The other 1 percent

“Lies and misinformation,” Mayor Mark Kleinschmidt responded to a DogwoodNancy Oates Acres resident who questioned whether and how much Obey Creek would cost taxpayers.

I have heard what could be called lies and misinformation during the Obey Creek Development Agreement process, and it has come from the development team. A case in point: Affordable housing.

Obey Creek developers claim that their proposal designates 5% of the rental units as affordable, an embarrassingly low amount, given that Obey Creek is within walking distance of the town’s two largest employers of low-wage workers: the university and hospital. Across the country, towns similar to Chapel Hill are getting as much as 25% to 35% affordable housing from new developments.

And Obey Creek’s 5% shrinks to 1% when you calculate the affordable housing based on square footage. The most recent iteration of the development agreement available to the public is missing some key information to figure out exactly how much affordable housing the project would yield. But by filling in the blanks with common sense assumptions, here’s what I come up with. Please let me know if you spot any flaws in my logic or arithmetic.

With the stated maximum of 800 units, 5% would be 40 affordable units, but the Development Agreement does not specify what constitutes affordable. For my definition, only the units that accept government subsidy (Section 8 or Veterans Vouchers) or are rented at below-market rate should be considered affordable housing. The market rate micro-units are just that: tiny apartments rented at full market rate. The developer sacrifices nothing to provide those market-rate units.

The Development Agreement does not specify maximum square footage for residential, only a minimum of 250 units or 290,000-330,000 sft. The average of that square footage is 310,000 sft. Dividing that up into 250 units yields an average unit of 1,240 sft. To get the maximum sft, multiply 1,240 x 800 units for 992,000 sft of residential.

The agreement says the micro-units will be studios at 450 sft, 1-bedrooms at 500 sft and 2-bedrooms at 750 sft, but doesn’t say how many of each. So I assigned 20 of the units as studios, 10 as 1-bedrooms and 10 as 2-bedrooms. Multiply that out for a total of 21,500 sft of what the developer considers affordable housing. Do the math: 21,500/992,000 = 2.167% affordable housing.

The agreement says that the developer will accept vouchers only for half of the 40 units designated affordable. Remember the developer is getting full market rate for the micro-units. So, divide 2.167% in half and you get 1.08%.

For a density bonus as large as the town is poised to give the Obey Creek developers — in 1992, Town Council designated that land as low-density residential in exchange for boosting the density on the other side of the highway to create Southern Village — 1% of affordable housing is a ridiculously small concession on the part of the developers. Rumor has swirled that the developers may squeeze in 40 townhouses, which would be subject to the town’s Inclusionary Zoning Ordinance. That should not be considered a concession by the developers. That’s simply obeying the law.
– Nancy Oates

Lessons from Hulu founder

Even as Tropical Storm Ana showered Commencement festivities at regular intervals Nancy OatesSunday morning at Kenan Stadium, I would not have wanted to be anywhere else. Not only because of the joy of witnessing my daughter graduate, but because of the speech given by Carolina alumnus Jason Kilar, founder of Hulu.

On the surface, Kilar looks like the Golden Boy, the man with the magic touch. But he talked about some of the lowest points in his life, personally and professionally, when success seemed regularly left out of his lunchbox. He talked about the early days of Hulu, how those in the know, those already firmly ensconced in success, derided him for pursuing his ideas. Experts in his field called his Hulu team “ClownCo,” and a highly regarded website set up a digital counter to track how long it would take Hulu to fail.

But Kilar had the insight to know that anything that bucks convention will seem like a threat to the establishment. So he persevered, and “Hulu ended up working out,” he said.

“If you think the world is broken in a certain way and you have a great new idea to fix it, do yourself a favor and pursue your convictions, relentlessly,” he told the graduates. “The path I describe will be an uncertain one. But don’t let the fear of uncertainty, of not having all the answers, be the thing that holds you back.”

It gave me hope to hear the next generation of leaders being challenged to pursue new ideas, even in the face of derision, scorn and apathy from others.

I applied Kilar’s words to the context of community members sharing concerns and ideas on how to fix them with elected officials and town staff whose response has ranged from ignoring the electorate to scolding community members for speaking up.

