Do-good discount

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  1. . . . and if the Town makes good on its commitment to better enforce nuisance ordinances in the Northside neighborhood, including issuing fines to the owners of properties that are in violation, Neal may find that the discounts he offers end up saving him money in the long run.

  2. plurimus

     /  May 23, 2016

    Nancy,

    I do not understand why the town tried to address affordable or workforce housing in a vacuum. The problem is beyond a single party solution.

    According to US News 47% of UNC’s 29,136 students live off campus. That is 13,694 students competing for housing in Chapel Hill. This puts enormous market distortion on both affordable and workforce housing. http://colleges.usnews.rankingsandreviews.com/best-colleges/unc-2974/student-life

    I believe that most would say it is not up to the taxpayers to subsidize UNC student housing and that building more affordable housing in isolation will accomplish only that.

    Any solution has to have significant and unified participation and support from both UNC and the town as well as landlords and developers. While admirable, isolated community based solutions, amount to a drop in the bucket when you look at the problem as a whole. Time for every interested party to come together and resolve this issue top down rather than the single party piecemeal attempts that together do not amount to anything but slowly increasing tension.

  3. Nancy

     /  May 23, 2016

    Plurimus, I agree with you wholeheartedly. If UNC were to require sophomores to live on campus, as well as freshmen, or would renovate some of the existing dorms into the apartment-style that students seek off campus, that would help. Someone in a decision-making capacity at UNC needs to be put in charge of working with town leadership to come up with solutions.

  4. plurimus

     /  May 23, 2016

    UNC also needs to address the housing for married students. Last i checked it was really pathetic. Another issue is parking (or lack thereof) which drives students with cars to live off campus.

  5. rucker

     /  May 23, 2016

    Nancy/plurimus, haven’t your heard? Supply and demand market forces don’t work in Chapel Hill. At least that’s what I’ve read on this blog and elsewhere new housing is opposed.

  6. plurimus

     /  May 23, 2016

    rucker, exactly. Supply and demand does not work in Chapel Hill because of an artificial distortion brought on by a large number of students. This is precisely why developers can comfortably target the upper end renters while leaving the middle and lower market to be publicly funded.

    I know that was your point, eh?

  7. rucker

     /  May 24, 2016

    plurimus, you just described the Econ 101 definition of a supply and demand situation. A University and its students are a demand driver. What makes it “artificial”? Every location has demand drivers that are unique to its location. Banking is big demand driver in Charlotte. State government in Raleigh. Tech companies in Durham. Demand, whatever the source, puts upward pressure on prices.

    On the other side, you have supply, which for many years has been heavily restricted in Chapel Hill. If a student renter in a house in Northside moves to a newly constructed building for the next school year, then the increase in supply has reduced the demand for that home in Northside, putting downward pressure on the price. It doesn’t matter whether that student moves into a new housing unit on campus built by the University or a high-end apartment built by a private developer. Either way, they have chosen to live somewhere other than Northside and reduced the demand for that house.

    If you repeat this process a few thousand times, then you will start to see some movement in prices on the older housing stock, just like you see in Raleigh and Durham where supply has not been as constrained as it has in Chapel Hill and Carrboro.

    For what it’s worth, I applaud Todd’s effort to better the community. And who knows, maybe that $50 discount will be enough to make it affordable to a new family as opposed to a more civic minded student. But as you said, that is a drop in the bucket, just like requiring a handful of affordable units in any new private development (which, by the way, restricts supply by making it harder to make the math work on a new building). To really tackle the problem, Chapel Hill needs a lot of new housing, whatever the source.

  8. Nancy

     /  May 24, 2016

    Rucker, if the demand is for housing that modestly paid people and students can afford, but the supply is for high-rent places they can’t afford, that does nothing to increase our supply of affordable housing. At the WCHL debate, Aaron Nelson tweeted an article from a big-city newspaper that claimed adding more luxury apartments makes rents affordable all over town, but that doesn’t work in reality. What happens is an influx of expensive apartments raises the floor for local housing. In Chapel Hill, a local landlord said he would raise his rents $100 a month because the influx of high-rent places made his units seem affordable by comparison, even with the rent hike. Manhattan has added tens of thousands of units since I left, but I would not be able to afford the rents now, because the influx of luxury apartments to serve a wealthy demographic has raised the rents across all 5 boroughs. Maybe that’s a higher-level course than Econ 101, but it’s how the world works. A newspaper article touting more luxury apartments gives no comfort to the student on a budget now having to pay more for rent because of the increased supply of high-rent units.

