Putting out

At last week’s Town Council meeting, a council member likened Chapel Hill giving Wegmans Nancy Oatesan incentive to locate here as “being the first girl to put out.”

Many in the community seem to agree. I see it as a risk-free way to show companies that Chapel Hill is serious about being open for business.

One community member expressed concern that Wegmans was expanding too fast and, like Southern Season, was at risk for bankruptcy. But the way the incentive is structured, we pay nothing until we receive the tax revenue from Wegmans first. If Wegmans goes under, it is left with an empty building to sell, one that would hold more appeal to a light manufacturer or wet lab than to a luxury apartment developer. We have essentially secured that parcel as a revenue producer.

Others rued what we could do with the $2 million we’ve agreed to grant back to the county. The reality is we’re competing against Durham, which has more and cheaper land. Our few remaining parcels are being snapped up by luxury apartment builders who can pay high prices because of the high profit they make.

Still others worried that Wegmans would hurt longtime businesses like Harris Teeter and Whole Foods. Both grocery chains are adept at dealing with market competition and have thrived. And if Wegmans opens in Durham, we’ll lose Chapel Hill shoppers across the county line. Rest assured, I’m not tossing out my VIC card.

Granted, our negotiations showed our inexperience. We didn’t know going into the negotiations whether Wegmans typically receives incentives. The grocer’s reps said they are turned down more often than not, but incentives aren’t unprecedented in areas that have some challenges, as the need for soil remediation on the Performance Auto site presents. I don’t know, though I hope the negotiators did, whether Performance factored that expense into its asking price.

Wegmans claimed to be looking at sites in Durham. I hope that those negotiating on taxpayers’ behalf checked with Durham’s economic development officer to verify that. We also didn’t know going into the negotiations that 30% of the jobs Wegmans will bring to the area pay minimum wage.

The council’s Community Prosperity Committee (join us at the library at 8 a.m. the first Friday of each month) has pledged to come up with benchmarks for what could trigger the council considering an incentive in the future.

In recent years council has gained a reputation as a pushover among developers of luxury apartment buildings, which produce little net revenue. Clearly, we need to change that perception, but not at any cost. From the Wegmans offer, we learned the questions to ask, and the next time a business asks for an incentive, we’ll have a template in place that spells out what the town expects to get in return.

I believe the benefit taxpayers will see from Wegmans will outweigh the incentive we’ve agreed to grant back. And council has learned valuable lessons from the experience.
— Nancy Oates

Playing it safe

It was a dark and stormy night for affordable housing last Monday. At the Oct. 10 TownNancy Oates Council meeting, we had two opportunities to take meaningful steps to increase the supply of affordable housing, and a majority on council squandered them both.

Early on in the meeting, a council member put forth a resolution urging voters to vote in favor of two county bonds on the Nov. 8 ballot: $120 million for school repairs and $5 million for affordable housing. As I wrote last week, the county has no plan on how to use its affordable housing money, leaving it vulnerable to being dribbled away on stopgap measures. I asked that the resolution be amended to add urging county commissioners to come up with a plan. I got no takers.

To add to that discouraging response, Orange County commissioner Penny Rich emailed council members a copy of the county’s policy paper on affordable housing the next day, claiming that was the county’s plan. Nowhere among the report’s 239 pages was a plan to spend the bond money. To know that one of the people involved in deciding what to do with so much money doesn’t understand the difference between a policy paper and a spending plan was all the more disheartening.

Politicians drag the big-eyed puppy of affordable housing into photos to make themselves look good. And admittedly, with reporters and tweeters in the audience, it would be politically risky to appear at all critical of the bond. But if we had pushed for a plan, it could have been affordable housing’s Colin Kaepernick moment, focusing a spotlight on long-ignored problems by refusing to go along with tradition, and maybe being an impetus for change.

Instead, council played it safe, 7-1 in favor of no plan.

We ended the night with Carraway Village developer Northwood Ravin bringing us a tepid proposal for affordable housing, and we made it worse. Northwood Ravin offered to build 50 units of affordable housing amidst its luxury apartment and commercial destination complex, providing it could get tax credits or other outside funding within four years. If it hadn’t built the housing by the end of 10 years, the town could buy an acre of land for $1 and build it ourselves.

