You’re more likely to behave yourself if you live next 
door to your landlord. Jay Patel of, well, a few different business partnerships, but known by Chapel Hillians as the owner of the Franklin Hotel, apparently ascribes to that theory. At tonight’s Town Council meeting, he will present a concept review of Franklin Student Housing, an apartment complex to be built on the parking lots behind the Franklin Hotel and where The Chapel Hill Herald office used to be.
Patel’s proposal is to construct a 6-story building for 55 apartments (177 bedrooms), and 121 parking spaces contained in two underground levels. His target market is students, and the only neighbors to the project are Patel’s hotel and other students. The project abuts the Cameron-McCauley Historic District, and those particular houses on Mallette Street are rented by students. If the students in his apartments get out of hand, the only neighbors likely to complain would be guests in Patel’s hotel. I would expect Patel to be run a tight ship with his tenants.
Downtown needs more residents. Because Patel has already invested in the property next door, this particular project seems a good risk. What seems odd is his description of his apartments as affordable.
Two terms that get council members all dewy-eyed are “coffee shop” and “affordable,” and developers have learned to push both terms in appearing before council for approval.
Council uses Housing & Urban Development calculations to determine affordability: A tenant should pay no more than 30% of the Area Median Income for housing. Chapel Hill’s AMI is quite high ($58,860 for a single person in 2011) compared to nearby towns. Town Council looks at affordability levels of 80% and 65% AMI. Monthly rent for a single person would be $950 at the 80% AMI level and $772 at the 65% level.
But – loophole alert – that is household size, not apartment size. Technically, a landlord charging rent by the bedroom, which is the norm for student rentals, could charge $3,800 a month for a four-bedroom apartment and still qualify as affordable at the 80% AMI level because each single student is charged no more than $950 a month.
Patel has asked for a density bonus because he plans to price rents to make them affordable according to HUD standards. He hasn’t specified what size units he will designate as affordable.
But – buzzkill alert – state law prohibits a landowner from “buying” favorable zoning in exchange for providing rent restrictions, which is what a density bonus is. For council to allow a density bonus for a promise of lower rents is to leave the town open to lawsuits.
Patel is not pulling a bait-and-switch, which is what some of us felt the Bicycle-turned-Lux developers did. He is being straightforward about his plans. These will be student rentals; the market rate for student rentals downtown is about $850 a month per bedroom. Patel is simply taking advantage of council expectations that have never been precisely committed to paper.
We’ve got two lawyers on council in addition to a town attorney. They should get together and figure out language that closes the loopholes.
– Nancy Oates
Joe
/ November 18, 2013Sounds like a great project to me! Good density. Students within walking distance from campus. Relatively affordable. Student housing near other student housing.
Nancy, I don’t understand what you don’t like about this project. It’s not clear from your posting, and it’s not even clear if I squint really hard and try to read between the lines.
Nancy
/ November 18, 2013Joe — Here’s the Twitter version of my stance on the project: “Downtown needs more residents. Because Patel has already invested in the property next door, this particular project seems a good risk. What seems odd is his description of his apartments as affordable.” Doesn’t require reading between the lines as much as it does reading all the paragraphs.
many
/ November 18, 2013That’s it then, I am opening an affordable coffee shop.
Geoff Green
/ November 18, 2013What loophole? There is no loophole. The applicant states: “As to affordable housing, since this is a proposed for-rent project, we envision a combination of committing to affordable rents plus making an appropriate payment in lieu of providing “affordable” dwelling units, and then also utilizing the density bonus that is derived from the affordable-unit payment-in-lieu.”
As you do accurately state, state law forbids any type of rent control. So the applicant’s generic “committal” to affordable rents can’t be legally binding. But the applicant also notes the entitlement to the density bonus is contingent upon making a payment-in-lieu, something that is permitted under the inclusionary zoning ordinance.