  9. rucker

     /  May 24, 2016

    Nancy, I would love to learn the secret of this Chapel Hill landlord. I too am a landlord of a townhouse near downtown where I used to live and have a very different experience. I moved out in 2011 and have rented it since. The year that Shortbread Lofts was completed, I had to cut my rent by $300/month just to get it filled. It has gone back up a bit since then while no new projects have been completed, but it still rents for less than it did before Shortbread was built.

    To counter your New York example, allow me to let a Nobel Prize winning economist known for his progressive views speak for me.

    http://www.nytimes.com/2015/11/30/opinion/inequality-and-the-city.html?_r=0

    I think Dr. Krugman’s economic pedigree is superior to either of ours, and yet he says that the high rent in New York is absolutely a supply and demand issue that can be lessened by easing development restrictions. New York has a rent problem because it is full of people making enormous incomes (high demand) and development restrictions and lack of land limiting new housing units (low supply). It is the same problem as Chapel Hill on a larger and more difficult to solve scale, but both are clear matters of demand outpacing supply.

    I simply fail to accept that housing, and particularly housing in Chapel Hill, is the one market immune to the most basic of economic principals. That requires a suspension of disbelief of epic proportions.

  10. plurimus

     /  May 24, 2016

    Oh snap rucker,

    You never got past ECON 101, did you? You ask “What makes it “artificial”?” How about temporary residents that are living small intentionally so they can go to school? How about when much of that population is competing in particular for the least expensive housing? How about developers and planners using this market distortion to build high end rather than serve the part of the market that is truly underserved? What part of landlords discovering that renting by the bedroom was more profitable don’t you understand?

    WHY should local residents be saddled with that artificially distorted housing market?

    I too “applaud Todd’s effort to better the community”, however my point is that all of the small efforts including UNC’s “northside loan programme” are small drops in a giant ocean of neglect on the part of the university, the state and the previous city governments.

    We do agree that Chapel Hill needs to address the issue, but UNC needs to address the fact that it is by FAR the largest contributor to the economic distortion.

    Misattributing Paul Krugman’s diatribe about New York City to the problem in Chapel Hill is just silly. Imagine Dr. Krugman’s diatribe if the population of Manhattan almost doubled for the school year and the less advantaged were being forced out by students. Imagine his diatribe if NYC didn’t have rent stabilization (control).

    By the way, there is a lot of conflicting data and the great “urbanization” trend may not live up to its hype; http://www.pewtrusts.org/en/research-and-analysis/blogs/stateline/2015/4/15/returning-to-the-exurb-rural-counties-are-fastest-growing As more and more of the millennial settle down a bit and start families and options such as work from anywhere (mobility) and goods on demand people are looking for much more than overpopulated urban areas, they are looking for community.

  11. rucker

     /  May 25, 2016

    plurimus, Chapel Hill is not the only college town in America. Many of them don’t suffer the same affordability issues because they haven’t restricted supply through onerous land use policy in past decades. Chapel Hill did its inter city visit to Athens, GA about a year and a half ago. Their University student population relative to their town population is nearly identical to Chapel Hill/Carrboro, yet they don’t have affordability issues. Their Town officials bragged about the speed and simplicity of their development approval process. They have gotten the type of development they wanted, because they said what they wanted and then made it easy. So they have had a consistent supply of new housing built over time.

    New construction never has and probably never will be the primary source of affordable housing, in Chapel Hill or anywhere else. Construction from 10 or 20 years ago supplies the affordable housing while the new development keeps higher income people out of the older development by offering something nicer that they are willing and able to pay for. But Chapel Hill has made it very difficult to build for decades, and our chickens have come home to roost.