I thought of the tremendous effort the community put into educating Town Council members and town staff on infrastructure and fiscal viability for Central West, Ephesus-Fordham and The Edge. Council and staff blew off the electorate in all three matters.

I thought of the listening sessions Roger Stancil held, and I’m waiting to see whether Stancil will come back with ideas on how to fix the problems community members identified. And I thought of a serious flaw in a town process I pointed out to town staff in the past week, and how the initial response from staff has been to brush it aside.

Community members repeatedly have presented new ideas, viewpoints, tools and solutions, and have been mocked by council members and town staff. Even the spouse of one council member refers to people who disagree with her philosophy as “the other side.”

Kilar’s speech inspired me as much as I hope it did the graduates. Maybe some of them will join us as we troop up to the lectern at public hearings to try to fix the ways our town is broken.

Read Kilar’s speech here:
– Nancy Oates

Smart shoppers

As a value shopper, I perked up my ears at economist David Shreve’s message Nancy Oatesthat we should choose new development projects because we want what they will bring to the town, not because we mistakenly think they will bring in additional revenue.

Shreve, president of Advocates for a Sustainable Albemarle Population and a former professor of economic policy at the University of Virginia, spoke at the library last week in a lecture sponsored by the community advocacy group Chapel Hill Alliance for a Livable Town (CHALT). He lives in the Albemarle County town in Virginia of Charlottesville, a college town about the same size as Chapel Hill that shares many similarities to us. As a member of Albemarle County’s Economic Development Authority, he pays close attention to development issues and has been involved in a major study of the costs of growth.

The study revealed that the only types of land use that bring in more tax revenue than a municipality spends in services are office/retail, light industrial and agriculture, and that assumes that those uses do not increase population. Often businesses relocating to a new town will bring their own people to fill the higher-paying jobs and sometimes have to recruit from surrounding towns to fill their lower-paying positions.

When it comes to residential development, the high-rise, high-rent apartment buildings that Dwight Bassett and Chamber of Commerce representatives believe to be revenue positive actually cost almost twice as much in services for every dollar brought in from property taxes.

The Charlottesville study calculated a break-even point of what a home would have to cost in order to generate enough tax revenue to pay for the services it needs: $668,671. Shreve said Chapel Hill’s break-even point likely would be similar.

Shreve’s numbers show what the technical team hired during the Glen Lennox approval process already presented to Town Council, and what economists, urban planners and the Wake County manager all know to be true: We can’t grow ourselves out of debt.

Every town has an optimal population, and Shreve encouraged Chapel Hill leaders to figure out what that number is and build that optimal size into the town’s planning process.

Because Charlottesville is surrounded by mountains, it has had to plan its growth thoughtfully. It doesn’t have the luxury of sending its citizens to the next town over to shop or shoving its low-wage workers out to commute from another county to find housing. It pays attention to what each development costs in terms of tax dollars and natural resources. All cities depend on places that aren’t cities to get their clean water, clean air and food. Shreve advocated for placing the economy in the natural world, not the other way around.

When it comes to new development, our elected officials need to remember that we are the customers. It’s up to developers to offer us products that meet our needs. Otherwise, we’re not buying.

To view the presentation, go to:
– Nancy Oates

What our leaders hear

I give Roger Stancil a lot of credit for holding “listening sessions.” Over Nancy Oatesthe past few months, Stancil, along with town ombudsman Jim Huegerich and Rae Buckley, the town’s organizational effectiveness coordinator, has been meeting with various special-interest groups to learn what the community thinks is going well with town operations and what could be improved. As town manager, Stancil is ultimately responsible for whether town staff delivers.

It must have been difficult for Stancil to hear, as was the case in the session I attended, of breakdowns between the capable staff’s talents and the delivery of final products. To his credit, not once in the 90-minute meeting did Stancil make excuses or berate any of us for sharing our concerns.

