Local governments tackle affordable housing

During last week's Sierra Club forum in Carrboro, candidates were asked what they felt needed to be done to increase the stock of affordable housing in town. Each of the 4 candidates who addressed this question agreed that it is the most complex problem before the BOA.

Both Carrboro and Chapel Hill work from a version of inclusionary zoning that requires new developers to include affordable units along with their market priced units. In Carrboro developers who comply with the "small house ordinance" are given a density bonus to help them recover some of their lost opportunity. In Chapel Hill, developers can provide payment in lieu of compliance. New units developed through the Carrboro plan are deeded over to the Orange Community Housing and Land Trust as a means of ensuring they stay affordable. Buyers own the dwelling but not the land upon which the dwelling sits. Chapel Hill is currently clarifying the legal the language around their affordable housing options.

But what about existing housing stock? I've heard that houses along Rogers Road, a historically black community, are selling for $200,000. That's great for the sellers, but in addition to removing stock from the affordable category, it also increases the tax valuations for existing owners, making their homes less affordable. Tax valuations are made against comparbly sized/located properties sold within the past calendar year. For example, homes in Northside were valued against the condos from Rosemary Village during last years reassessment. Seems like a vicious cycle, doesn't it? That's why this issue is so complex.

Some facts from the Orange Community Housing and Land Trust:

  • According to the Triangle Multiple Listing Service, in early 2005 the average sale price of a home in Chapel Hill was $365,318. This included single-family homes, townhomes, and condos, new construction, and resale and is a 9 percent increase over the average price in 2004.
  • To purchase a new medium-priced single-family home in Chapel Hill-Carrboro with a 20% downpayment and a conventional mortgage in today's market, a homebuyer would need an annual salary of $155,000.
  • Between January 2001 and January 2005, the assessed valuation of all homes in Orange County increased, on average, 20 percent, according to the county assessor's office.
  • In Hillsborough and Carrboro, the assessed valuation jumped 25 percent for the same period.
  • In Chapel Hill, the four-year increase in assessed valuation on all homes was 27 percent.

And let's not forget homelessness. Homelessness is too often viewed as a problem for those currently designated as 'chronically homeless.' But in this community, we have way too many living doubled up or on the edge of homelessness solely due to the expense of living here. (There is a committee trying to determine the extent of this problem--we do not have numbers.)

Tonight the Assembly of Governments will meet at Carrboro Town Hall to discuss the complexities of affordable housing. The Assembly of Governments are elected officials from Carrboro, Chapel Hill, Hillsborough, and Orange County. They meet a couple of times each year to discuss items of mutual interest. While the agenda for Thursday's meeting is dedicated to affordable housing, don't be surprised if a few other related topics (Rogers Road?) are discussed as well. The session will be broadcast on the local public access channel (channel 18 in Carrboro).



Since Carrboro's agreement with builders is that affordable homes go into the land trust, they don't have the same problem. On the other hand, the property in Carrboro doesn't really contribute to the 'wealth' accumulation that helps low income families move into a more middle class lifestyle. I'm not sure how I feel about that.

I really don't understand how inclusionary zoning changes the resale problem. Can someone enlighten me?

How many times have we been over this? In this biennial exercise in election-year puffery, the conversation goes like this: Politicians who want to claim the affordabile housing issue declaim that we could wave a magic wand and solve the affordability issue if we weren't such wimps and would just adopt true inclusionary zoning, and *shazam!*, all would be right with the world. The problem, (as Terri has pointed out above), and as all three local government attorneys have restated (in a memo just last week), is that a measure directly regulating, by ordinance, housing prices, requires enabling legislation. This (again, as Terri has pointed out) is an artifact of the relationship between state and local governments in North Carolina.

