Excluding Inclusionary Zoning?

Since when did affordable housing mean homes for people who earn 100% of Nancy Oatesthe Area Median Income?

Chapel Hill passed the Inclusioinary Zoning Ordinance in 2010 that 15% of all new for-sale housing units built must be affordable to people earning no more than 80% or 65% of the AMI (the affordable units split evenly between 80% and 65%). Only one development has started construction since the law took effect — Ramsley, off Eubanks Road — and the former council granted an exemption, allowing the affordable units to be 100% of AMI without checking with the Community Home Trust first.

A second project has been approved but not yet built: The Courtyards at Homestead. That developer agreed to nearly $1 million payment-in-lieu for a 64-home subdivision. Compare that to Carolina Square, a $123 million project that will pay only $250,000 as payment-in-lieu.

Now comes the Merin Road Community, 61 single-family detached houses with 9 affordable townhomes. The former council did not object to Capkov’s proposal that it, too, be exempt from the 80/65 rule and price the affordable homes at 100% AMI instead. But, again, council didn’t check with CHT, which as a 501C(3) has a limit to the number of homes it can sell above the 80% level.

Here’s how Inclusionary Zoning works: CHT negotiates with the developer how much it will pay to buy the unit. Once CHT finds a buyer, a double-closing takes place. CHT buys the unit at the negotiated price, then sells it to the homeowner at the 80% or 65% level. CHT has to have the cash to make up the difference between its purchase price and sales price. That money comes from grants or private donations.

The rules governing the nonprofit allow up to 35% of the homes to be purchased above the 80% level. So only 3 of the 9 townhomes at Merin Road could be bought at the 100% level.

All of us make sacrifices for the privilege of living or working in Chapel Hill, in the form of high property taxes or, for those who can’t afford to live here, long commutes to serve our town. Developers, too, make a good living through their projects in Chapel Hill, where people are willing to pay more for homes, to the developers’ benefit. If Inclusionary Zoning truly doesn’t work, we need to rework the ordinance. But until then, a sacrifice developers can make would be to obey the law.
– Nancy Oates

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  1. Terri

     /  December 28, 2015

    What was the staff recommendation on the projects that do not meet the regulation? Did the former council act in response to a staff recommendation or did they act on their own?

  2. George C

     /  December 28, 2015

    As there is an active Special Use Permit application for this project (with a public hearing scheduled on Jan. 20th) it seems inappropriate for a Council member to be publicly discussing it at this time, especially in a manner which seems to indicate that you have already made up your mind on one or more issues before hearing the evidence to be presented.

    Happy New Year.

  3. plurimus

     /  December 28, 2015

    George C, The way I read it Nancy is simply informing the public of how the inclusionary zoning ordinance works. The ordinance is the ordinance, no “issue” or “mind to make up”. Nothing to hide.

    What Nancy is suggesting is that the town council get out of its power and control mind set and instruct staff to work outside of the silos it has built. Reach out to CHT as a stakeholder and implement the appropriate parts of the ordinance in the spirit of its intent

    What a concept, eh?

    …and yes George C, I agree it is going to be a very happy new year…

  4. Terri

     /  December 28, 2015

    The median income in Chapel Hill for 2014 was $62,620. According to Zillow, at that income, someone could afford a house priced at $286,028 (almost $100,000 below the median housing cost for 2014 which was $379,900). If someone earning the median income, can’t afford a house at the median price, I think the problem is bigger than whether inclusionary zoning is being strictly adhered to.

  5. George C

     /  December 29, 2015

    I have no problem with Nancy questioning whether the inclusionary zoning ordinance is working well or not or in giving some examples where she thinks it didn’t. I do think she shouldn’t bring into the conversation a project on which she will be voting later this year since elected officials are supposed to go into the public hearings with an open mind. At the very least mentioning an ongoing application in such context could give the appearance of partiality.

  6. Nancy

     /  December 29, 2015

    George, do you recall whether the Ramsley recommendation came from staff, advisory boards or council? I’ll be back in town in time for the Jan. 6 work session. Perhaps we can both get there a few minutes early and you can explain to me what you believe I’ve made up my mind about.

  7. George C

     /  December 29, 2015

    Hi Nancy,
    I did not say that you’ve made up your mind on that particular issue. What I was trying to say was that referring to an active application in the same discussion about the failures of our inclusionary zoning ordinance could give the impression that you have already staked out a position on what might be proposed in that application prior to the public hearing.

    Hope you’re getting some good R & R prior to the start of our busy year.

  8. plurimus

     /  December 29, 2015

    George C. Glad there is at least tacit acknowledgement that mistakes were made, even if those mistakes were just errors in communication. What it appears Nancy is trying to do (do not want to put words in her mouth) is get the plain facts out and in the open. Rather than just letting a known problem fester, building lines of communication not only with the public but with a broader coalition of stakeholders .

    What astounds is that no one attempted to tighten up the flaws in inclusionary zoning while at the same time passing project after project. As Terri observes the problem is bigger than just adherence to the ordinance, many see that “one size fits all” does not work. Paralysis by analysis can be an issue, but there are strategies and tactics to allow for tackling the big issues then gradual improvement using a feedback loop. To me that is how you progressively solve problems.

    Perhaps in the end the problem is intractable however having the ordinance on the books and not applying it evenly or involving the stakeholders seems insidious.

  9. anon

     /  January 1, 2016

    Kudos to Nancy.

    she never said she made up her mind.

    George C – informing citizens of what’s going on is more democratizing than making people show up at a council meeting. Maybe Nancy can show the council how to have a more democratic process. And maybe someone can propose getting rid of inclusionary zoning if no developer ever follows the same “rules” twice. If something is not followed EVERY time it is not a rule