Housing hypocrisy

I couldn’t help but wince when council members began their remarks at the MayNancy Oates 19 Town Council meeting after nearly a dozen community members made impassioned pleas for money to support affordable housing. One organization played a 9-minute video of interviews with people who had benefited from affordable housing programs in Chapel Hill, perhaps assuming some council members didn’t believe that these people truly exist. Which is not a far-fetched assumption given the way a majority of council voted on recent development projects that directly affect the affordability of housing in town.

Council members are in the midst of tweaking the town manager’s proposed budget for fiscal year 2015, which starts July 1, 2014. Donna Bell, who adopted a let-them-eat-cake attitude toward those of modest means throughout the Ephesus-Fordham redevelopment process, started off the council comment period by suggesting that money for affordable housing be found in the budget by not paying anything toward the town’s OPEB liability. OPEB is the amount the town has to pay retired employees for pensions and health coverage. Though town manager Roger Stancil has made some changes in what new hires can expect when they retire, which has reduced the OPEB liability by millions, the town still has an obligation of about $60 million.

The next few council members who spoke agreed to jettison paying down our OPEB liability. After all, even such a large unfunded liability will take years to make the town go belly up, long after current council members have stepped down. Or most of them, anyhow. (Let’s hope they take a more responsible approach to planning for their own retirement than they do for the town employees they represent.)

What made the comments from council members so painful to listen to was that the most ardent hand-wringing came from council members who had voted against structuring the Ephesus-Fordham redevelopment plan to press developers for affordable housing.

Most council members seemed eager to give the public the impression they supported affordable housing. And in their vision of themselves, I think they do. But they’re not making the connection between their votes and the unintended consequences that result. Just as a budget has finite boundaries – if you add to one category, you must cut from another – so, too, is the housing supply in a town constricted by a rural buffer guarding its border. If you make room for developers to create high-rent units, you have less real estate left for housing the rest of us can afford.

Rather than scramble to find the least vocal group from which to take funds and redirecting them to affordable housing, council could ease the pressure on themselves and the rest of us taxpayers by thinking through the consequences of their votes before they make them.
– Nancy Oates

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30 Comments

  1. David

     /  May 26, 2014

    Not only were the majority of Town Council members—most especially including Donna Bell—unwilling to create affordable housing incentives for Ephesus-Fordham, the inclusionary zoning ordinance that applies elsewhere in town is rather stingy in comparison to other communities. It requires developers to make only 15% of new residential units affordable for residents who make slightly below our area’s median household income. By contrast, the citizens of Berkeley, CA recently opposed a downtown redevelopment plan that only required 20% of new units to be affordable; the citizens called for 25%.

    http://www.dailycal.org/2012/03/21/city-council-approves-berkeleys-downtown-area-plan/

  2. many

     /  May 26, 2014

    @ David, For the purpose of discussion would you define “affordable” in the context of Chapel Hill and are you talking about rental, ownership or both?

  3. David

     /  May 27, 2014

    Many,

    Your first question is answered here: http://www.townofchapelhill.org/Modules/ShowDocument.aspx?documentid=7172

    Here’s an excerpt:

    10. What are the target income levels for pricing of affordable dwelling units?
    Answer: When pricing the units, at least one affordable unit, or at least 50% of the affordable units, must be offered for sale to low-income households at a price that is affordable to households at 65% of the area median income.
    Any remaining affordable housing units must be for sale at a price that is affordable to households who are at or below 80% of the area median income. The area median income (or AMI) is based upon household size for the Durham-Chapel Hill Metropolitan Statistical Area and is determined by the United States Department of Housing and Urban Development (HUD). Information about the area median income can be found at: http://www.huduser.org/intercept.asp?loc=/datasets/il/il08/FY2008_Section8_IncomeLimits.pdf

    The Town’s inclusionary zoning ordinance only pertains to for-sale housing, not to rental housing. The limited—and decreasing—amount of decent-quality rental housing for low- to moderate- income households in Chapel Hill is a real problem.

