RaleighForward Roundup | Volume XXIV

Articles we found interesting this week:

1. Efforts to eliminate exclusionary zoning like Raleigh’s Missing Middle reforms continue picking up steam across America. This Axios article discusses some of the most recent efforts, particularly at the state level. While momentum is building, the reforms continue to generate controversy. Here is an article about cities in Colorado opposing a legislative proposal that limits local government authority to maintain exclusionary zoning.

2. Continuing with the regulatory reform theme, here are 2 academic journal articles exploring how land use regulatory reforms can improve housing affordability. Article 1 and Article 2.

3. Wake County Commissioners heard from staff regarding the results of a scientific poll of County residents. Their top concerns were the cost of living and housing affordability. The survey asked nearly 50 questions, so there is plenty more to explore. Here is a link to the full survey. 

4. The median price of real estate in Wake County increased by $10,000 in March to $445,000. Here is a link to the press release. And check out our 12 month tracker on the RaleighForward data page.

5. Here is a great resource that tracks parking reforms across the Country. 

6. As the struggle to address housing affordability continues, here is an article about how one city is redeveloping a public housing community in New Jersey. This is particularly interesting as the Raleigh Housing Authority embarks on the redevelopment of Heritage Park.

7. The Urban Institute released study findings this month showing that planning boards/commissions across the country lack diversity. The findings show that renters, women, people of color and service workers are severely underrepresented. 

8. There is growing interest in 3D Printed Concrete houses. Though this housing type holds promise, there are obstacles that need to be addressed before 3D printed homes become a practical housing option. Here is an article exploring those barriers.

9. Looks like rental supply is finally catching up with demand. According to this Bloomberg article, this rebalancing is starting to be reflected in lower rents (at least in a few US cities).

10. Montana’s legislature passed several bills to encourage missing middle housing that might be of interest to other states looking to reduce the impacts of exclusionary zoning. Read about it here.

Council Meetings and Other Items of Interest:

1. City Council held a work session on April 11, 2023, to explore housing affordability in Raleigh. Staff’s presentation demonstrated the complexity of the problem, as well as the difficulty all cities face when trying to tackle housing affordability. During the meeting, some of the newly elected Councilors clearly struggled with the reality that Raleigh has been fairly successful keeping housing relatively affordable when compared with its peer cities across North Carolina and across America. We encourage you to watch the video replay of the meeting because it provides a clear illustration of the difference between activism and governing.

   The main takeaway from the presentation is that there are no simple solutions to housing affordability. According to the presentation, creating affordable housing for people making 60% of the Area Median Income requires a direct subsidy of $159,000.00 per unit. Even a 100% density bonus only reduces the needed subsidy by $15,000 to $144,000.00! That subsidy must come from somewhere. Usually, it ends up being a combination of tax credits, additional direct subsidies all combined within a mixed income community which helps spread the remaining subsidy across a larger number of unsubsidized units.

   The presentation also addressed the limitations of inclusionary zoning. One fairly startling statistic included in the report noted that 33% of US cities with inclusionary zoning programs have produced NO affordable units. Even where an inclusionary zoning ordinance has produced units, the program led to additional increases in rent for the broader community. Staff pointed out that Chapel Hill has enforced an inclusionary zoning ordinance since 2015. During that time, it produced only 24 affordable units and fees in lieu of payments of $995,000. Looking beyond the questionable legality of the ordinance, Chapel Hill remains one of the least affordable cities in North Carolina despite its inclusionary zoning ordinance.

   The meeting provided an interesting opportunity to observe the newly elected Councilors struggle to reconcile campaign activism with the obligation to govern. Those that fail to effectively transition from activism to governing may find it harder to earn a second term from voters. Two-year terms leave very little time for Councilors to demonstrate their ability to govern and bring about changes that benefit their constituents.

City Council meets on Tuesday, April 18, 2023. There will be public hearings during the afternoon and evening sessions. Here are the items of particular interest:

1. Council will discuss the Recommendations of the Study Committee on Terms, Compensation and Voter Engagement during the 11:30 am work session. The Study Committee was appointed by the prior Council and submitted a final report to Council on September 7, 2021. That Council implemented the compensation recommendations, along with several recommendations related to voter engagement. Though the Study Committee recommended moving elections to even years, the North Carolina General Assembly made that change before Council had time to act on that particular recommendation. 

   There were two other remaining recommendations from the Study Committee report that the prior Council did not adopt. One was to transition from 2-year election cycles where all Councilors are elected every two years to 4-year staggered election cycles. The other recommendation was to increase the size of Council from 8 to 9 members by adding a new at-large Council seat. North Carolina state law allows all cities to make these kinds of changes. Council can vote to make these modifications after a public hearing much like any other ordinance. Alternatively, Council can put the issue on the ballot for the voters to decide as a referendum. Even if Council chooses to make the changes through the ordinance process, citizens retain the right to force the decision onto the ballot via referendum by gathering 5,000 signatures. As the Study Committee’s report notes, the vast majority of peer cities in North Carolina and across the Country have an odd number of Councilors to avoid gridlock. Moreover, most also have 4-year terms. Charlotte’s Council is scheduled to take a preliminary vote on May 8, 2023, to start the transition from 2-year to 4-year terms.

2. We wrote earlier this year that Raleigh and Wake County were in the process of completing disparity studies. Raleigh’s Disparity Study is now complete and Council will receive a report summarizing the findings, which are not surprising. Like most local governments, the City needs to do a better job finding ways to work with local women and minority-owned businesses so they are better-positioned to succeed when bidding on City contracts. The final report sets out numerous recommendations that should improve the City’s performance. While there is much work to be done, completing the disparity study is an important first step. 

3. Next up, there are a few zoning cases worth noting. First up is Z-75-22, which has been delayed because District E Councilor Jones is using it to make a point about pedestrian and traffic safety. While traffic and pedestrian safety are important, using this particular zoning case to make the point seems shortsighted. The request seeks to rezone approximately 2.3 acres from Residential-4 to Residential-6. Under the current Residential-4 zoning, the owner could build 16 houses while the requested Residential 6 Conditional Use district would allow no more than 25 townhouses. Those 9 additional townhomes are not going to generate any significant increase in traffic or undermine pedestrian safety. Here is the link to the agenda package. 

4. The last zoning case of note is a continuation of the public hearing for Z-87-22 which seeks to rezone just under 2 acres located along W Davie between S McDowell and S Salisbury St. The applicant seeks to go from Downtown Mixed Use 20-stories to Downtown Mixed Use 40-Stories with Conditions. Planning Commission voted 9-0 in support of the case. Since the public hearing, the applicant added a condition requiring a $100,000 contribution for affordable housing in the City. 

   An ad hoc practice like this raises serious legal questions for the City. Without some sort of objective formula tied to an approved plan and specific impacts caused by each proposed development, these kinds of one-off conditions may become easier to challenge in court as time passes. As much as they may appear to be “voluntary,” if it becomes a regular practice of this Council to deny rezoning cases unless a contribution is made, it will not be difficult for lawyers to prove in court that these contributions are effectively mandated in order to get a rezoning approved. Additionally, the City may need to create a transparent tracking system in order to prove how each contribution was used for affordable housing purposes. Time will tell. Here is the link to the agenda materials. 

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