Let me see whether I have this right – a developer can come into town, get town approval to build a 
project of high-end apartments and condos that displaces residents who have trouble affording living here, and we as taxpayers have to pay to make housing available to the displaced residents?
That’s pretty much what the proposal to float a multimillion-dollar affordable housing bond adds up to. It’s a problem created mostly by developers and could end up costing taxpayers.
Town Council discussed a $10 million bond issue during its March 14 meeting. (Some advocates asked for $15 million.) Council is to vote March 21 on whether to put the issue on the ballot in November.
The proposed bond would ask taxpayers to dig deeper into their own pockets to pay for a crisis that was created by developers and previous councils that pretty much gave builders a pass on contributing substantially to the town’s stock of affordable housing. The town’s inclusionary zoning ordinance, which requires developers of owner-occupied units to provide anywhere from 10 percent to 15 percent affordable housing in their projects, went into effect in 2011 and aimed to mix affordable units into more expensive neighborhoods in Chapel Hill. But prior councils typically waived or watered down developers’ obligation to contribute.
Projects such as Shortbread Lofts, with more than 100 apartments, paid only $25,000 to the town payment-in-lieu fund and the $100 million-plus Carolina Square contributed only $250,000. Many developers were allowed to pay a vanishingly small amount in order to build their projects without including any affordable units.
Developments in all quadrants of town put the squeeze on affordable housing to the point where affordable apartment complexes have been snapped up and renovated and put back on the market at much higher rent.
With more than 5,000 apartments being built in the recent past and near future, we should have ample affordable units. Instead, we have come to see a bond issue as the only way to address the affordability problem.
What this all comes down to is paying one’s fair share. When a developer plans a project for Chapel Hill, he is looking at making a sizeable profit. You cannot go wrong building in Chapel Hill. When a project is finished, the developer leaves taxpayers and the town to deal with the increased costs for town services, school needs, traffic congestion and added pollution.
Affordable housing policy experts agree that taxpayers alone can’t provide enough subsidy to meet the need for low-cost housing. For-profit developers have to invest as well. We can’t expect taxpayers to continually bail us out.
— Don Evans
Bonnie Hauser
/ March 21, 2018Great post Don. Consider that Berkshire – which continues to have a very high vacancy rate and was sold for $72 million – a windfall for EW Partners and others involved in the deal. Worst possible outcome – no affordable rents, lots of vacant apartments.
I believe that CHTC has raised the bar on the kinds of affordable housing that the town will invest in – but not sure how they plan to address your important topic of leverage. Hopefully more taxpayer dollars (less leverage) wont be the solution.
Del Snow
/ March 22, 2018Don, I’ve been saying this for a l-o-n-g- time as well.
Previous councils were leery of just using the power of approval to get what the town needs – they bought into the idea that it is the LANDOWNER who holds the power.
Right now Carraway Village is building a minimum of 400 market rate units and Evolve just finished 154 luxury units – this is in close walking distance. Instead, lets build up the commercial tax base we so desperately need.
I think Staff is working with the Hanover applicant. But I don’t think or know that they will communicate any “message” other than trying to get some concessions. Someone needs to sit down with the land owner now and say “NO matter WHAT, we will NOT approve luxury development here. Find a different plan.” I hope this council,unlike previous councils accept the power and authority to say NO.
Deborah Fulghieri
/ March 23, 2018Berkshire was also a windfall for the town manager, whose budget rose along with the increased tax harvest. Interestingly, this doubled the property tax on the neighboring property (the strip where Whole Foods is). One effect is to increase the rent paid by the PTA Thrift Shop by more than $14,000– a provision in its rental agreement on file with Orange County– which means that much less for the beneficiary of the PTATS’s only named beneficiary, the CHCCS PTAs.
David
/ March 27, 2018“Berkshire was also a windfall for the town manager, whose budget rose along with the increased tax harvest.”
Exactly. Once we deduct the new expenditures associated with the redevelopment, e.g., new staff hires and consultant contracts, how much, if any, net revenue has EF delivered to help hold down property tax increases?