  4. many

     /  May 28, 2014

    @David

    I have read the same inclusionary zoning document you have, however the HUD link does not show “median” income. It shows 30% of median, so the median as I calculate it (family of 2) is ~56.5K, 80% of that figure is below 45K and 65% is 37K. Is that your figure too? If so, I am not surprised the community trust is finding it difficult to fill the stock of tiny low income housing units for sale. http://www.dailytarheel.com/article/2013/10/community-home-trust-struggles-to-sell-condos-to-young-buyers

    For the same money you can do better elsewhere and be closer to shopping. Based on the proximal abundance of preferable alternatives, I doubt the SF model would make much difference here.

    As far as rentals go, that was the other point I was trying to get to. There are no initiatives for affordable rentals. The market for rentals has an extremely low vacancy rate (university town). The profit is in high end stock. Therefore; like the boutique shopping intended to reduce incoming shoppers, Chapel Hill is catering to the folks that already live here.

    These tactics are not unique, or even necessarily evil, but to Nancy’s point; the hand wringing over economic development and affordable housing has reached soaring new heights of hypocrisy. Look for the hypocritical hyperbole to increase as time progresses, further obscuring any chance of rational discourse, policy and solutions.

  5. Anita Badrock

     /  May 28, 2014

    you can find the HUD income information on the HUD website. The link is too long to post, but search for

    HUD 2014 income limits orange county nc
    Family of 1 80% AMI is 36, 800
    Family of 2 80% AMI is 42, 050.
    Family of 4 80% AMI is 52, 550.

    (By the way these numbers are lower now than they were 8 years ago–they went down again last year–think about what that means…….)
    the average Community Home Trust buyer is at about 65% AMI based on Household size.

    And though we had concerns about selling the small condos, the market reality was that we sold our 140 West units and our Greenbridge units more quickly than we expected. Many of those buyers work in downtown businesses, , on campus, or at the hospital. Even the retirees–of which there are some—like being downtown.

    What we do know is that the one bedroom units probably won’t work for someone whose household size increases after they purchase. That’s the main reason our sellers sell–they outgrow their homes–they enter into partnerships or get married, or have more kids, or have another family member move in.
    . That’s also the same reason a lot of people sell. .

  6. David Schwartz

     /  May 28, 2014

    Many,

    If you want to claim that many of our Town’s elected leaders have more talent for mouthing politically-correct platitudes than for sound policy-making you will hear no argument from me. I will admit, though, that I am perplexed as to how the Town came to be in its current predicament. I grew up here in the 1970s and 1980s, so I remember when a much smaller population supported three—three!—department stores in University Mall and a supermarket on Franklin Street. How is it that with our current much larger population we now have nowhere in Chapel Hill to buy underwear, and folks who live in the highest density part of the city have to get in their cars to go purchase groceries?

    Perhaps if we set up toll booths at each of the entrances to town and charge drivers a hefty fee each time they enter or leave the city, that will shift the economic calculus and make more moderate-income families choose to live here rather than commuting from Durham or Pittsboro.

  7. many

     /  May 28, 2014

    @Anita Thank you. Interesting, but my point stands that the value is better elsewhere. Has any thought been given to selling the units to a trust who could then rent them at affordable rates?

    @David, We arrived her in 1980. Before I40, Kildare was still a farm and the RTP really took off. Much has changed. I can only point to competition (including online) and a less exclusionary policies in neighboring counties as the reason that Chapel Hill in in the situation it is in. Again, this seems to me to be more by design than by accident.

  8. David Schwartz

     /  May 28, 2014

    The completion of I-40 in the late 80’s, and the subsequent opening of Southpoint a mere two exits down the road definitely drew shoppers away from University Mall and from Chapel Hill generally, as did the internet, though I myself rarely shop there, except to visit the Apple Store. I had always been under the impression that the reason the section of I-40 that passes through Orange County was the last to be built was because Jesse Helms held it up out of spite, but according to Wikipedia, Orange County opposed construction of the highway for 15 years, only dropping its lawsuit in 1983. Those who opposed it were sadly prescient.

