Matt C has all the answers, everyone else should shut up

Ruby Sinreich's picture

In this ten-minute rant, Chapel Hill Town Council Member Matt Czajkowski first lectures the entire room (which includes affordable housing experts and experienced elected officials) about basic economics, goes on to blame the town for home prices rising, and then just straight out yells at everyone for several minutes. Beware, this content is anxiety-triggering for me, possibly for others too.

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If this embed form the town's system doesn't work, you can watch the whole thing at http://chapelhill.granicus.com/MediaPlayer.php?view_id=7&clip_id=1943 starting around 2:39 into the meeting.

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12 Comments

A debate worth having

While I'm pretty sure I don't agree with Matt C, I think the argument he makes is worth engaging, particularly because it addresses the fundamental challenge of affordable housing—how can a community keep housing affordable while maintaining the qualities that cause it to be a desirable place to live?If we follow "basic economics," as Matt C encourages us to do, the way out of this conundrum is to make it easier to build densely in the urban core, and continue to do so until the demand subsides. According to the "filtering" model of development, as new pricey condos are built, older, less centrally located housing becomes more affordable. (In Chapel Hill, I imagine the new Shortbread lofts will draw students who would otherwise have lived in Northside). The problem with this model is that in the post-Jane Jacobs era, cities and towns are very reluctant to build new housing. Even New York, with Matt C cites, makes it hard to build new housing. You can go to Greenwich Village today and see blocks and blocks of three-, four-, and five-story buildings. Even less "historic" neighborhoods in Brooklyn and Queens are full of small apartment buildings and single-family rowhouses. Even Midtown East, home to the Chrysler building, has height caps that have been in place for decades (they're just now being overturned). There aren't many examples of cities that are doing the right thing in terms of housing policy, but many look to Toronto, which had 50K housing starts last year (the same as NYC, even though Toronto is 1/3rd the size) as an example of a city that's building to meet demand.  Personally, I'd like to see Chapel Hill grow in the downtown area, and convert the rest of the parking lots on Franklin and Rosemary streets to condos, apartment buildings, or perhaps office space. Witha  bit more density, it would be easier to argue for improved transit to Durham/Southpoint/RDU, which would make it possible for people to live in downtown Chapel Hill without a car, which would drive down the cost of housing even further. (Chapel Hill, like many towns, builds too much parking, and fails to price it appropriately, which raises construction costs for everyone.)

Housing supply

I think this is a discussion worth having also. Supply-side economics has created many of the financial problems we have in this country. I don't think it is a given that creating more apartments is going to solve the problem anymore than I believe the flip side of the supply side coin that allowing businesses to go untaxed will create more jobs. There is an elasticity between supply and demand that has to be considered. Converting currently affordable housing developments into high-end developments just to get a handful of "affordable" units is short-sighted IMHO. And as anyone who has been following the Community Home Trust knows, there is an excess inventory of affordable units for purchase. Are we going to create the same un-wanted supply of affordable rentals? I know the "progressive" arm of this community automatically discounts anything Matt says, and sometimes, the way he says it does interfere with the message. But claiming that Chapel Hill is turning into a bedroom community was equally over the top. It would be a shame to avoid this conversation over this. 

Geoff Green's picture

San Francisco

The Atlantic has a good story about the effect of development restrictions in San Francisco. The desire on the part of current residents to keep their neighborhoods exactly the same, in the face of huge demand to live in that urban area, has caused huge price appreciation and pushed growth outside of the city's transit-rich core and into Oakland and other suburbs, many of which have their own anti-growth policies (hello Marin County!). The end result is massive price appreciation in San Francisco, maing it a challenge to find anything that's affordable to a non-Twitter employee (and just wait until they cash in their IPO winnings). By contrast, Texas' growth, Ed Glaeser points out, is due in no small part to the easy availability of afrodable housing, notwithstanding the fact that the climate is much less compatible with human habitation than the Bay Area.The growing number of employees who work at UNC and who live in Mebane and other distant points is our own local example. While form-based zoning won't solve every problem, if implemented in Chapel Hill with reasonable density allowances, it will provide a predictable development process that bypasses the SUP and anti-change objections that accompany individual projects and result in adequate housing growth.(As an aside, New York thankfully has made some progress under Bloomberg, although much of the city is still under-zoned and landmarking has frozen too many neighborhoods in a stasis. But there has been housing growth and there are neighborhoods outside Manhattan that have good accessibility and reasonable housing prices.)

