Conflicting Priorities

Bonnie Hauser, founder of Orange County Voice, shares her insight into factors that affect housing affordability:

Last month the N.C. General Assembly (NCGA) took away Orange County’s authority to collect impact fees on new home construction. It was a low blow by Raleigh politicians but brings new insights into the important topic of affordability.

Thirty years ago, Orange County was authorized to collect impact fees to help fund new school construction. Over 30 years, Orange County collected about $45 million, or $1.5 million a year. The fees were used to help pay loans to build new schools like Northside Elementary.

Last year, the county commissioners started planning a new impact fee structure. They created new, lower fees for small luxury apartments and other units that likely wouldn’t have school-age children, and increased fees for 3-bedroom or larger apartments and houses. Under the new structure, impact fees would have added up to $9,000 to the price of a new home in the Orange County school district; $18,000 for a new home in the Chapel Hill-Carrboro school district.

The fee was based on the size of a home not its price or location. Impact fees are waived for low-income housing such as homes built by Habitat for Humanity.

An outraged developer complained about the new fees to an NCGA member from another county, and the politics started. Now the fees are gone, and new homes could be a little more affordable especially for working families. After all, impact fees are passed through to buyers and renters and are in addition to land, permitting and building costs.

But these fees are a small part of the affordability picture in Orange County. There are high taxes and fees for Cadillac services that many of us don’t need or will never use. Better public transportation would help for people who cannot afford cars. Then there are taxes.

Over the next few years, the county expects to increase taxes significantly in order to pay for the school bonds ($120 million) that voters approved last year. This has nothing to do with impact fees or the NCGA.

According to the county’s financial advisers, under the current planning assumptions, county taxes could increase by 7.5 points to pay for the bonds. That’s nearly 10% added to the county’s tax rate of 83.77 points. Since the schools need a lot more than $120 million (the original estimate was $330 million), it’s only the beginning. It’s neither affordable nor sustainable, and no one is talking about it.

I doubt that the NCGA cares about affordability in Orange County — but we do. It might help if we all paid more attention to how services, taxes and fees affect working families, seniors and others who are struggling to make ends meet.

For more information on county impact fees, see:

— Bonnie Hauser

Light Rail at Our Own Risk

Alex Cabanes, the founder of, has done in-depth analysis of the proposed Durham-Orange Light Rail Transit project and has explored its implications and transit alternatives. He shares his insight into the latest plot twist of the DOLRT saga.

The Federal Transit Administration (FTA) approved moving the 17.7-mile light-rail project into the engineering phase — kind-of. In its letter to GoTriangle’s general manager Jeff Mann, the FTA included the qualification in bold: “Please note that the President’s Budget for FY 2018 proposes no funding for new projects, and thus GoTriangle acknowledges that it is undertaking the additional work at its own risk which may not receive Capital Investment Grants (Federal) funding.”

The funding decision for Durham-Orange Light Rail will be made in 2020. At that time, GoTriangle will learn whether or not the project could receive 50 percent of the project’s funding from the federal government. Maybe the FTA is hinting politely that funding prospects don’t look good, but GoTriangle (and county commissioners) are missing the hint?

The qualified approval came with a project score of “medium,” another red flag. For the FTA, “medium” is like a “C.” It’s the lowest acceptable rating for projects that compete for federal funding. Today all the projects in the FTA’s engineering queue are rated as “high” or “medium-high.” It’s unclear what will be in the queue in 2020 — if there’s a queue at all. The FTA’s letter continues:

“The pre-award authority does not constitute any FTA commitment that future Federal funds will be approved for the Project or for any element of the Project.”

This engineering phase is estimated to cost $70 million, which is in addition to the $30 million that has already been spent. That means $100 million of local taxpayer monies is being placed at risk. GoTriangle approved the $70 million engineering contract this spring, prior to hearing from FTA.

The entire project is estimated to cost $2.476 billion, plus nearly $900 million in interest through 2062 that is not covered by federal funding. The FTA letter fixes federal funding at a maximum of $1. 238 billion, if the project is approved in 2020.

Despite cautions from the FTA, GoTriangle and local leaders celebrated the news. The local press helped by reporting press releases instead of the facts. In the meantime, it’s clear that GoTriangle is proceeding at the risk of Orange and Durham taxpayers, even though the prospects for future funding look dim.

The GoTriangle team will decide this week how to proceed — though it launched the $70 million engineering contract months ago. So once again, the public process is off the rails.

Here’s the FTA’s letter. What do you think?

Managua, N.C.?