  9. many

     /  May 29, 2014

    @David …and that is not all the opposition that has held Chapel Hill and Orange County back. In the 1990s when the free cell tower build out was happening OC and Ch-Hill squashed the coverage needed for next generation services and commerce. As I pointed out in another thread Orange County passed an ordinance to required schools be funded (SAPFO) but carefully ignored the precedent in other states which have an ordinance requiring adequate public funding of infrastructure generally, not just schools allowing OWASA to maintain a strangle hold on economic development.

    Again, I have to believe this was all by design not by accident, but I also doubt the leadership even made an attempt to think through the unintended consequences. Of course those were the salad days and no one thought it would end.

    It will likely be OK once the storm is weathered. OC is rapidly permitting the cell tower infrastructure now.
    Even though Ch-Hill & OC are giving lip service to “economic development” on line shopping will be the norm, even for small business and very little brick & mortar commerce will be needed, Taxes will likely move even more form from income to Use or VAT. All that that will take a while though and in the short term spending on wants before needs has not abated much.

  10. Joe

     /  May 29, 2014

    The very idea that the solution to the housing issue is to allow the town to dictate what is going to be sold to whom and for how much is patently absurd. The only thing that is going to have a significant impact on housing prices is to increase the housing stock. This whole forced “affordable housing” thing that the town half-heartedly does, and that Nancy is convinced is the Saviour of the Poor is absurdly ineffectual.

  11. many

     /  May 29, 2014

    @Joe,

    Business Insider makes a compelling case (by way of a piece in tech crunch) for why the “econ 101″ argument is wrong:
    http://www.businessinsider.com/new-housing-alone-wont-fix-san-francisco-real-estate-2014-4#ixzz2z96T6bZR

    “…………But overall, he has a point. There’s a limited amount of space available for development in San Francisco; a huge portion of the development going on over the last few years has been aimed at the high end of the market.

    If that trend continues, it’s inevitable that lower- and middle-income residents will be priced out of the market………………..”

    I can see the point being made and how the same market forces inherent in San Francisco have been artificially recreated and are in the process of playing out in Chapel Hill and Orange County.

  12. David Schwartz

     /  May 30, 2014

    @many,

    I haven’t read enough of your posts to know what general approach to economic development you advocate for CH and OC. What specific recommendations do you have for how the town and county can promote widespread prosperity while also conserving as much as possible the small(ish) town characteristics that many of us appreciate? When you write that CH and OC have been held back, what yardstick are you using. Held back compared to what? How might our situation be different if the policies you support were implemented?

    Cheers,

    David

  13. many

     /  May 30, 2014

    @David,

    First to be clear; by “held back” I mean that relative to the context of Durham, Raleigh, Cary, Wake Forest, Mebane and soon to be Pittsboro. This is not necessarily a bad thing overall, but it terms of tax diversity and economic development it is a problem.

    I do not feel these are novel or radical ideas, but doubt any of the strategies would be adopted.

    For economic development both towns & county need to work more closely:

    1) Be honest. If the goal is not economic development and diversifying the tax base then say so. Clearly state policy and quit throwing dust in the air with nebulous generalities and meaningless lip service.

    Presuming the goal is economic development and diversifying the tax base, and not implying priority or order, however there are some dependencies:

    2) Disband OWASA and integrate the water/sewer policy into a comprehensive county wide citizen driven planning department
    3) Reign in TTA and their siphoning of our transit dollars and exporting of our tax dollars to other municipalities malls Negotiate a more equitable interconnection partnership between TTA and CHT, Consider a fare for CHT
    4) Integrate planning and economic development functions
    5) Amend SAPFO to be more broadly APFO
    6) Decide a specific set of economic development areas for focus (e.g I-40 & 86, 15-401 south, 70 west, and of course Buckhorn).
    7) Build infrastructure (water sewer, transportation, communications etc.) at those places
    8) Target specific business/industry to be attracted (those that are consistent with community goals & values, eg. medical, technology, alternative power, etc)
    9) Allow “big box” retail development on 15=501 and at I-40 interchanges
    10) Remove restrictions on seven-mile creek (now that there is no reservoir planned there)
    11) Investigate the possibility of a treatment plant at Cane Creek
    12) Link infrastructure with neighboring communities/cities (e.g water & sewer)
    13) Link and leverage goals with neighboring communities/cites (eg. trash, water)
    14) Develop Ephesus/Fordham, with density using form based coding but fix the water and other infrastructure problems that were glossed over in the 80s.