That’s certainly more impulse control than at least one council member has demonstrated. At the April 20 Town Council meeting, a community member asked that a concept plan for retirement apartments be rescheduled because the town erred by publicizing the wrong address, making it appear that the discussion was about Carol Woods, and neighboring property owners weren’t notified. Maria Palmer railed against the unsuspecting community member for more than 4 minutes, sometimes jabbing the air for emphasis. (Watch the video on the town website. The community member begins speaking at the 3:46 minute mark. Palmer lights in about 12 minutes later.)

But back to Stancil and his staff. Let me reiterate that all of us who came to the April 24 meeting at the library lauded town staff for their competency to do their jobs well and engage courteously with the community. Everyone from front-line workers of garbage collectors and emergency responders to those relegated to offices seemed to take their work seriously and treat the public with respect. The disconnect our group focused on was staff not providing council with the information the elected officials need to make decisions that stand the stress-test of time.

Countless times Matt Czajkowski, in particular, asked for data on a project, but when the issue came back to council for a vote, staff didn’t have the information. Mark Kleinschmidt should have postponed voting until staff provided the information. I don’t recall that he ever did. Instead, council members would vote without the information they needed to make a well-thought-out decision. In business parlance, that’s known as “Garbage in, garbage out.”

Over the past eight years, Stancil has made some excellent hires and promoted talent that had languished unnoticed in middle-management. He has put a framework in place for excellence. But somewhere along the line, staff have been derailed from delivering the data and analyses council needs. Whether that’s due to spending time on less important administrative tasks, or from a directive that all staff work has to dovetail with a pre-conceived outcome, that’s for Stancil to figure out. We’re glad he’s listening.
– Nancy Oates

Wasteful spending

No one wants their legacy to be trash, Maria Palmer told her colleagues at Nancy Oatesthe April 8 Town Council meeting. Yet the time, effort and budget commitment for upgrading the solid waste convenience centers in Orange County and mandated curbside recycling lead voters to think otherwise.

At the Assembly of Governments meeting on March 26, then at the Town Council meeting two weeks later, our elected officials talked trash, or at least how much to pay for county-wide recycling pickup and renovations to convenience centers where many folks deposit their recyclables and trash. After eight months, the solid waste workgroup decided to levy a single, flat fee for convenience centers and curbside recycling everywhere in the county. No one discussed whether the upgrades were efficient, cost-effective or necessary. And in my mind, the plans strike out on all three counts.

The county estimates $8 million a year for county-wide curbside recycling pickup and top-of-the-line upgrades to one convenience center. Most of the money — $6.2 million — would come from the new fees each homeowner would pay, with the remaining $1.8 million coming from property tax revenue. Multifamily housing, including low-income residents of trailer parks and apartment complexes, would be hit especially hard as their fees double from $51 per unit to $103.

The plans include spending $2 million to $3 million to gentrify the Eubanks Road convenience center when officials could repave it, add compactors and expand its operating hours for a fraction of the cost, maybe $300,000 to $500,000 tops. Simpler centers are less expensive to operate and would make it possible to eliminate the subsidy from property taxes. That $1.8 million could be redirected to schools or other pressing priorities.

Service flexibility remains an issue. For townies and suburban neighborhoods in the ETJ, curbside pickup sounds like a convenience worth the price. But consider homes in the county that may be off the road down a three-quarter-mile long gravel drive, requiring 3 miles on foot every trash day to drag those big blue roll carts out to the street and back. It would be much easier to toss the recyclables in the trunk of the car and drive 5 miles or so to the nearest convenience center. County homeowners have been asking for an opt-out provision in the curbside program for years, but the commissioners haven’t listened.

Spending taxpayer dollars on upscale convenience centers and valet recycling service is completely out of whack when we look at the long list of school repairs, some of which have been put off for years

Please let county commissioners know you believe their priorities need to be reshuffled. Send an email to the commissioners,, or stop by the commissioners’ meeting at 7 p.m. on Tuesday, April 21, at the Southern Human Services Center, behind the Seymour Center off Homestead Road.
– Nancy Oates

Who we want to be

Everybody lives somewhere, Lisa Sturtevant of the National Housing Conference in Washington, D.C., Nancy Oatesreminded the audience at Chapel Hill’s Affordable Housing Seminar on April 9. The seminar was the final in a series of four excellent sessions in which nationally recognized experts shared their insights into challenges and solutions to creating and preserving housing for a wide spectrum of income levels.