    The first step in solving a problem is properly identifying the source. Throwing up our hands and saying its the University’s fault and they need to fix it isn’t going to solve the problem. Certainly an everything under the sun approach will help solve it quicker, but the only way to fix the problem going forward is to allow supply to keep up with demand. That will take time to correct, but its the only viable long-term solution. If we cling to the false notion that our problems are unique and unsolvable except by others, then we will never move our community forward.

    I only shared the Krugman column in response to Nancy’s reference to New York. Chapel Hill is obviously a very different place with a very different set of circumstances, but the fundamental underlying problem of supply not meeting demand is the root of both challenges. Fortunately, it should be much easier to fix in Chapel Hill than in New York.

  12. Joe Blow

     /  May 25, 2016

    plurimus: Your understanding of economics is pretty poor. The time that the students spend in town is irrelevant. Whether developers build luxury housing or not is irrelevant. What IS relevant is the supply of housing is artificially limited (and I assume, will be even more so if Nancy gets her way), which is what drives the price up.

    This idea that the no-development people have that building “luxury” units doesn’t impact the entire market is wrong. rucker’s example is exactly why this idea that “luxury” vs “affordable” housing is irrelevant.

    The market determines what is “luxury” or “affordable”, not the quality of the kitchen. That’s why housing prices are wildly different in different parts of the country.

    Forcing developers to build fewer units than they would otherwise is part of the artificial market distortion, and is what’s causing prices to continually climb.

  13. plurimus

     /  May 25, 2016

    rucker

    If you compare Athens Ga to Chapel Hill/Carrboro the most outstanding difference is sprawl. In 2002 Athens GA was ranked 19th in the nation for urban sprawl, Atlanta sprawl reached the borders of Barrow County a decade ago.

    Now you might argue as some have that the rural buffer/urban services boundary is an artificial constraint on the housing market and you would be right, but that was/is a conscious choice by the voters. Not benign neglect by the government.

    Joe Blow. We mostly agree. But look how many units are in the pipeline now. You still have not addressed the fact that housing stock at the low end is contracting because of competition and conversions. The contraction is also accelerated by the market in because developers make much more profit from high end units. Simply building more has created a price updraft that could continue until the market is over supplied. I do not think anyone relishes a housing market collapse.

    To me, given the fact of the rural buffer (which is part of Chapel Hill Carrboros uniqueness), and the relative magnitude of the student impact there is a clear case for attenuating the housing market and amplifying the need for infrastructure including connected greenways. The problem is not only housing, there is also a fairly clear case for more office/industrial/research/lab space to attract workplaces so people do not have to commute.

    Trying to solve the problems building more expensive apartments is overly simplistic and a recipe for disaster as is letting the university offload its student housing responsibilities on the town and transitively the taxpayers..

  14. rucker

     /  May 25, 2016

    plurimus, no question the urban services growth boundary is one policy choice that impedes development. But if preventing sprawl is a community value, then there are plenty of other levers that could be pulled to streamline more dense development within the boundary to promote affordability. We also have large vegetative buffer requirements, strict limits on impervious surface, restrictive height limitations, low floor-to-area ratios, unelected advisory boards that can cause costly design changes because they don’t like a color or material. The list goes on and on, not to mention the lengthy, expensive and arbitrary approval process.

    To borrow from and take a little liberty with a Joe Biden quote, don’t tell me your values. Show me your development regulations and I’ll tell you your values. Chapel Hill values environmental protection and a small town look and feel over inclusivity and affordability. That’s not necessarily “wrong” but it is the decision we have made for many years. If our values have changed, let’s change our policies. Otherwise let’s quit the charade that affordability is at or near the top of our priority list.

    Or we can just blame everything on students and impotently scream at UNC to fix it………

  15. plurimus

     /  May 25, 2016

    rucker,

    I disagree with the statement that “Chapel Hill values environmental protection and a small town look and feel over inclusivity and affordability.” I think that Chapel Hill values all of those things, with the exception of the most recent administrations development policies over common sense infrastructure and planning.

    Chapel Hill values inclusivity greatly and an has an economically diverse population (albeit shrinking). This balance is what makes Chapel Hill Carrboro desirable and unique.

    One of the major things complicating that balance is the sizable transitory student population that lives off campus relative to the overall resident population.