For those who haven't gotten it the first thirty-seven times (for those who have, skip this part), both local governments have tried, time and time again to secure such legislation in the General Assembly, which is always summarily spiked by shills for the Homebuilders' and Realtors' lobby. The farthest it's ever gotten was a couple of sessions ago, when Ellie and I ran a bill and she got it in front of the Senate Local Government committee (which she chaired at the time). The following illustrates the potential risk of adopting the ordinance without authorization: When the bill was introduced to the committee, a senator from Guilford County (I think), was ready with a substitute motion to forward a negative recommendation on the measure, and force a vote (and he had the votes). Why is this important? Because thus far, the general assembly has been silent on this issue directly. Such an action would have placed on record a negative vote signaling the legislature's intent, which would have been tantamout to a direct prohibition on local measures with this effect, which is commonly referred to as 'pre-emptive' legislation.
This placed in potential jeopardy even the existing measures that we were using. This was within seconds of passing, when Ellie got a motion to adjourn, which takes precedence over any previous motion, and stopped action on the measure.

My point here, is that adopting a measure directly tweaking the nose of the legislature entails the risk of prompting a similar scenario. While our current measures are far from perfect, they are finally placing product on the ground. It is true that Davidson, NC has a provision in it's form-based ordinance that works a lot like true inclusionary zoning, and has thus far gone unchallenged, but it's operated largely under the radar screen. We studied this ordinance a few years ago, but it was the opinion, again of our attorneys, that adopting such a measure entailed the risk I've described above. If we want to make a statement, fine. But I'd suggest that if our real goal is to get affordable product on the ground, that we need to play smart.


Let's say that we got the enabling legislation and were able to adopt an inclusionary zoning ordinance. How would that prevent the problem Ruby referred to above--after the 'affordable' property goes on the market a second time, it's market value instead of affordable? Is there something special about inclusionary zoning that imposes the same kind of re-sale restrictions as the land trust does?

Alex what enabling legislation has the state legislature given to ask for payment in lieu?

Isn't payment in lieu voluntary?

I think my point is not whether or not the law exists just that developers who want projects done may be agreeable to de facto inclusionary zoning to get things done. AND elected officials should push for houses that remain affordable instead of small sizes or payment in lieu as the price of admission - regardless of what the legislature says. Particularly because developers are often asking for special use permits or bonus densities - it is a tit for tat exchange.

Helena, in Chapel Hill I think we effectively do have what you call de facto inclusionary zoning. Payment-in-lieu is voluntary in that it is one of three options developers may choose from to address affordability. The other two are 25% small houses or 15% affordable houses, which ARE permanently deeded to the Land Trust. I don't understand why Terri keeps insisting otherwise.

Thanks for the clarification - it seems like 15% deeded to the land trust is the best option - call it what you will..
small size has too many loopholes from what I've actually seen of it. Say what you will but the larkspur model with integrated and spread out housing seems like the best.
Terri often confuses me :)


You wrote above "My biggest concern is that there is nothing to guarantee the home's affordability after the initial restriction expires. In fact, we have even seen developers build “small” homes with unfinished attics that are made to be converted to a second flooor of living space." If the properties are going into the land trust as you say in your last post, then what is the 'initial restriction' that expires and what difference does it make if there's an unfinished attic?

Terri there are THREE different options. The small house option is the only one that does not involve the Land Trust. The small houses have to stay small for something like 30 months and then they're fair game. The other options are to either build affordable houses, which are then managed by the land trust, or just give the payment in lieu to the Town, which usually gives it to the Land Trust.

The small house option is the only one the Council can (currently legally) *require*. The others are options which developers may choose, as long as the Council approves.

My own understanding of inclusionary zoning is very different from Alex' and Terri's.

North Carolina municipalities do appear to have the implicit power to institute inclusionary zoning. Last year, the UNC School of Government published a document giving guidance to North Carolina municipalities on how to enact their own local inclusionary zoning ordinances. Interestingly, Chapel Hill is featured as a positive example for the limited steps that it has already taken in its regulations. Davidson already has its own inclusionary zoning ordinance as Alex noted. Chapel Hill is moving in that direction by working to strengthen the requirements it already has.

