petitioned us to impose a moratorium on allowing rooming houses in an R-3 zoning area. A swath in one of our historic districts is zoned R-3, and developers have been going door-to-door, offering above-market-value for houses in hopes of amassing a block of properties that they can combine, tear down the historic homes and build to a higher density.

We accepted the petition, though one person on the dais brushed aside the urgency, saying staff will study the issue, along with what to do about short-term rentals, such as AirBnB, an issue so complex that the historic homes in the R-3 section will be razed by the time we it sort out.

The homeowners’ anxiety stems from their understanding that once a historic property and century-plus old trees come down, the tie that connects us to a community across generations is irreparably severed. State law does not allow the Historic District Commission to prevent a historic structure from demolition. Although the HDC ostensibly has the authority to approve what is built on the cleared site, the right lawyer can appeal to the Board of Adjustment, which routinely reverses the decisions of other boards.

What we lose with every demolition is a page of our history. We are left with a type of dementia that erases our long-term memory and consigns us to live only in the present.

Enjoy the spoof, but take its message to heart. The destruction of historic properties is no joke.

— Nancy Oates

Women helping women

I go to a lot of meetings, and some of them are productive. Some lay the groundwork for future success. Others are simply vehicles for egos to preen.

To offset the waste of time of the latter, I occasionally volunteer with Habitat for Humanity. It is satisfying to see what can be accomplished by a group of people in four hours.

This past weekend, as part of Habitat’s Women Build program, I helped shingle a roof in Crescent Magnolia, the 55+ community Habitat is building in the Waterstone subdivision just south of Hillsborough. Of the 24 one-bedroom, one-story townhomes for people of modest means, 18 will be purchased by single women.

The gender imbalance can’t be attributed to the actuarial tables that show women tend to outlive men. That doesn’t show up until people reach their 80s.

The over-representation of women in lower socioeconomic groups is due to the cumulative effect of the different opportunities and responsibilities men and women have in American society.

Women historically are paid less than men for the same or similar work. When I entered the workforce after college, women made 59 cents for every dollar men made. A generation later, when my daughter entered the workforce, women made 89 cents for every dollar their male counterparts made. Moving in the right direction, but the pay gap will result in a stark difference in wealth over the course of a career.

Women traditionally have had limited career opportunities. Oftentimes companies shunt women to lower paying positions. Women tend to predominate in lower-paying fields. Many nonprofits are run and staffed by women, whereas hedge fund operators and real estate developers are usually men. In the decade I’ve been paying attention to things that come before Town Council, only one woman has proposed a development project, and council turned her down, the only time I can recall council denying a development application.

Many women have childcare responsibilities that they sometimes address by taking time off from their careers (and the full-time pay and benefits) or piece together part-time jobs to have the flexibility needed for family responsibilities. Even today, when both parents work full time, the mother tends to be the one who takes time off from work when the kids are sick or a parent is needed at school or the babysitter cancels. That can negatively affect promotions and raises. When women return to work after taking time off to raise children, they often start at a lower position than the one they left.

All of this adds up to a lower Social Security payment and a smaller retirement account. In retirement, women often are priced out of market rate housing sooner than men.

Habitat sells its homes (as opposed to renting), so low-income buyers can accrue equity. The majority female crews this past week building houses so the majority female homeowners can build wealth made the work all the more meaningful.

— Nancy Oates

Cost of combating climate change

Town Council gets it: Climate change is real.

At our April 17 meeting, we reviewed a draft action plan for reducing our carbon footprint. The plan called for requiring solar panels on 80% of the rooftop area on all development proposals that needed a rezoning to proceed. State law prohibits municipalities from requiring new construction to be solar or electric vehicle ready, just as it prohibits any sort of cap on rents, thus knee-capping our authority to require affordable housing. However, a developer can voluntarily provide such community benefits when requesting a rezoning.

More than a decade ago, in 2007, council adopted a requirement that all developers of new construction must submit a plan that endeavors to make their project 20% more energy efficient than standards set by the American Society of Heating, Refrigeration & Air Conditioning Engineers. Presumably, that is being done, implemented and enforced.

