After 15 years, Chapel Hill is still trying to get a grip on its housing problem | Orange County | Indy Week
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After 15 years, Chapel Hill is still trying to get a grip on its housing problem 

Tawana Sales has moved four times in search of an affordable house or apartment.

Photo by Justin Cook

Tawana Sales has moved four times in search of an affordable house or apartment.

Billy Hemmingway, a stout, heavy-lidded man wearing overalls, doesn't care about the ACC Tournament, which fades in and out on his broken television.

That's just a game. Chapel Hill's housing dilemma is not. It's personal to him, he says, as he finishes his lunch: a burned hockey puck of a burger, onion rings and assorted vegetables.

"It's wrong," he says. "People kick you out for a bunch of students. It makes you want to do dirty stuff to them."

Hemmingway moved to Chapel Hill 10 years ago, in search of cheaper homes and cheaper groceries. He found neither in Chapel Hill.

"You got to go in the ghettos to get anything cheap," he says.

He now lives in one of the remaining old homes near the edge of Northside, a historically black, low-income neighborhood overrun in recent years with student rentals and escalating property values. Some of these houses show their old age. Others are in the midst of renovations. Landlords know UNC students are looking for convenient rentals. Campus is less than a mile from here.

Affordable housing is a perennial problem in attractive, growing locales. But for Chapel Hill, a 21-square-mile college town limited by tight development boundaries drawn in the 1980s, it's a perennial crisis.

Last week, town and university leaders announced their latest remedy for Northside. UNC will loan $3 million, interest-free over 10 years, to the Jackson Center, a neighborhood nonprofit, which will use it to buy and preserve cheaper properties.

This will stem some of the bleeding, but as as town staff warned members of the Chapel Hill Town Council last month, housing is becoming too expensive for nearly everyone but students and the wealthy. And in the next 15 years, the problem might get worse.

Section 8 vouchers have dried up; nonprofits have long waiting lists for rentals and homes. Land values are increasing. Meanwhile, construction of homes valued higher than $500,000 increased a staggering 3,117 percent from 1990 to 2010.

Chapel Hill has battled this problem for 20 years, but today it needs new ideas. In all likelihood, the new direction will come from the Chapel Hill Housing Advisory Board, a mix of nonprofits, developers and town leaders expected to offer a plan this month on how to spend money from a town housing fund on affordable units.

The group is also expected to present to the council new strategies for encouraging developers to build more affordable homes.

"We need to make sure that the people who are building the infrastructure in our town don't have to drive over an hour to work," says Holly Fraccaro, chairwoman of the Housing Advisory Board and chief executive officer of the Home Builders Association of Durham, Orange and Chatham Counties, a trade and lobbying group. "I know how passionate people are about greenways and park space. But at the end of the day, if the people who are maintaining those parks can't live in town, is it really that important?"

Sally Greene says she should have never left the Chapel Hill Town Council. She was one of the principal architects of the town's innovative inclusionary zoning ordinance, which requires developers to set aside 15 percent of new home developments for affordable housing. Otherwise, they pay a fee to the town's housing fund.

Greene resigned in 2011 to focus on her work leading UNC's Center for the Study of the American South. But when she returned in 2013 to fill a vacated council seat, she found the town's affordable housing situation no better than in 2008 when the ordinance passed.

"It is part of a solution," says Greene, who sits on Chapel Hill's Housing Advisory Board. "We knew at the time we adopted it that it is not the whole solution for affordable housing."

Before the ordinance, Chapel Hill established a similarly worded housing policy in 2000. Under both measures, over the past 15 years the town has created a modest 332 new affordable units and generated $4.7 million for its housing fund. Greene says the pace was slowed by the economic collapse of 2008. With development rebounding, new affordable housing is on the way, she says.

But it's not enough. Inclusionary zoning ordinances focus exclusively on homeowners, not renters. State law forbids municipalities from imposing any kind of rent control. And with recent development almost exclusively geared toward rentals, Chapel Hill needs a new fix.

Since 2013, the town's housing crisis was compounded by an increasing number of apartment complexes that no longer accepted federal Section 8 housing vouchers. As of last September, 89 Chapel Hill families dependent on those vouchers had lost their homes. Many of those residents moved to Hillsborough and Durham, town leaders say.

CASA Chief Executive Officer Debra King—whose nonprofit serves extremely low-income residents and individuals with disabilities—estimates it has at least a five-year waiting list for anyone seeking a home in Chapel Hill. "The need is outstripping what we can do," says King.

The Community Home Trust, whose affordable housing stock comes from units built under the inclusionary ordinance, has no vacancies among its 200 residences in Chapel Hill and Carrboro.

"We have to make some real decisions about who we want to stay in Chapel Hill," says Delores Bailey, executive director of Empowerment Inc., a nonprofit that specializes in preserving workforce housing. "Don't these people have a right to live in Chapel Hill?"

Organizations such as Empowerment, which sets a goal of purchasing two homes a year, can't match private investors willing to pay twice a property's value to scoop up potentially valuable real estate. Empowerment has no vacancies in the 46 units it owns or manages.

Bailey describes the town's failure to anticipate the rental boom, given the large student population, as one of the greatest shortcomings of its housing efforts in the last 20 years.