Many people misunderstand the nature of home rule in North Carolina. Although municipalities do not have true home rule, they do have room to maneuver beyond the literal words of state statute. According to a recent article in Carolina Journal,

In 1971, however, the General Assembly adopted N.C. Gen. Stat. § 160A-4, which states that municipal charters “shall be broadly construed and grants of power shall be construed to include any additional and supplementary powers that are reasonably necessary or expedient to carry them into execution and effect.”

It is important to note that consultant Mark White, having examined North Carolina law, advised Chapel Hill to put inclusionary zoning into LUMO a few years ago. But since it wasn't explicitly spelled out in legislation, Chapel Hill's attorney advised against it, and the council went along. Alex is pretty much repeating the arguments made by the Chapel Hill attorney at that time.

Since then, the Council has added Sally Greene who has been eager to work on this issue. Fellow attorneys on the Council, Foy and Kleinschmidt, also strong supporters of affordable housing, have helped push this along, as have Strom and Hill.

Here is the agenda item from the Sept. 12 council meeting in which the council formalized the decision to create an inclusionary zoning task force as well as the charge for that group. (The motion was passed as proposed.)

Thanks to Greene's leadership and deep concern for this issue (she is also a leader of the campaign to end homelessness), Chapel Hill will soon have a model in place for our region.

Those who want to better understand inclusionary zoning should read the School of Government's report which I mentioned above.

An inclusionary zoning provision can require long term affordability including the use of the land trust.

Thanks for the clarification Ruby.

Dan--I make absolulely no claims to understanding home rule/Dillons. I've only recently learned about the distinction. The link you provide above doesn't go anywhere.

Thanks, Terri. The links are now corrected.

I'm confused. Does Sally Greene or someone else on the Inclusionary Zoning Task Force write something somewhere about what their understanding of inclusionary zoning is?

Mary, please explain your confusion more clearly. My sense is that Sally agrees with consultant Mark White and the rest of the Town Council that inclusionary zoning is legal for the town. The committee noted in the link above is identifying the best way of establishing it in the town regulations.

Check out the School of Government article for more general information. The link above has a link to their overview chapter.

I think Dan's summary and analysis is correct. I was pondering my own response to Alex and Dan wound up saying what I would have.

It's worth noting that the "additional and supplementary powers" clause he cites figured in the court defense Chapel Hill and Carrboro offered of their policies on domestic-partner benefits. Granted, it helped that the lawsuit challenging those policies was heard by a visiting judge (Orlando Hudson) who's from the area and answers to a constituency that by and large shares the southern Orange outlook on such matters.

A case to keep track of is Durham County's present attempt to fend off a challenge to its attempts to levy school impact fees. Unlike Orange, Durham doesn't have explicit statutory authorization to levy the fees and is relying on a variant of the same implied-powers defense Chapel Hill and Carrboro used in the domestic-partners case. Durham's success or failure promises to add clarity to the issue of how much latitude the courts will allow local governments.

I would say, however, that I don't agree with Dan's attempt to give Strom and Kleinschmidt credit for helping push inclusionary zoning along. To the contrary, they both accepted the town attorney's rationale for keeping it out of LUMO. The issue is back on the table now solely because Sally has gotten behind it.

Isn't it also the case that IF the town were to proceed without specific enabling legislation and the state legislature (home builders association) objected, the legislature could then adopt their own legislation that would prevent any NC town from adopting inclusionary zoning? Isn't that the case even if a judge upholds implied powers? (trying to learn not argue.....)

Of course the legislature can define the role of cities within the scope of the constitution and the bill of rights. But local government typically works within existing law, requests new law where needed, and doesn't worry too much about reaction.

There are many good things we do here that conservative forces would like the legislature to forbid. UNC's contribution to the bus system is unlikely to find favor with the John Locke crowd. Our domestic partnership benefits may well come under attack from religious reactionaries like called2action.

But those threats have rarely stopped us from pursuing sound policy. We don't want to underestimate the power of the HBA but neither do we want to fall short of our principles just because they might threaten to put "a gun to our head."