The idea for adding rooftop solar panels came from a petition by the town’s Environmental Stewardship Advisory Board. Solar panels are relatively more affordable than those installed in the early 1990s, when the technology began appearing in regular homes. When we bought a house in Chapel Hill 23 years ago, we had a very difficult time finding anyone to repair the solar panels on our house, and when we did locate someone to do the work, it was prohibitively expensive.

A developer recently cited the $250,000 cost as the reason he balked at installing solar panels on a proposed apartment complex at 2217 Homestead Road. He offered some affordable housing units instead (providing that the town waive $83,000 in permit fees). A majority of council approved his offer.

This underscores my concern that in our enthusiasm to embrace greater energy efficiency, we pit affordable housing against reducing our carbon footprint. Developers might agree to one or the other, but not both.

In 2017, council adopted a resolution delineating 10 ways the town could reduce greenhouse gas emissions, conserve energy and boost transit ridership. But we haven’t made any noticeable progress since.

If we want developers to contribute to both affordable housing and energy efficiency, we must take a leadership role by coming up with a plan for installing solar panels on every town building that has sufficient sunshine to make solar panels worth the investment. We need to figure out how to pay for it, include that amount in the town budget and draw up a time frame for when each installation will be completed.

Climate change is real. We must get equally real in our efforts to combat it.
— Nancy Oates

Our tenuous link to history

I haven’t been inside the Cathedral of Notre Dame since I went sightseeing after running the Paris Marathon some 30 years ago. Yet when I heard about the fire that destroyed the ceiling and spire of the 800-year-old church, it felt like a personal loss.

In his book Why Old Places Matter, Tom May, the general counsel of the National Trust, wrote: “Old places are a part of us. They form our identity and hold our memories. They define our collective sense of nationhood. … [T]hey foster an expansive sense of our own shared humanity.”

Old buildings withstand time; regardless of what’s going on politically, culturally or with the economy, buildings remain reliably unchanged.

We don’t have any structure in Chapel Hill that is 800 years old, and even if we did, state law allows anyone to buy it and tear it down a year later. Which is why the Historic District Commissioners had such a difficult decision to make at their April 9 meeting.

Many in Chapel Hill remember the modest Sears cottage on Gimghoul Road belonging to twin sisters Barbara Stiles and Bernice Wade, who each lived more than a century. They turned their front, back and side yards into lush gardens, which they shared with the public by placing a sign out front, “The garden is open,” inviting anyone and everyone to wander their gardens and revel in nature’s beauty and bounty.

After Wade died last year (Stiles died two years earlier), the house was sold, and the new owner proposed a two-story addition that appears to more than double the size of the original cottage. The new owner said she would preserve as much of the gardens as she could, but that if the HDC denied her application, she would sell the house, because the cottage as is did not meet her needs.

That put the HDC in a moral pickle. The Historic District Guidelines require that any renovation or addition maintain the existing character of the house, and this proposed addition appeared to violate that stricture. Yet if the house were sold again, a new owner could apply for a demolition permit, and if the HDC denied the permit, state law allows the owner to simply wait 365 days and proceed with the demolition.

The HDC would have to approve any new house built, but if the HDC denied a certificate of appropriateness, the owner could lawyer up and appeal the decision before the town’s Board of Adjustment, which routinely reverses decisions by other advisory boards.

So: approve an addition that does not adhere to the guidelines? Or risk the historic home being torn down and replaced by a brand-new McMansion?

One commissioner wondered why someone would buy a historic cottage who did not embrace cottage living? After all, someone who wants to live in Paris would not buy an apartment there expecting to replace it with a house that had a home theater and an outdoor kitchen.

Ultimately, the HDC approved the addition, hoping to preserve a sliver of that which connects us to our identity and shared humanity. Let’s hope the rebuild of the Notre Dame dome doesn’t include an accessory apartment and attached garage.

— Nancy Oates

 

Sanctuary city

A couple of years ago, after Donald Trump had taken office and begun threatening punishments to sanctuary cities, a member of the Justice in Action Committee proposed that Chapel Hill take a stand and declare itself a sanctuary city. After all, the committee member pointed out, we behave like one.