    There are several drivers, one is the dismal conditions of much of the student housing; possibly due to state level budget cuts (however, I only can only point to their 2.989 billion dollar endowment in wonderment).

    Another is the fact that UNC does not restrict off campus living as many colleges do.

    Lack of campus parking drive student with cars off campus.

    The towns recent passivity toward developers and lack of unified growth linked with infrastructure development makes development harder to visualize and accept.

    The eagerness of developers that provide easy short term solutions that compromise the towns vision long term, and the towns fiscal problems also contribute greatly.

    These problems are all solvable, but this is one of those situations where bottom up solutions are not sufficient. This will take a top down collaborative effort between the town, the university, developers and the state.

  16. Rucker, what is the address of your rental?

  17. David27599

     /  May 26, 2016

    Plurimus- To your points:
    1. Yes, students are transitory however there is a permanent bolus of students. Transitory is immaterial in the supply/demand discussion as the demand is permanent.
    2. State budget cuts have no direct bearing on UNC Housing. By law, state funds cannot be used for that expense. On-campus housing is paid by student “rent”. Could the University use other “non-state” funds for housing–very probable but the University would prefer to invest in infrastructure that attracts money, i.e. research.
    3. First year students are required to live on-campus so there is some restriction.
    4. Lack of parking – I agree; although I think this is a minor driver of the problems. One possible solution is to expand the lots on Estes Drive (Carolina North seems to be going nowhere slowly) and allow ALL students to park there. This will not solve the issue but is a low-cost idea to try.
    5. If developers are compromising the town’s long-term vision, it’s our fault. They are following the Land Use Ordinance that we (the Town) wrote.

    Overall, I agree with you that the lack of a unified vision and action plan is an issue. I have no idea who the “champion” should be to lead.

    Finally, let me throw out an alternative view–why is the University responsible for housing at all ? Seems to be against the spirit of the law that bars the University from “competing” with the private sector.

  18. rucker

     /  May 26, 2016

    CitizenWill, thanks but I’ll pass. I know how public records work and I’ve seen how those with dissenting opinions are occasionally treated around here. I’ll remain shrouded in mystery. You’ll just have to take my word on it.

    plurimus, I think we have probably reached the point of impasse, but if I understand you properly, here is your approach to affordability in Chapel Hill/Carrboro:

    1) Don’t change any of the regulations that make Chapel Hill/Carrboro by far the most difficult and expensive place to build residential property in the state. Lowering costs and bringing down barriers to new housing is an overly simplistic view of the problem and not a viable part of the solution.

    2) Wait on the Towns, University, State and developers to collaborate on a solution that doesn’t use taxpayer money.

    Let me know how that goes…….

  19. plurimus

     /  May 26, 2016

    rucker, allow me to rephrase:

    1) Don’t change any of the regulations that make Chapel Hill/Carrboro a nice place to live. In fact increase infrastructure regulations on those that seek to overbuild high end apartments and exploit the economic anomaly caused by the universities lack of responsibility. Conversely reduce regulations for small office/light industrial manufacturing, R&D and Lab space in an attempt to diversify the tax base.

    2) Encourage the Towns, University, State and developers to collaborate on a solution that is equitable for the taxpayer.

    There, that’s better…….

  20. rucker

     /  May 27, 2016

    plurimus, I accept your confirmation of my interpretation of your preferred policies and softening of tone to describe them. Here’s what those policy prescriptions translate to in action:

    1) Double down on limiting the supply of housing while at the same time encouraging job growth, adding further demand for housing. (Sidebar: I totally agree with relaxing regulation on commercial space too, I just happen to think you should do it on both commercial and residential).

    2) Make ourselves feel better about pricing out our modest income workers by “encouraging” others to solve the problem without allowing any tools to do so.

    The fact of the matter is that these policies reflect a value system that places environmental protection, preventing change and limiting traffic above being an inclusive and affordable community. In a world of climate change and urbanization, that’s not necessarily wrong or evil. But, it provides little hope to our teachers and police officers who might want to live here instead of Durham or Chatham Counties.