Dan, I think our understanding of how this works is not dissimilar. The towns' legal position on the matter remains ambiguous. We are intimately familiar with the 'supplementary powers' language. The attorneys considered our options within that context. Moreover, the IOG report cited was used in the deliberations of the county's inclusionary housing task force (in which I participated). Again, the legal conclusion was, well, inconclusive.

What Terri picked up on from my little rant is, that a potential danger of adopting an ordinance which directly contravenes prevailing legal opinion, is that the legislature could (and almost did---see above) decide to 'clarify' the issue by addressing it with either a direct statutory prohibition, or a negative, 'on the record' vote---which would be tantamount to the same, signaling 'legislative intent' directly addressing the issue---and perhaps going beyond the discreet question of 'inclusionary zoning' per se, imposing even broader restrictions on our ability to use even our existing mechanisms---or any new mechanisms we might come up with to try to achieve the same effect. In which case, we would all be well and truly...er...screwed.

Now, if the case in Durham Ray cites sets a precedent that clarifies the 'implied powes' issue in local governments' favor, that changes the landscape substantially (although it still does not preclude the possibility of pre-emptive legislative action, my guess is that it would be less likely).

Now, there seems to be an implication here that I am back-pedaling on this issue. This is not the case:

1.In fact, the whole discussion of inclusionary zoning began when I proposed the idea here in Carrboro back around '91 or so (before I was an 'elected-type').

2. The other mechanisms--'small house'(which I invented out of whole cloth), density bonuses, and the 15% affordability 'option' are 'work around' attempts to achieve the same effect without prompting hostile legal or legislative action.

3. The most recent proposal I put forward a few months back, was to steal a piece from Austin's 'sustainability matrix' in which development proposals are prioritized based on their meeting characteristics of sustainability. By pulling out the 'affordability' component, the way it would work would be to send any application that doesn't meet the affordability criteria to the back of the line in processing, thereby bottling up any such applications. Staff proposed a milder mechanism requiring a 'come to jesus' meeting with the board for such applications, and the board decided to try this.---hence 2 such meetings w/ applicants (s/be noted that both included a component that met our affordability criteria, but didn't reach the 15% threshold). In my view, this ain't working, and I propose that we go back to the original idea.

A note: Long-term affordability restrictions are a common component of Inclusionary ordinances.

Bottom line: If Sally, you, I, the guy in line at the bank--- anybody---I don't give a rip who gets the credit--- can come up with mechanisms that'll work more effectively that don't backfire, let's do it. But as I said, let's play smart.


1991? Weren't we at war in Iraq that year? And already working toward inclusionary zoning. It's a good thing we old timers are around to remember what we did since clearly no one else does. Except Gronberg, of course.

I suspect that Ray Gronberg also knows that we were not at war in Iraq that year, but in Kuwait. Did you mean with Iraq?

War issues aside, it seems like this discussion is good justification for Jackie Gists' comment at the Carrboro Sierra Club forum that affordable housing is one of the most complex issues before the four local governments. One of my biggest criticisms of those governing bodies is that they unintentionally make decisions that further raise the cost of housing. Every new fee, service, amenity, environmental protection confounds the challenge for existing homeowners as well as builders. For example, strict environmental regulations (which I support) slow down the approval process and raise sales prices. It's not always clear to me how those tradeoffs are made. One way to make the process more transparent would be for each elected body to develop their own version of the Charlotte-Mecklenburg Sustainability Index.

Fred, we were actually in Iraq in 1991. XVIII corps and V corps swung into the country in the course of excuting the left hook, remember?

Terri, I'm not sure how environmental regulations have a significant impact on the price of affordable housing. Let's say a range of environmental measures - stream buffers, tree protection, runoff regs and the like - add a month to the project. How much would that add to the price of a market rate house? Given that affordable housing is pretty much only built as a result of negotiation in the SUP (at least in CH) and that the prices are therefore relatively fixed, what is the impact on affordable housing?

For every section of a developers' land tract that is taken out of development for any purpose, including environmental impact, the price of housing goes up. Wider stream buffers--fewer houses--higher sales prices. I'm not advocating for relaxation of environmental standards, just acknowledging that there is a tradeoff. Other environmental issues that drive up prices are open space requirements, slopes, and one day (I hope) mature hardwoods. In the long-term, I believe the community benefits more by making environmental protection choices.