The affordable housing ordinance allows for a density bonus with the provision of affordable dwelling “units,” not rooms. There are 55 dwelling units proposed, with a total of 177 beds. There’s no loophole that would allow them to designate ten “rooms” as affordable, unless the Council chose to allow them to do something as part of a SUP. The definition of a “dwelling unit” in the Town’s LUMO is “A room or group of rooms within a dwelling forming a single independent habitable unit used or intended to be used for living, sleeping, sanitation, cooking, and eating purposes by one family only; for owner occupancy or for rental, lease, or other occupancy on a weekly or longer basis; and containing independent kitchen, sanitary, and sleeping facilities; and provided such dwelling unit complies with Chapel Hill’s Minimum Housing Code.” A single room in a multi-bedroom apartment likely would not comply.
Your ancillary claim is that certain council members are so awed by the use of the word “affordable” that they’ll approve it anyway. That’s your take, and has nothing to do with the town’s inclusionary zoning ordinance. But then you add “We’ve got two lawyers on council in addition to a town attorney. They should get together and figure out language that closes the loopholes.” There’s no loophole to close.
Bonnie
/ November 18, 2013I’m confused – is this affordable housing for low income families or student housing?
many
/ November 18, 2013Bonnie, as I have pointed out before, the two are not mutually exclusive.
Nancy
/ November 18, 2013Yes and no, Many. Qualifying for affordable housing or any sort of subsidy as a student is based on the parents’ income until the student is 26. And when it comes to the value you get for the money, you can’t beat a dorm. Not that there aren’t students with families who would qualify, but the pool that would qualify and turn their backs on dorms is relatively small.
Town council had a very open discussion tonight, including looking realistically at who would want to live in undergrad student housing. Likely it won’t be families. But it could be wait staff at downtown restaurants and other singles or young couples who aren’t that far removed from undergraduate life themselves. It was refreshing to have that kind of frankness from the dais. Pease, Storrow, Greene, Czajkowski, Ward and Kleinschmidt, as long as we’re naming names, all peeled back the marketing palaver to talk about how the project would function and fit with the town and council’s expectations. No hostility, because Jay Patel has a track record of making positive contributions to the town. When the video is posted on the town website tomorrow, I recommend all cynics watch the council’s comments on Franklin Student Housing. You might feel an uncharacteristic lightness called hope.
Joe
/ November 19, 2013“Town council had a very open discussion tonight, including looking realistically at who would want to live in undergrad student housing. Likely it won’t be families. But it could be wait staff at downtown restaurants and other singles or young couples who aren’t that far removed from undergraduate life themselves.”
Sounds great! That’s exactly the kind of housing Chapel Hill needs more of.
many
/ November 19, 2013Hi Nancy,
The people I was thinking of when I wrote that were grad students, some with families (some try to have it all). I personally have known several that at or below the poverty line scraping by while they got their graduate studies completed. Back in the day, I was one (albeit without a family); (Envision the worlds worst waiter, so for me, tipping was a city in China.)
This study by hhs (which I think I pointed Bonnie to before) shows the student impact in Orange County on the NC poverty rate (page 16):
http://www.census.gov/hhes/www/poverty/publications/bishaw.pdf
Poverty numbers are increased 4.8% by college students living in poverty off campus. which is almost 6,000 people by my calculation. The number over the age of 26 is not known I suspect most under that age are in dorms and are not counted. Now of course the expectation is that their poverty is not chronic, but t’s a significant number none-the-less.
Bonnie Hauser
/ November 19, 2013Many I appreciate your point. I prefer to separate students from low income families. I see it as a different “problem” – and when we blur them – we miss the opportunity.
Student housing wont help those minimum wage workers at UNC and UNC healthcare who have no health insurance, and who rely on county social services, free school lunches, low cost housing and public transportation. I agree that restaurant workers and others supporting families on modest incomes qualify.
Part of the problem is since a landlord can get $3000 for a four bedroom place from students, affordable housing for families has become even more scarce.
many
/ November 19, 2013I was trying to point out that many of the low wage workers are students, and probably at least some work in Mr. Patel’s establishments . Poor is measured by income and everyone has to live somewhere.
I just don’t see a benefit in separating the student poor or how that might lead to some sort of solution. How do you propose to discriminate between the chronically poor and student poor when it comes to housing? Put another way; other than the sort of calculation Nancy is attributing to Mr. Patel, how do you keep students (or anyone else) from affecting the cost of housing when the vacancy rate is around 7%?