ldhintz's picture

affordable housing

I managed to attend this part of the Council meeting after first going to the Obey Creek meeting. In my mind the entire point of the Affordable Rental Housing report was given the economic supply/demand reality,  and current state laws about minimal regulation of landlords, what can the town do to create a strategy to solve the problem. Matt seemed to miss the entire point of the report. Loren

Questions

The Council committee on affordable housing states: "The goal of the affordable rental housing strategy is to increase the quantity and quality of rental housing affordable to all who want to live in Chapel Hill by promoting the development of new units and preserving existing units." Two proposals that have been challenged are Timber Hollow expansion which will go before Council tonight and Colony Woods redevelopment as part of the Ephesus/Fordham focus area plan. Timber Hollow consists of 196 1-2 bedroom apartments that rent from approximately $650-$950 per month making them all "affordable." The expansion plan is to add 111 apartments to create a total of 307 apartments all but 14 of which will be high end, "unaffordable."  Maybe I'm misunderstanding the plan, and if so, please correct me. But trading 196 affordable units from the current development for 14 affordable units in the redeveloped complex doesn't sound like an equitable swap to me. My understanding is that something similar is planned for Colony Woods. If I'm missing something in the big picture about how these two projects help the town's goal of expanding the inventory of affordable rental units, I'd very much like to have it explained. It's not just me who is confused.

Geoff Green's picture

Timber Hollow

I'm not sure I understand. They're adding new apartments, getting rid of some (because they're working on basically the same footprint), and keeping most of the existing apartments. So I don't think it's fair to say that this expansion is getting rid of 196 affordable apartments and making 293 unaffordable apartments. Do the documents say anything about how much the units will be rented for?

Jason Baker's picture

Re: Timber Hollow

The developer is renovating the existing units. Many of the proposed upgrades are things that will make the total cost of living lower, like new hot water heaters and better insulation, through lower utility bills (and a lower carbon footprint to boot!). Some have criticized the upgrades as likely making the units less affordable, but there isn't a great deal of information about the anticipated cost difference in the actual SUP application. It did come up in our discussion about the project at the planning board, but the general regulation of rental rates aren't within the scope of the town's authority. In fact, since the renovations to the existing units which will remain within the same building footprint, they could probably be done completely separate from the SUP process entirely. The target market and price-point for already built rental units is something we have next to no control over in North Carolina, which is why other tools (such as increasing the supply of market-rate rentals and developing a subsidized affordable rental program like that attached to Timber Hollow) seem more promising.

re: market rate rentals

"The target market and price-point for already built rental units is something we have next to no control over in North Carolina, which is why other tools (such as increasing the supply of market-rate rentals and developing a subsidized affordable rental program like that attached to Timber Hollow) seem more promising."So this is the theory the majority of the town council, with support from many citizens, is  working on. Is it a theory based on hard evidence or is it speculation? If there is hard evidence or even qualitative data (such as similar models from other communities or preferably projects from the same developer), I think the general public would like to hear it as much as I would. If there are good case studies, this issue wouldn't have to be as contentious. There are obviously differences in what the various community groups want/expect for the future, but the one issue that seems to unify everyone is a desire for affordable housing. Instead of discussing this based on firmly entrenched sides, let's not act like the House of Representatives and instead have an honest discussion. If the theory is really speculation, then let's acknowledge it and hash it out from a pro and con approach so we know the risks as well as the potential benefits.I think we can all pretty much assume that most developers are not going to renovate property without raising the rents to pay for the renovations. So the expectation that Timber Hollow is going to change from affordable to less affordable seems like a pretty good bet. I'd love for the developer to end up as one of the good guys who isn't out exclusively to line his own pocket though. 