But by negotiating from the dais — we lose every time we do — we gave the developer nine years to find funding and obtain a building permit. If those conditions are met, the town has no contractual leverage to buy the land at year 10, even if no units have been built. And we set no time limit for when the apartments had to be ready for tenants.

Meanwhile, luxury apartments spring up around town like so many wild onions. And council members shrug, shifting the affordable housing crisis to someone else.
— Nancy Oates

A bond without a plan

When it comes to taking on the challenge of increasing the amount of affordable housing,Nancy Oates Orange County commissioners would do well to heed the wise counsel of Yogi Berra: “When you don’t know where you’re going, you’ll end up someplace else.”

County commissioners proposed two bond referenda for the November election: $120 million to repair aging schools and $5 million for affordable housing. The school boards of Orange County Schools and Chapel Hill-Carrboro City Schools have figured out already how to split up the money between them, should voters approve the bond, and they know exactly how they’ll spend it.

But commissioners have no plan for how to spend the affordable housing allocation.

This should come as no surprise to Chapel Hill voters. In 2014, Town Council agreed to set aside one cent of its property tax rate (which is about $1.68 per $100 of property valuation for most homeowners in town, not counting fees) to be used to increase the supply of affordable housing. That Penny for Housing program generates about $700,000 per year. But the town has no plan for how to spend it.

Not that the money sits unused. Last year, the town committed $200,000 to Self-Help Credit Union as an investment management fee for the $3 million UNC agreed to loan interest-free for 10 years to reclaim homes in Northside. The town gave the remaining $500,000 to DHIC to shore up its financials so it could attract grants more easily. DHIC plans to build nearly 149 affordable apartments on unused cemetery land the town donated.

I support both of those projects. I have full confidence they will benefit families and senior citizens living on limited incomes. That may very well have been the best use of taxpayers’ $700,000 investment. My quibble is that the town has never put forth a plan for affordable housing, and that lack of planning may be why we struggle to increase our supply of affordable units.

During my trip to Boulder, Colo., last month, organized by the Chapel Hill-Carrboro Chamber of Commerce, I visited a mixed-income community built on land purchased by the town. Through a public-private partnership and with the aid of several nonprofits, the Holiday neighborhood provides a sustainable mix of market-rate and affordable units. But it took planning by the town to make it happen.

It’s never too late to start planning. With thought and strategy and partnerships, $5 million could go a long way toward boosting our supply of housing for the modestly paid. But first we need a plan. Please urge Orange County commissioners to develop a plan for putting that bond money to its highest and best use.
— Nancy Oates

Lessons from Boulder

If the Chapel Hill-Carrboro Chamber of Commerce aimed to scare travelers on its 2016 Nancy OatesInter-City Visit into thinking that height restrictions and no-build buffers would make real estate prices skyrocket, someone forgot to clue in the Boulder speakers.

The chamber organized a trip for about 80 of us from Orange County – elected officials, business owners, developers and UNC brass – to spend a few days in the university town of Boulder to gather ideas that might translate well to Chapel Hill. The Greater Boulder area has a population of about 100,000, about 30,000 of them students at the University of Colorado – Boulder, which is nearly a mile from downtown.

Boulderites fiercely protect their views of the foothills of the Rockies, capping building height at 55 feet. (Some structures are grandfathered in, and the university is exempt though tries to be a good neighbor.) During the 1950s, a period of strong growth, town leaders set “the Blue Line” a little ways up the mountain. Similar to our Rural Buffer, no water and sewer lines can cross the line, which severely limits development. Boulder began buying up acreage along the Blue Line and today owns 45,000 acres of permanently conserved land.

Before we went on the trip, I heard fear-mongers blame development restrictions for Boulder’s notoriously high real estate costs – the median price for a single-family house is $863,000 – and intimated that Chapel Hill was on the same path. But once we heard the presentations from various city, university and business leaders, a different picture emerged.

