Trying to find an apartment in Chapel Hill affordable to your typical Chapel Hill worker 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