    As far as affordable housing goes:

    1) Acknowledge that there will never be an abundance of affordable housing in Chapel Hill
    2) Create a 501c3s to administer private donations and funds from local investment from banks mandated by the Community Reinvestment Act, a 1977
    3) Create a Chapel Hill/Orange County affordable housing authority (not department) that allows low and moderate-income families to rent homes alongside wealthier neighbors at steeply discounted prices. (subsidized). These homes have to be well disabused within the community. This mix should be targeted at 7-10% of the housing stock and be managed by someone with a broad scope. The housing authority would have three parts: policy, fundraising, and overseeing the trust fund. (again some relationship with planning comes to mind)
    4) Bridge town government, the housing authority and the private sector to coordinate housing policy, and the implementation of new inclusive zoning regulations by the planning and zoning.
    5) Put strict legal requirements on tenants and landlords outlining rules/behavior/income limits and do not allow any of the subsidized housing to be owned by absentee landlords (not certain that is legal but it should be and is worth a try).

  14. many

     /  May 30, 2014

    yikes. “disabused” should read “disbursed” above (damn spell checker)

  15. Terri Buckner

     /  May 31, 2014

    OWASA is already ‘citizen driven’ and it’s already linked to neighboring communities (Durham, Hillsborough, and Chatham Co).

  16. many

     /  May 31, 2014

    Noah Cross would be proud of OWASA.

    OWASA is the impediment it was designed to be. It took them decades to link to other communities and the linkage is tenuous at best, OWASAis not linked planning and operates as a fiefdom governed by hand picked political appointees.

    The length of time it took to get water & sewer to Rogers road is a testimony to the workings of OWASA.

  17. Terri

     /  May 31, 2014

    OWASA and all the other Triangle water and sewer utilities do joint planning to a certain extent. We have interconnects to support each other in the event of emergencies (either operational or natural). We are also looking at the infrastructure requirements for expanded regional interconnects.

    The Rogers Road issue is outside the control or authority of OWASA. If those residents had been willing to pay for connecting the water or sewer, they would have had to service years ago. Same for all the other small neighborhoods around the area that are still dependent on wells and septic.

    In areas where water and sewer is part of local government operations, costs like connection fees and construction can be distributed among multiple budgets. As a non-profit, OWASA is not able to do that kind of cost shifting, nor are we legally allowed to.

    As for your earlier statement that OWASA has restricted growth, only elected officials have the authority to restrict growth. OWASA, like the school systems, reviews construction plans on those projects that qualify for review and notifies the planning boards and developers if there are any serious concerns associated with water and sewer. Otherwise all development goes forward. We do set the standards for any W&S infrastructure that is required.

  18. many

     /  May 31, 2014

    Terri (note the “i”) Since the first promise of water and sewer in 1987? Really? Or was it 1991-92 during the second landfill snipe hunt? Or 2001 when the fund to OWASA to build the sewer lines was created (finally) and the water and sewer master plan was created? perhaps it was in 2005 when OWASA was discussing how they compared with bottled water, rather than bringing it to RR? Maybe 2009 when the tainted wells were first discovered? I could go on…..

    Anyone can see OWASA participated and in complicit in the circular finger pointing game that is fashionable between the county, towns and OWASA when the conversation turns to water and sewer.

    Ultimately the reason it took so long to extend sewers to Rogers Road (in Carrboros ETJ) was due to Carrboro and Chapel Hill dragging their feet, even though they contributed +70% of the trash to the landfill. Even then, a paltry 900K of a 5.8 million dollar project from Carrboro was approved in 2012. It is now 2014 and they are close, but still not completed, While OWASA stands at the sidelines with their collective hands in their pockets saying we were only following orders.

    OWASA restricts growth by its non-profit bureaucracy and as a foil for the municipalities dissembling and subterfuge as it was designed to do.

    BTW OWASA still sits on a rather significant share of water from Jordan Lake which it did nothing with and finally on 2002 that allocation was cut in half. OWASA only has that “…joint planning to a certain extent” because they are concerned about further reductions in their share. I expect that the proposed Chatham Park will have a profound effect on allocations in the future.