Recently a homeowner requested, through his lawyer and architect, permission from the Historic District Commission to build a combination iron and chain-link fence around his large acreage, ostensibly to keep the deer out of his garden. The commissioners, familiar with the challenge of planting anything that deer would not eat, were sympathetic while trying to stay within the Historic District Guidelines that discourage hiding houses behind tall fences. Instead of the 6-foot-tall black iron fence along the front of the property and heavy metal gates across both driveways, commissioners suggested fencing in only the backyard.

That prompted the homeowner to address the commissioners directly, saying that he needed the front yard fenced and driveways gated because passersby ignored his “No Trespassing” signs and walked down his driveway to gaze at the house. He did not want to come out one day and find someone standing on his porch, he said.

As if this were Nicaragua in the 1980s.

I spent some time in Nicaragua with a friend who was covering the events unfolding in that uneasy time. Over the course of the decades-long Somoza regime — known for its political corruption, government support for corporations over citizens, and order maintained by a strong military — the rich got richer and the poor got poorer. Even what I would consider suburban homes were hidden behind thick adobe walls, taller than me, because the haves lived in fear of the many, many have-nots.

After my stay in Managua, I returned to my apartment in New York that, granted, had iron bars over the windows, but still, I was very appreciative to be able to walk outside, a woman alone, something I could not do in Nicaragua.

Too many times this year some news alert about the U.S. president and Congress dismantling the laws that help us stay a civil society has made me think: This is how it begins, that life of fear that incites those afraid of losing their elevated status to take away the freedoms and quality of life of those whose work keeps the economy functioning.

The U.S. backed the Somoza dynasty because it seemed like a good idea at the time to create a regulatory environment attractive to multinational corporations. When the Sandinistas came to power around 1980 and tried to restore some economic equity and civil rights and clean up the damage done from overbuilding and corporate stripping of natural resources, the U.S., leery that the Sandinistas’ FSLN party seemed too allied with communism, backed the Contras trying to snatch power from the FSLN.

(Congress changed its mind in the mid-1980s, but President Reagan disagreed and set up a way to support the Contras illegally by using money from the sale of arms to Iran, the infamous Iran-Contra Affair.)

I have heard tales of ultra-rich Americans today building bunkers and buying land in New Zealand to escape to when society in the U.S. breaks down completely.

Iron gates to keep the curious away from the wealthy in Chapel Hill likely is not a harbinger of doom. But are those gates necessary? Why live as though they are?
— Nancy Oates

High-Rent District

I sat on the stoop of my 1940 Cape Cod and surveyed the view — one-bedroom brick-ranch duplexes and frumpy 1930s bungalows, SUVs spilling off gravel driveways onto lawns of hard-packed red clay tufted with weeds — and thought, “Wow, I’ve made it. I now live in the high-rent section of town.”

According to a report on the Rent Café blog, ZIP code 27516 is one of the top 5 priciest places to rent in North Carolina. The area comprises a large swath west of N.C. 86 (MLK Jr. Boulevard and South Columbia Street).

Yes, that area includes the $3,300-a-month three-bedrooms in Carolina Square and the $1,200-a-month 477-square-foot studio in Southern Village. But the vast majority of rentals are the aging small houses leased to students who want to be within walking distance of campus. The going rate for those houses ranges from $1.35 to $2.15 a square foot.

UNC Kenan-Flagler Business School professor Michael Jacobs wrote an editorial, published in the July 12 edition of The N&O, essentially blaming high housing costs on the rural buffer and the town’s lengthy approval process for new construction (which has not stopped the builders of more than 6,000 residential units in recent years).

Jacobs left out two important factors that interact to produce a negative feedback loop that drives up real estate prices, according to a local economic policy analyst: the monopoly nature of land that allows for owners to extract unearned rents without doing anything productive and the emergence of a financial system that prefers financing housing/land purchases to most any type of productive investment.

To put that in practical terms, a landlord who rents houses close to campus told me some years back that Shortbread Lofts was the best thing that had happened to his business. He was able to raise all of his rents by $100 a month without making any improvements because even at that rate, his properties looked affordable compared to luxury apartment competitors.

From a policy perspective, we on Town Council could do more to promote affordable housing. We could encourage UNC to provide more apartment-style housing on campus, which would reduce the demand from students to move off-campus. We could adhere to the town’s Inclusionary Zoning Ordinance, which would increase the supply of for-sale affordable housing and take some pressure off rentals. We could ditch the use of form-based code unless it includes a sizable chunk of affordable units. We could prioritize approving commercial projects and put luxury apartment proposals on the back burner. Perhaps we could do more to enforce the “no more than four” ordinance.