Real estate prices are subject not only to supply and demand but to how much people will pay. In 1997, Bank of America billionaire C.D. Spangler offered the Dellingers a million dollars for the old Presbyterian manse on East Franklin in Chapel Hill. For the next year, sellers listed their homes on East Franklin for $1 million-plus before realizing that no more billionaires were interested in living on Franklin Street, and prices dropped by more than half.

Boulder is rife with venture capitalists and other ultra-wealthy individuals drawn to the town for reasons other than proximity to their job. If you’ve got $100 million in your checking account, paying $863,000 for a house doesn’t seem out of line.

Of all the people I spoke with involved in real estate, development or planning, not one believed that building a large supply of high-rent apartments would lower rents elsewhere in town. It would merely raise the floor of rents everywhere.

On the trip we learned that Boulder’s elected officials take affordable housing seriously. The town’s Inclusionary Zoning Ordinance calls for 20% of a development to be permanently affordable to those at the 60% AMI level. (Boulder’s AMI is about $94,000, due to all those high-paying tech jobs.) Boulder has a culture of risk-taking, and its city council has no problem turning down a developer who doesn’t want to adhere to town standards.

On the commercial side, when businesses outgrow their space, they move toward Denver but still stay in the region. Or they are sold, and the seller invests the proceeds in starting a new business. Either way, the money stays in the local or regional economy.

My takeaways? Supply-and-demand theory is out; town council backbone is in.
— Nancy Oates

Chapel Hill’s Arab Spring?

More than five years ago, a few weeks after the Tunisian Revolution that launched the Nancy OatesArab Spring, Syria’s President Bashar al-Assad told The Wall Street Journal: “When there is divergence between your policy and the people’s beliefs and interests, you will have this vacuum that creates disturbance.”

I hope we won’t someday look back on last Monday’s Town Council meeting and peg it as the beginning of Chapel Hill’s Arab Spring, whereby angry mobs, instead of taking to the streets, file a flurry of petitions with lots and lots of signatures.

At the Sept. 19 council meeting, Woodfield Investments presented its concept plan to build on 36 acres owned by the American Legion. In order for the project to be built, council would have to rezone the acreage and hammer out a Special Use Permit.

The project poses a perfect storm of conflict:

The town’s Comprehensive Plan calls for a park in that area, and many residents want the town to hold true to its word. Many community members devoted untold hours to giving input into shaping this document; they don’t want to see the plan dismissed at the first whiff of extra tax revenue. As the town becomes increasingly urban, a park takes on even more importance.

The American Legion wants the $10 million Woodfield has contracted to buy it for, providing the property is rezoned and an SUP can be worked out to allow up to 600 apartments plus commercial space and a road that runs through a small existing park. That price seems above market value, given that the 55-acre Carraway Village property (previously known as The Edge) with a similar number of apartments and commercial space sold for $11 million last spring.
Woodfield wants the high profit from all those apartments, which is a greater return than for office or retail.

And the town has long wanted to rebalance its ratio of residential space to commercial because homeowners are carrying about 85% of all property tax revenue. The 190-acre Ephesus-Fordham district is on track to be about 90% residential, and as that is form-based code, the town can’t intercede. The two concepts Woodfield put forth are each about 90% residential.

The Legion has offered to sell the land to the town for $9 million, but the land at present has a tax value of about $2.5 million, though it is expected to be revalued to about $4.8 million. Even so, the asking price is unreasonable.

The land is zoned R-2, which means the Legion could sell to a developer who would build single-family homes, four per acre, on the site. The Inclusionary Zoning Ordinance would be in effect, because the project would not come before council, and council would not have the opportunity to waive it, as the majority of council did with the last eligible project that came before us.

As available land becomes ever more scarce, council’s decisions on land use are even more important. Let’s hope we make wiser decisions about the good of the people than Assad has done.
— Nancy Oates

Powering through

Have we learned nothing? Last week a female student at UNC held a news conference to Nancy Oatesclaim that a classmate, a member of the football team, raped her. She was pursuing misdemeanor charges against him because the campus police had refused to file charges, and the district attorney’s office declined as well (though after the news conference, the DA’s office shifted its stance to give itself some wiggle room to reconsider).