  19. Nancy

     /  May 31, 2014

    I’m vague on the details, Terri or Many you may know, but I recall OWASA making an impassioned plea to Town Council a year or two ago wanting to increase our portion of Jordan Lake water, and Town Council voting it down because CH did want want any more of the “inferior” Jordan water. Given Chatham Park, council may have some regrets, and OWASA can say “I told you so,” though that doesn’t do the rest of us any good.

  20. Terri

     /  May 31, 2014

    OWASA has had an allocation from Jordan Lake for many years and we still do. The town misunderstood the intent of the renewal and thought OWASA was going to be using the allocation more than we had in the past (making more water available instead of promoting conservation). Once we clarified that the allocation would not be used except in extreme drought or emergency, everyone got on board.

    Apparently the anonymous one believes that it’s OWASA’s responsibility to solve the social justice issues with Rogers Road. Why just Rogers Road and not all the neighborhoods and individual homeowners that rely on septic and wells? There are thousands of them within the OWASA service district.

    Any neighborhood can choose to connect to OWASA. It requires a central line and then lateral connections. For Rogers Road, the county will be paying for the central line and each homeowner will have to pick up the cost of the lateral. There is no assurance that those lateral connections will be made even after the central line is made available.

  21. many

     /  May 31, 2014

    Nancy; see here:
    http://www.owasa.org/Data/Sites/1/media/about/minutes/2011/fransen%20transcript%2012-08-2011.pdf

    I used Rogers Road as an example because of all of the areas primed for development it is the Rogers – Eubanks Road area. .Yet we are talking about Ephasus-Fordham and Obey Creek only. Why is that?

    The fact that OWASA has no “responsibility” is exactly my point. In this area, control of water = control of development. OWASA serves the political agendas of the towns and county and provides a convenient buffer for the elected officials.

    OWASA has served it original purpose well, but OWASA is simply the wrong tool whether the goal is economic development, tax diversification or “social justice”.

  22. Terri

     /  May 31, 2014

    In other words, Many wants to ditch the urban boundary.

    Of course OWASA serves the political agendas of the towns. Why shouldn’t we? It’s the elected officials who are empowered to make development decisions. That’s why SAPFO doesn’t work. The school board isn’t going to accept the responsibility for doing what the towns don’t want to do which is to say we can’t afford to continue growing the residential population.

    As for his suggestion that OWASA should be restructured into a citizen-controlled non profit, I assume he means have the board of directors like the school board. .

    OWASA was created when UNC was required to divest itself of utility services back in the 1970s. Carrboro had their own system at that time. In the contract between UNC, Chapel Hill, Carrboro, Orange County and Hillsborough conditions were imposed and any changes to those conditions would require all partners to agree. The disagreement Nancy raised was due to a change the OWASA attorney wanted to make to one of the guiding contracts. It was a relatively small, innocuous change but Chapel Hill and Carrboro refused to agree thinking it would reduce the emphasis on water conservation. Getting all 5 entities to agree to anything would be exceptionally challenging based on that most recent experience.

  23. many

     /  May 31, 2014

    Terri with an “i”, No one except you said I wanted to ditch anything. I am merely pointing out that the status-quo is not consistent with the rhetoric. .

    The problem is that OWASA is supposed to serve their customers and the citizens, not be a proxy for political inertia.

    Your recall is a perfect example of how the 70’s Balkanization remains and has been used by the status-quo to maintain an agenda.

    UNC used to control the transportation, communications and power grid too. Somehow those systems have managed to evolve, but not OWASA. As I said before, Noah Cross would be proud.

  24. many

     /  June 2, 2014

    Well @David?….. I put my cards on the table. How about you? What are your suggested solutions?

  25. David

     /  June 10, 2014

    Many,

    I don’t feel knowledgeable enough yet to suggest solutions; I’m still tying to wrap my mind around the complexities of local economic development. It does seem that many of the things that would have made sense to do earlier are now much harder or impossible, such as setting aside land within the town limits for a light industrial park that would provide facilities for biotech or pharmaceutical research or software development. All the land that might have been used for that purpose is now covered with housing. And the few commercial areas that we have, such as Ephesus-Fordham, will soon be turned into still more housing, further exacerbating our fiscal challenges.