What we can’t do is temper greed. Landlords know the town can’t interfere with rents and we can’t do much to enforce the “no more than four” law, and they know that student tenants are often naïve and vulnerable to being taken advantage of. No amount of building in the rural buffer or expediting development approval will change the behavior of a landlord whose only concern is how much profit he or she can squeeze out of tenants.
— Nancy Oates

A Blast on the Fourth

I would like to say that my choice of where to live has been motivated by work and family, but you could make a case that fireworks factored in.

Fourth of July is my favorite holiday. From the time I was a kid, I woke up every July 4 knowing it was going to be a great day. Finding something red, white and blue to wear in the parade to march to the kiddie fair in the neighborhood park; deciding whether it was worth standing in line for what felt like half a day but was probably half an hour for a pony ride (it always was worth the wait); selecting a flavor of sno-cone, the only time of year they were served.

And at night, coming back to the park with parents and a blanket to lie on the grass and watch the fireworks that were directly overhead. Even getting a hot ash in my eye one year didn’t take away from the thrill of the noise, the colors and the distinctive smell.

Then I moved to New York, where Macy’s must have poured half its annual profits into fireworks. Set off from barges spread over a few miles in the East River, the fireworks could be seen from all five boroughs.

And now Chapel Hill. Travel & Leisure Magazine has ranked Chapel Hill the 10th best place in the country for fireworks. Some 30,000 people squeezed together on metal benches in Kenan Stadium on a sultry Tuesday night to watch the display. This year was particularly good and included some new kinds of zingy, fizzly things that zipped and crackled through the air. And you felt the noise as much as you heard it.

Our fun comes at no small cost, though. This year’s budget for the event was $58,120. That includes paying the pyrotechnic vendor and the band, renting the stadium and stage, laying a protective cover on the artificial turf, and hiring EMS to be at the ready.

One year during the recent recession, the town manager’s budget eliminated the fireworks display. Then-council member Matt Czajkowski took up the cause and got the celebration reinstated, so we have not missed a one.

A word of thanks, too, for the town employees who worked the event — the police officers and firefighters who not only sweltered in their gear but had to pay attention to our safety rather than looking up at the fireworks.

The event does not charge an admission fee, but donations are gladly accepted. THis year, event-goers donated nearly $21,000. If you did not have any cash on hand to toss in the barrel at the entrance gates on July 4, you still can contribute. The Friends of Chapel Hill Parks, Recreation & Greenways welcomes your tax-deductible donation, either online at or via check payable to Friends of Chapel Hill Parks, Recreation & Greenways and mailed to: Friends of Chapel Hill Parks, Recreation & Greenways, c/o Department of Parks & Recreation, 200 Plant Road, Chapel Hill, N.C. 27514.

I’m already looking forward to next year.
— Nancy Oates

I know a guy …

With the new travel ban in effect, the U.S. has moved a step closer to the elitist mentality that Donald Trump admires. As of last Thursday night, if you come from one of six Muslim-majority countries — Iran, Libya, Somalia, Sudan, Syria and Yemen — your ability to visit the Land of the Free depends on whom you know.

Travel Ban 2.0, the nepotism version, requires that visitors and refugees alike must have “a close family member” vouch for them. Really close. Forget having an uncle in the business. Uncles and aunts, cousins, grandparents and in-laws aren’t good enough. If you are, say, a refugee fleeing a despotic regime, you must stay put unless your parents, spouse or child already live in the U.S. and are willing to take responsibility for you.

Combined with Trump’s clean environment ban and his health care ban — no affordable coverage to the aged, the poor, the sick or the 30% of income tax filers who don’t hold a conventional full-time job with benefits — the travel ban rounds out a set of amenities for the wealthy and well-connected.

What does this have to do with Chapel Hill, other than that on the whole we skew toward the privileged? The national and state leadership serves as a warning to us on the local level to hold ourselves to a higher standard. I see disquieting signs that we’re slipping.

Over the past few years, I’ve watched the emergence of what I call Tea Party Democrats, people so rigidly progressive that if you show any flexibility you are treated as if you are a scourge on the party. Chapel Hillians who value a clean environment and green building or want to protect those who can least afford it from being flooded out are labeled as anti-growth and called disparaging names. If you want to expand affordable bus service to those who commute to low-wage jobs, or if you want to preserve some debt capacity for benefiting rural residents, you are castigated for getting in the way of perks for the well-to-do.

In Chapel Hill, Democrats make up the majority party, and I’m uneasy when local elected Democrats adopt the vindictiveness that characterizes the majority administration at the state and national level. We are a small enough town that we can revert to the days when local elected officials made decisions in the best interest of the entire town, including those of all races, religions, income levels and political persuasions.