Aside from the fact that housing touches everyone in a community, Sturtevant listed several reasons why we should care about the dwindling supply of affordable housing in Chapel Hill. Income hasn’t kept pace with rising housing prices, and strict lending practices are pricing the middle class out of home ownership, which excludes them from the most important method of accumulating wealth.

The more people pay for housing, the less they have to spend on dining out, going to the movies or buying nonessentials. That means less spending to support local businesses, which limits economic development.

A town without housing for people who work there has difficulty attracting new businesses. A healthy town needs housing for people of all income levels.

Plan for the community you want to be, Sturtevant urged. She advised giving incentives for building or preserving both low- and middle-income housing. Preserve existing affordable units, she said. Building new affordable units is counterproductive if it wipes out existing affordable housing.

Some of those incentives include tax abatements and density bonuses. Studies show that inclusionary zoning does not dampen production or raise rents or home prices, she said. (Still, Dwight Bassett, in wrapping up the series, espoused that he believes it does.) Form-based code can work if its streamlined development costs are linked to affordable housing. Arlington, Va., a town that shares many similarities with Chapel Hill, has achieved national recognition for its affordable housing accomplishments. Developers can choose to build using the form-based code and reap its benefits, or they can forgo form-based code if they don’t want to abide by its strictures.

The form-based code in Columbia Pike, Md., has an expectation that 20-35 percent of new units built be affordable to people making 40-80 percent of the Area Median Income.

The town flew in Wyman Winston of the Community Development Finance Authority in Madison, Wis., in for a couple of days to tour proposed developments and speak at the seminar. His points converged with those of Sturtevant’s, that towns should view affordable housing as infrastructure. First responders, for instance, need to be able to live in the town where they work. He warned that proposed tax code changes could eviscerate all federal housing help. However, a National Housing Trust Fund, available to disburse next year, gives states a percentage of Fannie Mae and Freddie Mac loans to be used for affordable housing. But Gov. McCrory has yet to appoint a representative to apply for the funds.

Town Council has the chance to emend the form-based code in Ephesus-Fordham. But rather than increase affordable housing options, the staff’s proposed changes give even more perks to developers without any community benefit in return. Planning staff have not taken to heart the good advice of national experts. Will council?
— Nancy Oates

Skip this ad

With the UNC men’s basketball playing the Sweet 16 game of the NCAA Nancy Oatestournament at the same time as the Assembly of Governments meeting on March 26, ours may not have been the only household fighting over who would get the TV. If you were disappointed in the outcome of the game, boost your spirits by watching the last 12 minutes of the AOG meeting to see a true winning performance by council member Jim Ward.

The last topic taken up by officials from county and towns was an update on Ephesus-Fordham. County commissioners have taken a wait-and-see position on whether to let Chapel Hill keep some of the county’s portion of the tax revenue expected from new development in E-F.

Mayor Mark Kleinschmidt spoke first, and he seemed to be in full campaign mode, giving a chipper oration on two buildings proposed for E-F that are “100% retail” (a drugstore renovation and a small restaurant to replace one that has been razed). When he’d finished his infomercial, Commissioner Renee Price asked for Chapel Hill’s definition of affordable housing.

Instead of answering “60-80% or 80-120% of AMI,” the mayor launched into a campaign speech that referred to criticism from those who believe council could do better in E-F as “death panel arguments.”

Price tried to tell the mayor she just wanted the income level, but Kleinschmidt cut her off and started his speech all over again. When finally the mayor had spent himself, Lee Storrow, leaned over and whispered something to Price, presumably the numbers she had asked for.

Ward, however, “bristled,” he said at Kleinschmidt’s “advertisement of what a good job we’re doing” when council actually “gave away the bank” by giving developers a huge density bonus without pressing for affordable housing in return. Ward, along with Ed Harrison and Matt Czajkowski, voted against E-F’s form-based code mainly because it had no affordable housing.