A couple of things....

The front page of the N&O had an article about Chapel Hill's affordable housing policies and the need for changes to it, with extensive quotes from Mayor Foy. See


It also seems that there are a couple of different problems which may require different solutions

1) Long standing homeowners who can't afford their property taxes anymore i.e. senior citizens on fixed incomes who have had a great deal of price appreciation

2) People trying to get into the Chapel Hill market for the first time.

In the Matt Dees piece, he states: "A task force will soon begin drafting what's called an 'inclusionary zoning ordinance' to guarantee that some percentage of every new neighborhood built in Chapel Hill would be affordable to people who make less than 80 percent of the median income."

Does anyone know how many possible "new neighborhoods" that we might build in the future?

Given that there might not be many, will we be able to build work force housing within our existing neighborhoods?

Chris, it's encouraging that the Town is trying to become more flexible in its approaches. The "small house" rework is one example, responding positively to Bradley Green is another.

If you've heard or seen any of the forums, you might remember that I spoke about 3 segments of our community that seem to get missed in most discussions.

One, working folk on the less than %50 median income scale. I had a gentleman approach me at Festifall who was a native of Chapel Hill, made a moderate income, was a father but currently single, who said he was on the "bottom of the list" for affordable housing - that he wouldn't be able to live here like he once did. The current "schemes" in place don't account for folk like him.

Two, long time residents that are being "taxed" out of their homes - folk that are struggling to keep what they have after having made a longterm commitment to the community. Adjusting the homestead exemption will help some but we might need to look at some novel strategies like reducing the rate of growth of taxes for these homeowners and recovering the "lost" revenue at change-of-ownership. Of course, the superior solution will be to reduce taxes, which I think is quite possible.

Three, people trying to get a toe-hold in the market. My wife and I lived in Elkins Hills for 6 years as we scrimped and saved to buy our own house. This type of "real neighborhood" - a neighborhood with reasonably priced housing and a mix of families, homeowners, renters, etc. - is rapidly disappearing from Chapel Hill. The NCD might slow the disappearance of this type housing-stock in some neighborhoods, but many more areas - like Elkins Hills - are not on the radar. I'm not sure what we can do to protect "transitional" areas like this, but recognizing them is a good first step.


I suspect that if you look at little closer at the numbers you will find that its housing inflation that is contributing to the tax problem rather than tax rates. Housing valuations are based on local comparables. Since the market for new houses is typically priced at $300,000+, existing homes are "compared" to them during revaluations. The tax rates themselves are minuscule compared to the growing 'tax values' of existing small homes.


Two of my neighbors put additions on their homes in the past year, one almost doubled the square footage of the house. Am I correct is assuming this will affect the value of my house because it will be compared to theirs?


You should confirm this with the Tax Assessors Office, but as I understand it, the simple answer is yes but there may be other considerations that I haven't yet explored. When property is sold and when property is revalued, appraisors look at what has sold recently is the local area to determine comparables. I believe they use number of bedrooms and/or square footage to determine which properties are comparable IF there are choices. This is why the tax "values" in Northside increased so drastically this year--those small houses were compared to Rosemary Village (per the tax assessors office) condos (sq footage/bedrooms). Then on top of the increased tax valuation, the tax rate increased as well. So they were faced with a double whammy. Because the tax value increased, their tax rate was even higher than it would have been in the year preceeding.

Terri, I agree. Andrea, comparables help set the assessment.

Fred asks, 'Does anyone know how many possible “new neighborhoods” that we might build in the future?'

Did I read somewhere that the part of the NTA over which Chapel Hill has jurisdiction, is being considered for annexation? Is the contiguous development there yet?

Also, once the landfill closes, what happens to that land?