"We're not thinking far enough ahead," she says. "They should have heartburn over that."

Tawana Sales, a substance abuse adviser for UNC-Chapel Hill's Horizons Program, has lived on Cole Street since late 2013, but there's a transient feel to her home, as if the oversized family photos, sports trophies, aging electronics and jumbo couch have not found a permanent place.

Sales moved here after Carolina Apartments in Carrboro stopped accepting Section 8 housing vouchers. Sales had four weeks to move. It marked the fifth time since she moved to Chapel Hill in 1998 that Sales had to leave her home because it had become too expensive.

"If we lose this house, I don't think I'd have the energy to look again," says Sales. "It would be over for us in Chapel Hill."

Chapel Hill Mayor Mark Kleinschmidt has long discussed affordable housing. When he ran for mayor in 2009, the issue was a central component of his platform.

"If you're going to make a list of challenges for the Town of Chapel Hill, it doesn't take a rocket scientist to know affordable housing will be there," Kleinschmidt says.

Finding a solution, though, will take cooperation from local leaders, nonprofits and, most important, the area's developers.

One of those builders is Roger Perry, president of East West Partners, the prominent Chapel Hill developer behind projects such as East 54 in Chapel Hill, the Liberty Warehouse renovation in Durham and Obey Creek, a planned 124-acre, mixed-use development in Chapel Hill.

Perry says it's "almost impossible" for builders to finance apartments for Chapel Hill's poorest residents, those who fall below 60 percent of the town's annual median income, or about $36,000.

"It always boils down to money," says Perry. "And where that money's going to come from."

Robert Dowling, executive director of the Community Home Trust, says financing is a fundamental weakness of Chapel Hill's housing ordinance. "You have to structure ordinances and policies so that they enable the developers to succeed," he says. "Otherwise, we're not getting the units. Where will the housing come from?"

But to achieve affordability, homebuilders, residents, nonprofits and town officials will need to compromise, Fraccaro of the housing advisory board says. "Everybody should be willing to give up a little."

Last year, the builders of The Graduate, a $20 million, six-story apartment complex planned for West Franklin Street, agreed to set aside 15 of a planned 100 units for affordable housing. The town also negotiated a $800,000 contribution to its housing fund from The Courtyards at Homestead, a unique project in Chapel Hill in that it aims to to serve the town's population of seniors.

Without sufficient perks for the private sector, support will have to come solely from public and nonprofit sources. Chapel Hill's affordable housing fund is likely to be the biggest funding source. Last year, town leaders agreed to annually set aside a penny of the tax rate for the fund, generating about $700,000 for it in 2014.

The fund is also stocked with payments made in lieu of affordable housing by developers, but most leaders agree that that will still be insufficent.

Fraccaro says the town should consider a streamlined permitting process to entice developers. Additionally, if Chapel Hill is collecting new tax revenues from development, leaders should earmark some of those dollars for the town's housing fund. Officials could also pursue voter-approved bonds to finance public housing, developer subsidies and public-private partnerships.

The town's strategies will inevitably be forced to factor in public transportation as well. In Durham, city leaders adopted a resolution last May setting a goal to preserve at least 15 percent of all housing near planned light-rail stations for families earning 60 percent or less of the median income.

But some in Chapel Hill admit the town's housing-transit plans lag behind Durham's. In Chapel Hill, where there is less land available for development along the rail corridor, that work has just begun. (Town officials will hold a public workshop on the light-rail and its housing impacts March 18, from 4 to 7 p.m. at The Friday Center in Chapel Hill.)

Kleinschmidt says the town will have to redouble its efforts. "Otherwise, we'll be a town of which many of our critics already see us. We will be a town of college students and retirees and that is it."

On Johnson Street, a wooded neighborhood on the town's south side, dingy homes cling to the hillside. A damp, plaid couch sits on the curb. Walt Morrow, a spindly 71-year-old with generous ears, surveys the view from his empty front stoop.

"I'm living," he grumbles. "But in no type of way like I want to."

UNC is about a mile away. But from Morrow's cramped, brick unit, which is little more than a living room, bedroom and bathroom, the town and its wealth seems distant.

Morrow a retired house painter and Chapel Hill native, says he was forced out of his home on Bynum Street eight months ago by rising rent. The landlord wanted student rentals. Now he depends on Empowerment Inc. and food stamps because he can no longer work. On his bony wrist, he wears an orange hospital bracelet, which reads, "Call, don't fall."

Chapel Hill's leaders have forgotten him, he says, over a blaring television. On the set, Drew Carey hugs a lucky winner on The Price is Right.

"There's no voice for us anymore," he says.


WHERE TO LIVE?

Area Median home values
Chapel Hill $368,400
Raleigh $202,800
Durham $176,700
Cary $302,200

According to federal guidelines, households should not spend more than 30 percent of their annual income on housing costs.

% of Chapel Hill homeowners who pay more: 26.1%

% of Chapel Hill renters: 56.1%

Compared to other Triangle cities:

Raleigh: Homeowners: 26% Renters: 46.9%

Durham: Homeowners: 25% Renters: 45.7%

Cary: Homeowners: 14.5% Renters: 45.6%

Source: American Community Survey, 2013

This article appeared in print with the headline "You can't afford it."

  • Why Chapel Hill is so damn expensive

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