According to the accuser, and we have hard only the accuser’s side, it sounds like she got drunk at a party on campus, passed out and was raped while she was incapacitated. She did everything she was supposed to do in the aftermath: She went to the hospital that same night, submitted to a rape kit, reported the alleged assault to campus police while at the hospital, and a couple weeks later notified UNC’s Title IX office.

The inaction by campus police and the DA’s office imply an underlying belief that in male-female interactions, the woman has to be the adult, the responsible one, because boys will be boys. And in this instance, apparently the woman did not meet those behavioral ideals that the (male) police and (male) prosecutors held.

The week before, following a foreign policy debate with Donald Trump, Hillary Clinton was criticized for not smiling enough. I didn’t see the debate, but presumably Trump grinned and chortled through the discussion of war and terrorism and the risk of nuclear annihilation, while Clinton treated the issues with the seriousness they deserve. By so doing, she did not live up to the (male) critic’s ideal of how a woman should behave.

The presidential race has brought to the fore a societal bias against women. The rape charge brought it home.

Respect for Clinton rose among women last week when she went to the 9/11 ceremony despite being ill with pneumonia. Many of us identify with her powering through. Every woman I know can recall innumerable instances when she came through for others despite her own health: taking care of sick family members while she herself was ill, arguing cases before a jury while in the throes of morning sickness (which lasts around the clock, I’m here to tell you), cooking dinner for the kids and continuing through their bedtime routine after being sucker-punched by devastating news.

The woman at UNC similarly garnered respect by powering through a news conference, going public with a very personal, private experience, and shining a light on society’s double standard while pointing out the holes in UNC’s safety net so recently put in place.

What have we learned by the examples of the woman at UNC, Clinton and the millions of women around the world who press on through every challenge? The same lesson that UNC administrators are about to learn: Women power through.
— Nancy Oates

How much is that rent, really?

Trying to find an apartment in Chapel Hill affordable to your typical Chapel Hill Nancy Oatesworker takes diligence and a roommate. An apartment complex may advertise rent at one price, but by the time the management adds up all the additional mandatory fees — valet garbage pick-up, package delivery acceptance, weight room access, and Internet and cable service — the real cost to live there has ballooned by more than $150 a month. And that doesn’t include utilities.

The practice is deceptive. And regarding Internet and cable, it’s illegal.

In 2007, the Federal Communications Commission banned apartments and homeowner associations from imposing exclusive cable deals, reasoning that competition lowers prices more than do apartment owners, who get a cheaper bulk price but rarely pass the savings along to tenants. The ruling held up to a challenge in federal court in 2009.

Eller Capital Partners CEO Daniel Eller said tenants in his properties didn’t have to use the cable, but they couldn’t reduce the $125-a-month fee. GSC, Alexan and Shortbread, who do allow tenants to opt out of cable, apparently received different legal advice.

Although Eller’s Timber Hollow advertises that it has an unrenovated one-bedroom for $775 a month, the mandatory fee raises the rent to $900. Never mind that all of the unrenovated apartments are leased, and as soon as the tenant moves out, the granite and brushed nickel move in, pushing the base rent to $850, and the real rent to $975.

The deception isn’t limited to price. Alexan advertises free parking, but when pressed, the sales rep admitted it was available only first-come-first-served. The luxury building in Village Plaza plans to reserve the top four floors in its parking deck for tenants in its 266 one- and two-bedroom apartments. Because it describes its two-bedroom units as “one-bedroom plus den,” Alexan needs to provide only 1.25 spaces per unit. Its permit caps parking at 463 spaces, 70 of which are dedicated to Whole Foods.

Chapel Hill-Carrboro Chamber of Commerce executive director Aaron Nelson patiently explained to me that Alexan’s $1,500-a-month one-bedroom (plus the mandatory amenities fee) was affordable if two people shared it, a microaggression against single people. Doing the math, Alexan’s tenants will fill up the parking deck and spill over into surface parking that neighboring businesses have paid for in their rent. Those businesses effectively subsidize Alexan.

Community member Ken Larsen anticipated this problem and petitioned Town Council in February to rework the parking formula. The petition was routed to the town’s Planning and Sustainability Department, and he has heard nothing more.

