Will a New Townhouse Project Open the Floodgates for Raleigh Developers? | Wake County | Indy Week
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Will a New Townhouse Project Open the Floodgates for Raleigh Developers? 

The one-story English cottages in Cameron Park and bungalows in Mordecai and the impressive Victorians in South Park and the Queen Annes in Oakwood have a few things in common: they're old, for one, and portions of the areas that feature them are protected by what are known as NCODs.

For seventeen Raleigh neighborhoods, NCODs—neighborhood conservation overlay districts—have been in place for years, even decades, to preserve their appearances and protect their historic characters. NCODs designate lot size, setbacks, and building heights to make new development compatible with a neighborhood's existing character.

Implementing an NCOD is often painstaking. Neighbors must identify the area they want covered by the NCOD and make sure it meets city guidelines for preservation. A majority of property owners must then successfully petition the city council. The process can take years, but the promise of long-term protections makes getting an NCOD worth the effort and expense.

click to enlarge A worker works on a new building being constructed on Hillsborough Street in Raleigh.
  • A worker works on a new building being constructed on Hillsborough Street in Raleigh.

But now developers are requesting a change to the city's newly implemented unified development ordinance that would alter the guidelines laid out in an NCOD that protects one of these old neighborhoods, New Bern-Edenton. If the revision passes and the developer is allowed to build townhomes to be sold to individual owners—an ownership model not currently allowed under the NCOD—that could open the floodgates for other developers, some activists say.

On the other hand, the developer says he's addressing a crucial missing link in Raleigh's market: the need for housing for the city's middle-income workforce.

"For me, the bigger story here is the missing middle tier of housing in our cities," says Stuart Cullinan, president of Five Horizons Development. "There is no small-unit ownership anymore, just the big houses and the subsidized for-sale homes or lower-end rentals. You don't have the option anywhere to provide for that middle tier of housing that middle-income owners can afford."

Five Horizons, in partnership with former city manager Russell Allen, wants to construct two buildings, each with five sixteen-hundred-square-foot units, estimated to be worth just over $300,000 apiece.

But New Bern-Edenton's NCOD, which dates from the nineties, mandates that new buildings must be built ten feet apart from one another, and that townhomes aren't allowed unless they're condominiums or apartments (i.e., the homeowner owns the actual unit but the lot underneath it is jointly shared). If the city council approves the change, Five Horizons could build townhomes for ownership rather than for lease, an easier model for the developer to finance and more affordable for the buyer.

"Staff's analysis reveals that the proposal is not consistent with the built character of the area," a city planner wrote in a recent report that recommended approval of the change. "The townhouse form does not exist in the NCOD today. However, the current NCOD regulations do not altogether prohibit the townhouse building form."

"The only thing this text change intends to do is offer a new ownership model," Isabel Mattox, Cullinan's attorney, said at a city planning commission meeting last month. "We're trying to present the opportunity to do a townhouse-ownership model, which we think leads to more ownership in the neighborhood, which we think is a positive thing."

The planning commission approved the change 9–1, but neighbors aren't convinced it will be in their best interest.

"When the NCOD passed we were excited because everybody came together to protect and help stabilize the neighborhood and give us protection for the future," says Octavia Rainey, a longtime neighborhooods advocate. "We had no idea this would come up. We trusted that the city has our best interest."

Even Raleigh residents who don't have a personal stake in New Bern-Edenton are worried about the precedent the change could set.

"Why should any neighborhood bother to get an NCOD if the planning commission can just override it?" asks Stef Mendell, who lives in Ridgeway, an older neighborhood that is considering applying for an NCOD. "Too many people in Raleigh's government are listening to developers and not reflecting what residents of neighborhoods want."

But Cullinan, a longtime resident of New Bern-Edenton, says excluding the townhome-ownership model because "people fear a domino effect" will be detrimental to the neighborhood and the city's middle-class buyers.

"It worries me that people will throw out a good idea because they're terrified of what happens five degrees removed," he says. "People ask me if the city lets this happen, isn't it poking a hole in a dam? But this is about homeownership. It may be the easier story to tell that it's a developer trying to change the rules to line their pockets, but not everyone is the big bad wolf."

Cullinan says his company will move forward with the townhomes no matter the sales model. And he says he'll continue to push for townhouse-ownership models elsewhere in the city because he thinks it's a "noble cause."

The proposed text change will go before the council on July 5.

This article appeared in print with the headline "Pandora's Box"

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