    Our previous Mayor and defeated Council Members understood this reality and had a different set of value priorities. Last year’s electorate sent them packing for it. Unfortunately, the rhetoric of the campaign framed the different values of these incumbents as corruption and give-aways to developers as opposed to trying something different from what obviously hasn’t been working. I suspect the campaign slogan, “Mark Kleinschmidt: He thinks we should accept a little extra traffic and some taller buildings to make our community more affordable and our tax base more sustainable.” would have been less successful than accusing him of nefarious intentions, though.

  21. plurimus

     /  May 27, 2016

    Rucker

    1) I am not convinced the hair on fire housing crisis you describe really exists. There are +5K apartments in the pipeline. Let’s just see what the impact is.

    2) What is most harmful is the market distortion caused by UNC students competing in one particular market stratum multiplied by the conversion of low cost units to high.

    The fact of the matter is that a value system that places environmental protection, preventing change and limiting traffic along with being an inclusive and affordable community creates a desirable place to live and settle. A community unique in that it is not specifically designed for the transient or commoditized. I not only agree that it is not wrong or evil, quite the contrary I celebrate it.

    I think that there are other solutions for workforce housing than the wholesale permitting of apartments.

    Our previous Mayor and defeated Council Members misunderstood these realities and had a different set of value priorities.

    Fortunately, the campaign revealed (albeit late) the different “value priorities” of these incumbents were too aligned with the interests of developers, secret backroom deals and weak explanations of campaign finance irregularities.

    I believe the new council is trying something different from what obviously hadn’t been working.

    Knowing what I know now I suspect the campaign slogan, “Mark Kleinschmidt: He thinks we should accept more development brought about via secret dealings. He thinks taking money from developers and not reporting until after the election is OK. He thinks developers have our best interests at heart and we don’t need to listen.” would have been accurate.

    “…..to make our community more affordable and our tax base more sustainable.” would have required more attention to commercial (no, not just retail) and not sacrificing the long term benefits of prime commercial on the altar of short term developer profits.

    No accusations. The above are just facts..

  22. rucker

     /  May 27, 2016

    plurimus, I’ve enjoyed the back and forth, but I’ll be getting on with my holiday weekend after this post. Feel free to get the last word in.

    Facts:
    Glen Lennox – 7 year public process, largely commercial approved

    Obey Creek – 6 year public process, ultimately required to be 50% or more commercial and 2/3 of the land given to the Town as a public park

    Ephesus Fordham – 3 or 4 year public process. Of the 4 projects brought forward so far, 3 are purely commercial and one is apartments with commercial

    Carolina Square – 3 year public process, largely commercial

    Central West – 2 year citizen committee driven process without any actual approvals or rezoning as a result

    Charterwood – 2 year public process followed by a multi-year lawsuit, largely commercial

    Where is the “wholesale permitting of apartments”, “alignment with developers”, or “secret backroom dealings” in that? I assume the secret backroom dealing you refer to is the closed session and decision to not purchase the American Legion property for $10 million. I don’t know if that should have been more public, but the previous Council had a deadline for a decision before the end of the year, and I for one am relieved they didn’t throw that much taxpayer money at a land acquisition. And they didn’t give any approval, implicit or otherwise, to the developer or the project being proposed.

    If the timelines and processes for the projects approved by the last Council are a give-away to developers (not only taking years, but each extracting many public benefits paid for by the developers), I shudder to speculate on what you would consider a fair and equitable process. Should everything take a decade or more to approve, and only then if it is guaranteed that developers can make no profit?

    Of the several thousand “approved” apartments you reference (I think the number is closer to 3,000 if you max everything out in residential over the next 50 years, but who’s counting), only a couple have actually begun, and none are yet completed. They were all approved under the current development regulations with additional developer concessions required, and it remains to be seen how many are actually viable and will be built. It has been multiple years since most of them were approved, and yet only a few have actually begun.

    So we are left with the speculation that perfectly legal (if poorly reported) campaign donations = malicious corruption. Pretty shaky ground when you look at what the last Council actually did, as opposed to the accusations that have been made.

    Happy Memorial Day to all!

  23. plurimus

     /  May 27, 2016

    rucker, I will agree to disagree. Kleinschmidt played fast and loose with development, got caught and lost. Good riddance.