Where is the affordability that building more luxury rentals was supposed to free up? It does not exist. We learned in the Reagan era: Trickle-down doesn’t work. In real life, building more luxury apartments raises the floor of rents throughout town. All of a sudden, Eller’s $975-a-month unit looks affordable because it is considerably less than Alexan’s $1,500-plus. And Alexan’s rent rose 30% from the time it was approved because other luxury apartments came online that made $1,500-plus seem affordable by comparison.

I wish I had a quick fix for this problem. A first step is to educate all council members on the unintended consequences of approving the development of so many luxury apartments.
— Nancy Oates

Don’t let Google be lonely

Google unveiled its new sign last week. The tasteful, illuminated logo on the Church Nancy OatesStreet side of 200 W. Franklin St. perhaps quelled fears that the town’s new sign ordinance would result in a wave of garishness overpowering our downtown’s charm.

Chapel Hill has been Google’s home for the past decade, but few people knew that, because the Chapel Hill office, and another in Durham, are part of the Google data center in Lenoir, N.C., a site Google likely chose because the land and talent are less expensive than in Silicon Valley. When Google needed tech-savvy people to implement graphics for Chrome, the global corporation understood it might be difficult and time-consuming to recruit top talent to a bucolic yet sleepy town in the North Carolina mountains. A better strategy would be to look for a Software-as-a-Service start-up and buy it outright.

In 2005, Google found and acquired Skia in Chapel Hill’s Southern Village, started by UNC alum Mike Reed a year early. In 2014, the Google Skia division left Southern Village and took over a floor in the 200 W. Franklin St. building.

Reed could be the poster boy for why we need to make room for start-ups in Chapel Hill. Skia is the fourth tech company he has started and sold to global corporations. His Google office on West Franklin employs about 20 people, all of whom would rather work in Chapel Hill than Silicon Valley. (Though apparently not live in town. My micro-survey of people I spoke with at the sign-unveiling reception revealed that only Reed lived in Chapel Hill. The other employees I queried live in Durham and commute in.)

The as-a-service industry is in the midst of explosive growth, especially the Infrastructure-as-a-Service line, which basically enables businesses to rent an IT department, complete with software, hosting platform and help desk. For a business just starting out, hiring an IaaS provider can be a cost-effective way to figure out what IT services the company needs before making a sizeable investment.

When any industry grows so quickly, consolidation follows. The Googles of the world shop for the Skias.

Chapel Hill has a better chance of keeping Google if the town becomes a tech hub. Our cost of living compares favorably to Silicon Valley, and our winters beat those of Kansas City, another tech hub. But the tech engineers need people to talk to. We can help by letting tech companies know we are open to their business. We might partner with UNC’s computer science department to host summits. We need open office space downtown, and we need an identifiable place to park.

We appreciate Google’s name glowing in our skyline. Next step is to recruit some high-tech peers so Chapel Hill will become a recognizable name in the tech world.
— Nancy Oates

Think of the possibilities, then plan

How many times have we heard, usually from people who make money by developing or Nancy Oatesselling real estate, that affordable housing is not possible in Chapel Hill? That we might as well admit defeat and build only luxury apartments in town, thus forcing out the modestly paid and the middle class?

Yet towns similar to Chapel Hill have been able to create housing affordable to people who work in the community. Earlier this month the CEO of Habitat for Humanity in Charlottesville, Va., Dan Rosensweig, came to Chapel Hill and spoke to affordable housing advocates, potential donors and interested elected officials to share the success his organization has had and talk about what might be possible in Orange County.

Two of Charlottesville’s successes have come from Habitat redeveloping trailer parks into multifamily neighborhoods, one of them a mixed-income community where market-rate houses help subsidize affordable homes.

While mobile homes provide a very affordable living situation, trailers built before the mid ’70s can’t be moved. If the trailer park is sold, owners of those older mobile homes lose their investment along with their place to live.

In-town trailer parks are a threatened source of affordable housing. As large parcels of land become more scarce, and developers of high-profit luxury apartments are willing to shell out exorbitant amounts for remaining acreage, trailer park owners stand to make a lot of money by selling out. It takes a landowner with a strong humanitarian commitment to resist.