    If our current situation is unsatisfactory, then I suppose we should try doing the opposite of whatever policies and choices got us into this predicament. I think that the approach Sanibel, FL has taken to development since the mid 70s offers a model that may be worth emulating, though Chapel Hill and Sanibel are not directly comparable.

    I also will admit to being a bit conservative when it comes to land-use policy; too much change too quickly unsettles me, and I have no interest in seeing the charming college town in which I grew up turn into an exclusive country club for affluent transplants. We have enough of such places in North Carolina already.

  26. many

     /  June 10, 2014

    @David

    Thank you. I do want to point you to UNC’s north campus on Airport road as a source for hope. I think it has the potential (far from being realized) of public-private partnerships in the area of medical R&D, Law & Policy, Software etc. This could feed the occupancy of commercial development.

    As well, there are very real commercial opportunities for the sort of development yous suggest in Orange County along Highway 70, in the Eno EDD and I think if the seven mile creek area were developed there would be significant interest. Development is already happening in the Buckhorn EDD and on the cusp of happening in Efland.

    Fortunately at least the county has options beside OWASA. Mebane for Buckhorn EDD and Effland and Durham for the Eno EDD. I suspect Chatham/Pittsboro might be willing to extend water & sewer to the southern part of the county (Mt Carmel Church and 15-501) for Obey Creek as well.

    As for me, I am more concerned with achieving a happy medium between the carrying capacity of the land and property rights. I have seen too many instances where a faction of homeowners assert control another s right to develop within the ordinance.

  27. David

     /  June 11, 2014

    @Many

    I agree that zoning is not the best way to achieve conservation and environmental stewardship goals, both for the reason you mention (i.e., small factions inappropriately restricting others’ free exercise of property rights) and because protection based on zoning is always insecure. A new group of decision-makers can come into office and change the ordinance such that land that was meant to be maintained at low density in perpetuity gets rezoned for high density development, as we’re seeing with Obey Creek. How long will it be before East-West Partners and Bryan Properties begin aggressively lobbying to rezone the rural buffer for high density housing? Perhaps we’ll hear arguments about Chapel Hill’s need to expand in order to compete with Chatham Park. Irrevocable conservation easements or direct land acquisition (i.e., Triangle Land Conservancy’s approach) seems a more reliable, but more expensive strategy.

  28. many

     /  June 11, 2014

    @David. That is why I mentioned the carrying capacity of the land in question. In my opinion two things need to happen:

    1) Land use (supposedly with carrying capacity considerations) and zoning must match so that people who purchase land and neighbors can plan with a some certainty

    2) Chapel hill needs to decide and articulate what it wants to be when it grows up. If the decision is greater density that has significant infrastructure costs and you can’t just sweep them under the rug as has happened in the past in Ephesus-Fordham. I was greatly disturbed to hear Roger Perry seem to do just that in his recent interview on WCHL. If Chapel hill wants to maintain the Status-Quo then say so for goodness sake, but clearly articulate what the puts and takes are. I am pretty sure that if Chapel Hill does not want to do it, larger and larger parts of Orange County will be gobbled up by Durham, Mebane and now Pittsboro/Chatham Park. Chapel Hill will have less and less influence on what happens and on the integrity of their surroundings.

  29. James Barrett

     /  June 12, 2014

    “Many”, I’d also add that folks can’t say they are environmentalists first if their decisions to “protect” land in CH causes all those other areas to be damaged. Every decision has to be viewed in the broad perspective.

  30. many

     /  June 12, 2014

    @James, agreed. the “affected bys” need to be considered. in the decisions.

    This includes both the negative effects to development and the negative effects of policy impedance deploying critical infrastructure, which is why I criticize the decision made by OWASA in concert with the politicos. It is also why I think the festering stormwater problems in Ephesus-Fordham need to be resolved before development is permitted.

    The “affected bys” of physical development are far better understood than the “affected bys” of the logical policy decisions.

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