Erin Crouse's picture

I don't think that everyone

I don't think that everyone is united around affordable housing, especially when it comes to housing for students and young professionals without children. If they were, you wouldn't see much opposition to projects like Shortbread, Lux (the former Bicycle Apartments), Timber Hollow, and many of the parts of Central West. Instead, the discussion is often around "workforce" housing. I'm not saying the couple who works at UNC with small children might need help finding housing in Chapel Hill, but it's short-sighted and exclusionary if that is the only consensus community groups can come to. Most people who need cheap housing will be covered by the market- not the Town, section 8, or the Community Home Trust. We have to stabilize the market rate as well by increasing supply.And sometimes apartments need to be renovated. Yes, it might raise rent prices. But do we really want to create substandard living conditions for lower income people in our community by not renovating? Timber Hollow was built in the mid 1980s. I think some renovations after nearly 30 years are appropriate, especially if the units might not have been kept in good repair. When I saw the SUP on my advisory board, the people from Timber Hollow said that they still intend their units to be slightly below market rate after the renovations. Not every developer will make that promise, but the Town has no authority over those renovations if the footprint of the building does not change.I spent 3 years living in University Gardens, which has not received any major renovations since its construction 50 years ago. Yes, it was cheap, but the electrical wiring was so bad that I was once electrocuted by touching the stove and the sink at the same time with damp hands (among many other wiring and plumbing issues we ran into).  Fortunately, the landlord was responsive and fixed the issues as we reported them, but I was unsuprised to find out that electrical issues were the cause of the building that caught fire earlier this year. There is only so much that can be done before safety issues necessitate major repairs.

Focus on Families with Children May Be Too Late

One of the problems with trying to "help families with children find housing" is that by the time there is a child in the family, it may be too late to help the family because of the massive change in household finances having a child creates (increased spending on food, healthcare, insurance, clothing, etc) for a couple on a modest income, and the challenge these new and expanded financial categories present to assembling a down payment.If singles or childless couples can build equity in OCHLT/affordable homes in their mid-to-late twenties, it is much more likely they will be able to buy market rate homes in their late twenties to mid-thirties, since home ownership tends to be the primary savings vehicle for many households.In undergraduate school people talk about being enrolled in "pre-law" and "pre-med" programs.  Housing policy should recognize that there are many people in their twenties earning near-median incomes or below who are single today...but who also will be married and expecting a child (and the expenses that come with parenthood) in a few years.   Think of these folks as PRE-FAMILY.  Helping them buy homes now while their finances are less complicated would probably yield a bunch of middle-income homeowners with children 5-10 years later, with some graduating from starter affordable homes to market rate homes, and others to larger affordable homes in the community.

ldhintz's picture

Timber Hollow

At the end of the hearing last night the applicant stated that the original apartments after renovations would still have a rent at what is considered affordable. Current rent is $758 for one bed room and $975 for two bedroom. He said the new rent after renovation would be at the 80% AMI level rather than 60% level. He said the new units will cost 2x what it cost to build the old units ( current dollars or inflation dollars?) and they would be at a yet to be determined market rate while the older units will be at a lower rate. Loren

czei's picture

Supply and demand

The first part of his rant seemed ok.  I like looking at actual studies and numbers as well.  Where he went wrong is the idea that supply and demand doesn't apply in Manhattan or Chapel Hill.   His example that Manhattan has been adding apartments and condos for decades and rents have continued to climb is an obvious logical fallacy.  Rent and house prices are incredibly sensitive to supply and demand, and increasing supply does lower prices compared to the alternative, which is to not increase supply.its pretty basic economics...