The campaign season has started early, with Storrow and Donna Bell already announcing they will run for re-election this year, and Maria Palmer declaring she will run again in 2017. That means we’ll hear many attempts by incumbents to rewrite history. Some council members talk a good game of wanting affordable housing and commercial development (to ease the residential property tax burden), but the projects they’ve approved have been apartments with no firm commitment to affordable housing. The few commercial projects approved will add low-wage jobs that will increase our need for affordable housing all the more.

Ward has made no official announcement of a re-election campaign, but clearly voters need him to speak up like this routinely to add a dose of reality to the hype.

Several days later, Palmer emailed commissioners her own rambling commercial that contained several misstatements. But then, her attention during the meeting may have been diverted by social media updates on the basketball game. When commissioners chair Earl McKee asked whether anyone else had any questions before the meeting ended, Palmer blurted out, “I’m so sad that Chapel Hill lost.”

To see for yourself, go to and click on the last agenda item.
– Nancy Oates

“Them” and who else?

Apparently, I’ve become one of “them.” Nancy Oates

At the reception the town hosted thanking Matt Czajkowski for more than seven years of public service before his final council meeting, Michael Parker caught up to George Cianciolo, who was heading into council chambers, and asked, “Who picked up the tab for all of this? The town? Or them?”

Scanning the crowd, I saw council members and citizens grateful for Czajkowski’s leadership. Presumably, Parker’s “them” referred to the latter, a cohort of which I’m an unabashed member.

You might be asking yourself, “Who’s Michael Parker, and why should I care what he thinks?” Those who know Parker, and some who don’t, expect him to run for a seat on council in the fall. I’m sure during his campaign he will try to present himself to the public as someone different from the wag who made that divisive remark. But that comment has colored my perception of him indelibly

Town politics is more polarized than I’ve ever experienced in the nearly 20 years I’ve lived in Chapel Hill. We’re reverting to the days when council votes were unanimous. Council meetings were short back then, rarely going beyond a couple hours, because everyone on council thought alike and perhaps had made up their minds on how to vote as soon as they read through the agenda.

When Matt Czajkowski joined council, he asked questions to determine exactly what was in the best interest of his constituents. He knew about finances, negotiations and business, and what questions to ask to get the data on which to base decisions. He was a strategic thinker who examined possible unintended consequences.

Developers got nervous. They brought slick, marketing-based presentations with them when they applied for rezonings and special use permits. They packed council chambers with an intimidating array of lawyers and investors and local consultants to sway council members. They contributed heavily to some council members’ re-election campaigns. They tried all sorts of tricks: hiring the law firm where a council member’s husband worked so as to force her to recuse herself from votes; subdividing land on major developments to make it impossible for adjacent property owners to file a protest petition.

Some council members began to take differences of opinions personally. They spoke disrespectfully to colleagues they disagreed with, and some closed their minds to ideas and concerns voiced by colleagues they deemed as belonging in the “them” camp.

One of the points the mayor made in his proclamation of gratitude for Czajkowski referenced Czajkowski questioning conventional wisdom, “And what could be more Chapel Hillian than that?” the mayor said.

We need council members who can talk with and listen to their colleagues and constituents. We don’t need someone who shows such disrespect for residents who question conventional thought as they advocate for the best interests of the community.
– Nancy Oates

You’re invited!

Matt Czajkowski’s last council meeting will be Monday night, March 23. The Nancy OatesTown Council will host a goodbye party for him at Town Hall a half-hour before the meeting begins, and you are invited. The party starts at 6:30 in the ante-chamber outside the auditorium where council meets. At 7 p.m., Mayor Mark Kleinschmidt will read a proclamation of appreciation for Czajkowski’s nearly eight years of service on council.

Eight years – that’s a lot of PowerPoint presentations and reams of reports in the innocuously named “blue folder” at each council member’s place at every meeting. Eight years encompasses hour upon hour of listening to citizen comments, not to mention the thousands of emails from concerned constituents who did not speak at council meetings. And then there’s the commitment of being a liaison for various committees and numerous public appearances for ground-breakings and parades.