My response at the time was that we stay under the radar. By not making an in-your-face declaration, we could reap the benefits of having immigrants in our community without putting their well-being and peace-of-mind at risk.

But now Trump has changed his rant. He wants to send undocumented workers to sanctuary cities, thinking it would be a burden on those municipalities not signing on to 287(g), a federal regulation that allows local law enforcement officers to act as Immigration and Customs Enforcement agents. With 287(g), local deputies and police can turn over fingerprint records to ICE and hold in jail anyone suspected of being in the U.S. without proper immigration documents.

Our economy benefits greatly from the presence of undocumented workers, so much so that it leaves me feeling ashamed. Because of their tenuous legal status, they are vulnerable to being taken advantage of and can’t demand the higher wages that U.S. citizens are paid. (And by “higher,” I mean $10-$15 an hour, as opposed to less than the minimum wage of $7.25 per hour.) Companies and individual households find a real bargain in immigrants who work hard for less money.

Immigrants build our houses and clean them, and take care of our yards and children. They work the fields, harvest our produce and process the meat we eat.

We reap the cultural benefits immigrants bring to our town through exposure to new languages, customs and food.

So, yes. Now might be the time to declare ourselves a sanctuary city. The federal government would provide transportation to those willing to resettle in Chapel Hill. Our affordable housing boards could kick it into high gear. We already have dual-language programs in our public schools to help youngsters function well in an unfamiliar society.

Declaring ourselves a sanctuary city would put our “Chapel Hill values” to the test, and I’m betting on us coming through.

— Nancy Oates

Whose opportunity?

Trump has come to Chapel Hill.

The federal Tax Cuts & Jobs Act, signed into law in December 2017, created an investment vehicle to allow the very wealthy to avoid paying taxes. The idea was presented to the public as a way to attract new development to high-poverty areas. A thousand such areas were identified in North Carolina, and 252 of them were certified as “opportunity zones.” The zones were chosen through “direct outreach and close collaboration with local officials,” according to the N.C. Department of Commerce website: https://public.nccommerce.com/oz/#section-overview.

Chapel Hill had two qualifying “high-poverty” areas. One was the residential area south of West Franklin Street. The one chosen was the residential area encircled by East Franklin Street to Estes Drive and Martin Luther King Jr. Boulevard. That area encompasses the Franklin-Rosemary Historic District, which has some of the most expensive houses in town; the 100 block of East Franklin Street, which defines Chapel Hill’s downtown charm; and the town’s largest middle-class neighborhood, walkable to schools, the library, medical care and a grocery store. Commercial areas along the perimeter include the iconic Sunrise Biscuits, the Y and one of the few urgent care clinics in town.

Where is the poverty in all of that? The students in The Lark (formerly The Lux) who come from wealthy families and don’t have to work their way through college.

The new owners of 137 E. Franklin St. will be able to use this investment vehicle in redeveloping the former NCNB building, drawing in money from the ultra wealthy who want to avoid paying taxes on the profits they’ve made from other investments.

Given the track record of other federal investment vehicles to aid the very rich, I don’t see much benefit for Chapel Hill.

Remember securitization? Investors bundled together high- and low-performing mortgages and sold shares of the bundles like stocks that pay dividends. In short order, banks realized they could make money from the upfront points charged in a loan, then dump the risk into a securitized bundle. Banks took on ever more risky loans, colluding with bond-ratings agencies to keep quiet about the risk. Eventually, the entire Ponzi scheme collapsed, and the only ones who made money — and lots of it — were the initial investors. Taxpayers were left to clean up the mess of The Great Recession of 2008.

The unintended consequences of this “opportunity zone” are showing up already. Investors are buying up homes in the historic district to amass large parcels, then tear down the historic homes and build multifamily rentals instead. I expect resale values of homes near Estes Hills Elementary and Phillips Middle schools to dip, given the town’s tacit agreement that this area is blighted and ripe for rezoning into commercial and multifamily development.

I’m well aware that we, as a town, have been living above our means for some time, and that a “market correction” is in order in the form of a tax hike. But we don’t need to pile on by agreeing to a scheme that brings increased tax revenue from one or two commercial products at the expense of the quality of life of homeowners.

– Nancy Oates