Unfortunately, we are now beginning to see the same sorts of market-driven inflation of home prices that has plaqued places like San Francisco, San Diego, Boston, etc. for many years. Revaluations take into account home sales, construction costs, etc. but appreciated home values are only useful when you go to sell your house or borrow against it. Otherwise, you continue to pay more (in taxes) each year for what is an appreciated asset on paper only.
Californians recognized this dilemna early on and passed Proposition 13 which rolled the tax value of homes back to 1978 and limited the increase in taxes to 2% (I believe) each year. When a property changed hands the tax valuation became the most recent sales price. On paper the solution sounded fine but the limit on tax increases was insufficient to keep up with the increased needs for services and has resulted in significant cutbacks and, IMHO, decreased quality of life.
While I don't think California got it right, there does seem to be a need for a system that protects long-term residents from tax increases driven by inflated sales prices of new or existing homes in a hot real estate market.

Did anyone read the cover story in last Sunday's NYTimes magazine....it was about Toll Brothers, one of the largest home builders in the country.....I haven't read it, but my understanding is that the CEO of Toll Brothers predicts that housing prices in the US will rise to European levels because of increasing restrictions on development....stat that I read in the excerpt was that average US house is 3.5 times family income...in Britian it's seven times family income

I'll try and find a link..

Chris, the link is
but I think you have to register to read it.

Chasing Ground


Still, there remains the darker possibility that the current building boom will do many things - or has already - that can't ever be undone. Robert Yaro, president of the New York-based Regional Plan Association, notes that it is enormously difficult to get in front of a boom market and plan intelligently. Development moves too fast; the patchwork of municipalities can't coordinate. Yaro told me he predicts that there will be 18 million more residents in the Northeast by midcentury; the national population will grow by 140 million. "If we accommodate the next 140 million Americans the way we accommodated the last 20 or 30 million," he says, "we would urbanize three times as much land as we have over the past 200 years. We can't afford to do that."

In many regions of the country, Yaro points out, there exist large-scale plans to shepherd the growth of the megalopolises and the megatraffic that all these new Americans will create. For all his optimism, Bob Toll, for one, has his doubts. He doesn't seem to think that forceful regional plans can be implemented in the current culture of Nimby politics, where townships, especially in the Northeast, have far more authority over development than counties or states. "That is the answer," Toll says, "but it can't be done, unfortunately. In order for you to take power for zoning and planning and put it in a regional council, you would have to take the power from the township. It'd be the last move you ever made in politics." The larger and more powerful the regional council, Toll says, the better it would be. "You would get something that makes a lot more sense" than the development we're getting today. The $4 million house in an older suburb, in other words. Or the newer (and cheaper) one-acre house in the most remote exurbs.


Thanks for the link....that discussion about regional planning vs. town planning is why I think that the following things have/will happened.

1) Chapel Hill/Carroboro bans big box retail and all that happens is that big box gets built just over the county lines along 15-501 North (New Hope Commons, etc.), 15-501 South (whatever goes in at Starpoint) and 54 East (Southpoint)....thus Chapel Hill gets none of the benefit of this commercial development from tax revenue but still suffers the bad effects (decrease in local business, traffic)

2) Inclusionary zoning won't make Chapel Hill housing any more affordable.....workforce housing for Chapel Hill will mean Southwest Durham, north Chatham, northern Orange, and eastern Alamance counties.

...hate to be a cynic


Why not try being a bit more optimistic? Use this forum and the candidate forums to encourage current and future elected officials to look at the big picture.

The permitting process for new construction is built upon zoning ordinances that were developed to ensure environmental protection. The unintended consequences is that it takes developers years to wade through the process and all their expenses and lost opportunities are then passed on to home buyers.

Slowing down the permitting process may protect the environment (which I am all for) but it also adds to the cost of housing. How can we improve the PROCESS to achieve both goals? Some communities are using form-based zoning to achieve that dual purpose. I don't know enough about this to have an opinion one way or another, but I'd like to think that a 'progressive' community can look at many options before deciding that layers upon layers of bureacracy is the only approach.

Environmental protection and economic development are not diametrically opposed concepts (which I was very happy to hear the Carrboro candidates discussing and agreeing up at their last forum).



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