Charlottesville Habitat found such a landowner, a woman who owned a trailer park that was home to 1,500 people. She sold the land to Habitat at a reasonable price and agreed to owner financing in which Habitat paid interest only on the loan until it could raise the full amount. Habitat partnered with the mobile home owners to collaborate on redevelopment ideas.

Could something like this work in Chapel Hill? We’ve got some obstacles to overcome first, not the least of which is Town Council. While Chapel Hill has an Inclusionary Zoning Ordinance, a majority of council members have voted to waive compliance for every eligible project that has come before them, except for Courtyards of Homestead, which made a nearly $900,000 payment-in-lieu.

Rosensweig mentioned that elected officials in Charlottesville had approved by-right zoning for the Habitat projects, and he looked at me in disbelief when I told him that the majority of council members in Chapel Hill had not included any requirements for affordable housing or environmental building standards in the by-right zoning they approved for Ephesus-Fordham.

Taxpayers have agreed to dedicate a penny tax increase for affordable housing, but council committees still have no plan for how to use it. The county is proposing a bond in November with $5 million for affordable housing, but likewise seems to have no plan for how to spend it. This will not get us where we want to go.

Nonprofits whose mission is to increase the supply of affordable housing have some ideas and would like to be part of formulating a plan. We need to lend them our support and lobby for a change of heart among the old guard on council.
— Nancy Oates

Best practices, best officers

In North Carolina, a barber needs 1,000 hours of training to get licensed. A law Nancy Oatesenforcement officer receives 616 hours. As society and circumstances change — think the closing of mental health facilities at the turn of this century that left law enforcement officers to intervene when a mentally ill person posed harm to the public — officers could benefit from different training. But first, something would have to be removed from the curriculum.

Last week, the N.C. League of Municipalities and the N.C. Legislative Black Caucus co-hosted a panel discussion of “Best Practices in Law Enforcement Training.” The sheriff, two police chiefs and law enforcement instructor who composed the panel fielded questions from the moderator and the floor and responded with reassuring depth, pragmatism and intelligence.

The topics ranged from body cameras (they protect the relationships between law enforcement and the community, not to mention reducing claims against law enforcement agencies, thus reducing insurance costs that taxpayers ultimately cover) to implicit bias (it can’t be trained away, but officers and the public can learn to recognize it in themselves and temper their actions) and seized assets (don’t rely on them to fund operations; the state legislature needs to supply sufficient funding to train officers and run departments).

Chief Brandon Zuidema of the Garner PD noted that jail is the largest mental health facility in the state. In the U.S., said Chief Jeanne Miller of the Davidson PD, we allow people to be crazy in public, and officers have to juggle constitutional rights with public safety. Officers need Crisis Intervention Training, because when anything goes wrong, officers are called to make it right, regardless of whether they are trained for that situation. But even free training costs departments money to pay overtime to cover the shifts for officers away on training.

Officers in the riskiest situations tend to be young and inexperienced, because senior officers are not on the graveyard shifts that would have them pull over a car on a deserted roadway at 2 in the morning. And young people are not as adept at using an officer’s most trusted weapon: their mouth. Young people aren’t used to talking, said Jonathan Gregory, director of basic law enforcement training at Wake Tech, yet talking builds trust. Recruits need to be taught decision-making, but the emphasis of the training is on firearms.

For a law enforcement agency to be certified, it must adhere to 460 standards, half of which are about doing the right thing, and the other half are proving you’re doing the right thing. Making sure that what’s on paper is being followed is critically important, said Hoke County Sheriff Hubert Peterkin who recalls growing up as a young black man when officers didn’t feel the need to adhere to professional standards. Organizational culture eats policy for lunch, he said, and he holds his deputies to a zero-tolerance standard of behavior for racial and gender bias.

The panelists agreed on the need to expand the applicant pool for law enforcement positions, but the job is a hard sell: round-the-clock schedules, low pay, long hours of monotony interspersed with life-or-death situations with little warning, and no guarantee that when you start a shift you’ll return home alive.

Still, it’s an honorable profession. And every day, officers have the opportunity to make a difference.
— Nancy Oates