In so doing, we can create a functioning town where you don’t have to know somebody to get in.
— Nancy Oates

Better planning for affordability

Last year, when Orange County commissioners proposed a $5 million bond to be used for affordable housing, I pushed for a plan. The county commissioners instead offered a slogan — 1,065 homes for $5 million — that was so unlikely to be achieved that it didn’t rise to the level of a goal.

Trying to squeeze more than 1,000 units out of $5 million amounts to less than $5,000 per unit. As is true with so many things, the real story is found in the fine print. Orange County hoped to combine that $5 million with more than $7 million from the affordable housing funds collected by Chapel Hill and Carrboro over five years and reduced the number of units added to the housing stock to 613. (The remaining 400-plus would be homes to be repaired or “non-construction” units, whatever that means.)

Forget that Chapel Hill, at least, already has commitments for spending its Penny for Housing and HOME grants. The slogan sounded good enough that voters approved it in the November 2016 election.

This month, the county commissioners allocated the first half of the bond money. Based on recommendations from the Orange County Affordable Housing Coalition, the commissioners gave $915,334 to Habitat for Humanity to build 24 townhomes in Waterstone for low-income seniors; $1,373,366 to CASA for 28 apartments along Merritt Mill Road that straddle Chapel Hill and Carrboro, geared toward the disabled and homeless; and $211,300 to EmPowerment to buy and renovate a house in Northside.

All three of these organizations have documented decades of success, and these particular projects are to be lauded.

The fact remains that the county has spent half of the bond money for 53 homes. Using the 613-unit goal, that leaves $2.5 million for the remaining 560 units, or $4,600 per unit.
Achieving that will require a plan. At least start with an honest assessment of what taxpayers can expect.

Fortunately, the Chapel Hill town staff have stepped up to help. Chapel Hill has begun to list the projects it wants to complete and what each will cost. Chapel Hill’s plan includes a schedule for implementing each action step. The town manager has consulted with the key affordable housing organizations — the three above, plus Community Home Trust.

Commendable as those agencies are, we risk missing out on some new ideas by tapping the same four agencies we have for years. Widening the circle to bring in some builders who have completed workforce housing would be a worthwhile addition, as would thinking about who we need to incentivize to stay in town, and hearing from people who live in low-cost housing at present so we know what or target market wants.

The $5 million bond won’t cover all we need it to do. But with a plan, we can better leverage taxpayers’ investment.
— Nancy Oates

Fitting in our dreams

Chapel Hillians tend to go big or go home, and that proved true in feedback we got after Town Council authorized buying the American Legion property.

When we asked residents how to use the 36-acre parcel (only about 23 acres of which are developable, due to topography, stream buffers and resource conservation regulations), we received ideas that would fill up three times that space, easily.

Town Council designated a task force to pre-screen some of those concepts. I am one of the task force members representing Town Council, as is Donna Bell and Pam Hemminger. Other members speak for the community, business interests, the Visitors’ Bureau, the school system, cultural arts, and parks and greenways.

After a kick-off daylong charette on April 8 during which residents dropped by and shared their thoughts or stayed longer and drew them on a map, we held four two-hour meetings. We heard a couple presentations by groups that wanted to use a significant portion of the land for their organizations, and we received updated priorities from the town’s Parks & Greenways Commission.

The town hired Dan Jewell, a consultant who has shepherded developers’ projects through the town process for years, to write a report to council on our work. Jewell and his staff facilitated the charette, codified the ideas on various maps and helped us block out square footage of some of the proposals so we could get a sense of where they might go and what space would be leftover.

We saw just how small that 36-acre lot is.

Everyone on the task force, including the business representative, understood the value of having a community gathering space. Over the course of our meetings, we came up with some guiding principals on how to use the land. We will present those at the council’s final meeting of the fiscal year, on June 26. Dan Jewell will bring the list of suggestions that arose from the charette and the maps that he drew to show where those uses might fit.

We have time to decide. Even if we pay off the mortgage early, we can’t do anything with the land other than mow its grass for the next two years because we promised the American Legion use of the building through March 2019. That gives us time to gather more ideas and evaluate proposals as Ephesus-Church springs up nearby and the land’s market value increases. We have the money to make the remaining two mortgage payments, but the majority on council signaled a desire to sell off a slice of the land to recoup the investment. That would reduce our options all the more.

Fortunately, a Town Council task force evaluating town-owned land has been meeting since the beginning of the year. That group will present its report to council on June 26 as well. Perhaps some of the ideas we heard for the American Legion property would fit better on another town-owned parcel.