    I know you know there are no guarantees of profit and leave you with this parting thought;

    One has to wonder if the development environment in Chapel Hill is so awful, why the developers keep coming back?

    Cheers to Memorial Day, and I hope everyone takes just a few moments to remember what the day means.

  24. Rucker, you claim you are a “landlord of a townhouse near downtown” who had to drop his rents $300/month when Shortbread Lofts was completed. Given that the renters in Shortbread are predominantly students, that meant you supposedly had your student renters flee.

    In any case, without further proof of your claim, I chose to disbelieve it.

    As far as your fantastic claims – which echo the Chamber’s Nelson – of how long or difficult it takes to get approvals:

    1) “Obey Creek – 6 year public process”. Just WRONG.

    2) “Ephesus Fordham – 3 or 4 year public process.”

    Also wrong on several counts. The idea of using form-based code was introduced and promoted by the Town during CH2020.

    CH2020 was only “public” in a PR sense of the word. Lots of the public input was ignored, unreported, left on the ground or twisted to adapt to an already crafted narrative. CH2020 set a terrible precedent for creating the appearance of public consent for policies that were at odds with what many of the participants asked for.

    E/F sprung out of a staff and, apparently (hard to say because of the lack of former CHTC transparency) CHTC plan to streamline development. There was no grassroots cry for loosening all the threads of zoning protections.

    3) “Central West – 2 year citizen committee driven process”

    Now, this claim just has to be outright trolling on your part, right Rucker?

    Without rehashing all the sorry history of the Central West initiative, the genesis harkens back to discussions within the Town’s Visioning Task Force and CH2020. Town staff and consultants created a “plan” and “vision” then tried to sell it to residents. Only after push back did the CHTC come up with a “public” process.

    Of course, the deck was completely stacked against the public, public input was omitted or twisted to fit a narrative, for all the work this committee did – at the end it was a behind the scenes plan created by Parker & Ryan that “won” the day.

    Two funny asides: the consultant, even at the end of the project, couldn’t be bothered to learn the names of streets and neighborhoods they wanted to build hotels along; Jim Ward famously said that the residents from the 23 neighborhoods expressing concerns constituted a “special interest”.

    I though Central West was the worst demonstration of “public” participation until Obeys Creek and Ephesus/Fordham – both which doubled-down on rewarding developers and the expense of residents.

    4) “Carolina Square – 3 year public process, largely commercial”. Also wrong on several points. While the plan was gestating for awhile at UNC Foundation, it was unrolled in several pieces.

    I do appreciate the outreach but Cousins made it clear this was their project to run. Notably, they rejected adding affordable office or commercial space, contributing part of the parcel to be used as public space, committing to specific goals in terms of overall affordability. Cousins also rejected a strong call to make the project conform more closely to West End’s human scale design.

    Rucker, a lot of what you say sounds just like what the Chamber’s Aaron Nelson and Kristen Smith reel off – is there a talking points memo sent out that you are reading from or have you just watched their dog-n-pony a zillion times?

  25. DOM

     /  May 29, 2016

    CitizenWill
    “I though Central West was the worst demonstration of “public” participation until Obeys Creek and Ephesus/Fordham – both which doubled-down on rewarding developers and the expense of residents.”

    In what way were developers rewarded at the expense of residents in the Central West process?

  26. Deborah Fulghieri

     /  May 31, 2016

    Rucker is stating as “fact” that Obey Creek development agreement negotiations took 6 years (from 2009 to 2015). That includes every moment from the initiation of foreclosure proceedings, ownership change, Chapel Hill 2020’s 15-501 South plan of 2012, and the 2015 change of zoning from low density residential to the hyper-dense, hyper-impermeable plan approved by council in June, 2015.

    The Obey Creek changeover indeed required time to change the previous negotiated plans– the 1992 Small Area Plan, and the 2012 Chapel Hill 2020 Comprehensive Plan, which included a specific section on 15-501 South. I don’t know why it took more than a minute, since a majority of mayorandcouncil declared they would vote for it well in advance of seeing the development agreement (Palmer, Bell, Cianciolo and Kleinschmidt).

  27. DOM

     /  June 1, 2016

    No response, CitizenWill? Still waiting.