Czajkowski brought to bear on our small-town problems his Harvard MBA, his corporate CFO experience and his ability to see past the immediate decision and shed light on unintended consequences. While some council members naively accepted developers’ proposals at face value (“We can’t possibly afford to contribute to affordable housing,” council heard over and over from men in expensive suits being paid hundreds of dollars an hour), Czajkowski went snout-to-snout with the big dogs. And while he was often the lone voice calling in the wilderness, he gave hope to his constituents, many of whom could see where the trajectory of decisions the majority bloc on council was taking us.

Unaffiliated with any political party, Czajkowski was unique in that he drew supporters from across the spectrum, from developers and financiers to rabble-rousers and flaming liberals. He listened to us all, weighed what we had to say, and asked questions to dig for the hard data.

We would not have been able to afford Czajkowski if we had hired him as a consultant. How lucky we are that he generously gave his time to try to make Chapel Hill a more livable town. Now he and his wife, Jill, are off to Rwanda to make a difference in the lives of communities in that impoverished country.
Please take a few minutes to stop by on Monday evening to thank Czajkowski for all he has done for the town.

Here’s another invitation: Check out a new website that shows via charts and graphics what to expect from the Obey Creek development proposal. Visit: The next opportunity for public comment on Obey Creek is at a special Town Council meeting on Wednesday, March 25, at 7 p.m. in Town Hall.
– Nancy Oates

Saving grace

On a recent Friday, Mayor Mark Kleinschmidt tweeted that UNC was poised to Nancy Oatesmake a Big Announcement about Northside, leaving us on tenterhooks all weekend. On Monday, the mayor and UNC Chancellor Carol Folt, along with some neighborhood and nonprofit dignitaries, took the stage and said UNC would lend $3 million interest-free for 10 years to “save” Northside, as newspaper accounts touted it. And the town plans to chip in $200,000 initially from its affordable housing fund. (Future allocations will be reviewed annually by Town Council.)

Essentially, the public relations fallout from Folt’s decision not to defend UNC’s Center for Poverty, Work and Opportunity against the Board of Governors shuttering it and another social justice center and an environmental center may have nudged the chancellor to publicly commit some big money to fend off slumlords in Northside.

Admittedly, Folt’s job would have been on the line had she challenged the BOG’s claim that it had the authority to close the centers, so who can blame her? We all know how hard it is for people over 50 to find jobs. Just ask UNC System President Tom Ross. So Folt redirected media attention by committing financial resources to help move forward a plan that Northside neighbors have been working on for three years.

In recent years, predatory investors have bought up properties in Northside from longtime residents ready to cash out or who have died and their heirs have no use for the property. Because town staff do not enforce the ordinance that no more than four unrelated people can share a residential unit, unscrupulous landlords have rented out houses to large groups of students and raked in cash without always maintaining the property to livable standards. Their tenants are kids who put up with the indignities, knowing the housing is only temporary.

At this point, more than half the homes in the historically black working-class community are investor-owned.

Three years ago, the Jackson Center, a community center in Northside, organized a Compass Group to figure out how to reverse the trend. One tool was to ask Self-Help, a nonprofit lender, to establish a land bank by buying properties at the lowest price possible and redistributing them at cost to developers of affordable housing. For instance, Self-Help set up a land bank in partnership with Duke University and found a landlord in Walltown, a low-income neighborhood near Duke, who was willing to sell 30 properties at $5,000 each, which the land bank resold to an affordable housing developer.

The success of the land bank hinges on property owners selling to the land bank at an affordable price, even if investors offer more. And it would restore my faith in humanity if that were to happen. At the same time, the concept makes me uneasy. For most of us, our home is our biggest asset. Is it fair to ask people of modest means to forgo market-rate profits in an attempt to fend off slumlords and developments like the 10-story student apartment building proposed for the lot where Breadman’s is now?

No word on whether any contract has been signed. UNC referred me to Self-Help, who referred me to the Jackson Center, who, I learned from an interview by a colleague, is referring questions back to Self-Help.
– Nancy Oates