If the two groups pool our information, we will be better able to see where we are and where we want to go.
— Nancy Oates

Paying our bills, and extras

You can craft a budget by starting with the money you expect to have in the coming year and determining how to spend it. Or you can envision the lifestyle you want and figure out how to afford it.

Chapel Hill’s budget for Fiscal Year 2018, which starts July 1 of this year, does a little of both.

One way or another, all of the money we have to spend comes from taxpayers, through property taxes and sales taxes; fees, such as for stormwater management and solid waste; a parking rate increase; and bonds that voters have approved. Visitors pay a hotel occupancy tax to the county, which divvies it up with the town.

Although the town’s recommended tax rate has gone down this year, most of us will pay a higher tax bill because the county increased the value of our residences. Commercial property values have risen even more steeply and are passed along to businesses renting space in commercial venues, so the pressure is on for local business owners to increase their sales.

This year, town employee health insurance costs increased by 12%. The town’s Employee Wellness Program keeps the premiums from going even higher. The budget puts money aside to pay for health-care coverage and pensions we promised to retired town employees, the much-discussed OPEB (Other Post-Employment Benefits) liability.

At council’s request, the town manager has included a 2% increase in the amount of funding for human services agencies. The nonprofits the town contributes to provide services that not only improve the quality of life for our most economically fragile residents but also divert residents from unaffordable situations — for instance, offering in-home support services so seniors can age in their own homes, rather than pay for an expensive assisted living facility.

The manager also shifted funds to boost the affordable housing pot to more than $1 million.

The budget includes money to replace worn-out buses with more fuel-efficient models and to rent an electric bus as a mini pilot program. The manager has designated funds to pay for a rewrite of the Land Use Management Ordinance to address the high-density development we face today.

A problematic cost comes in the manager’s recommendation of a 2.5% pay raise across the board, which increases the wealth gap by greatly benefiting those at the top end of the pay scale and minimally benefiting those at the lower end. More than 50 job categories pay between $100,000 and $200,000. I have advocated that those employees receive a $1,000 bonus instead of a percentage increase.

Council members who support an across-the-board percentage increase say that higher-paid workers will feel disrespected if they get a lower proportional pay hike and may leave. From my observation of private-sector businesses, money won’t keep a restless employee in his job. He’ll take the pay increase and keep looking for a more interesting, challenging position.

Perhaps that’s a good thing. Don’t we want to make room for employees who are excited about the work they do, rather than feel shackled by golden handcuffs?

We have many projects to invest in that would benefit town residents and visitors of all income levels. We don’t need to divert funds to feed systemic inequality.
— Nancy Oates

Building community

When the Habitat for Humanity staffer asked, “Who’s not afraid of heights?” I raised my hand. I should have thought it through.

But at 8:30 Saturday morning, with the temperatures still in the 70s and standing in the shade of a large, leafy tree, I didn’t pay attention to the fact that the unroofed part of the house was on the unshaded side.

A message had gone out on our neighborhood listserv offering an opportunity to volunteer on a Habitat build, and the only thing that gave me pause was the early start time. I signed up anyway and did my best. In hindsight, I could have saved a little time by not putting on mascara. Given that it was a bright and beautiful day, I never took off my sunglasses. And even if I had, I would have sweated off any makeup after about 20 minutes on the roof.

After going over work site safety rules and checking our shoes for traction, the Habitat supervisor sent us up on the scaffolding and helped us hoist 4-foot by 8-foot sheets of OSB — that’s oriented strand board, sheathed in a mylar-like substance to reflect heat, and quite heavy, from my perspective. Once we laid it in place, all we had to do was hammer it to the rafters.

I should point out that for the past 20 years, I’ve done no physical labor more strenuous than mowing the lawn. Gone are the days when I toted 50 pounds’ worth of toddlers and gear up and down the subway stairs in Manhattan. And it turns out that decades of typing does very little to preserve upper body strength. Still, the construction supervisor issued me a nail apron and a hammer. I was relieved nobody kept track of my speed or the number of nails I bent.

The temperature heated up as the morning wore on, and Habitat staff encouraged us to take frequent water breaks in the shade. I thought my hammering technique improved over time, but I couldn’t help but notice every time I returned from a water break that a tremendous amount of work had been done in my absence.

Overall, I had a wonderful time and learned a lot of really useful stuff. Next time a hurricane hits town, my neighborhood team will be ready to re-roof as needed.

Orange County Habitat for Humanity has work sessions every Wednesday, Friday and Saturday. Go to to sign up for a shift. You’ll do things you never imagined you could. Just bring sunblock.
— Nancy Oates