Dowling: affordable housing policy not working

Olderwiser, you can refer back to a number of these stipulations throughout the years to see where the money goes.
For instance, here's the language from agenda item 4b on 6/8/2009 (http://townhall.townofchapelhill.org/agendas
/2009/06/08/4b/4b-memo-housing.pdf [PDF] )

On January 26, 2009, the Council endorsed an $85,000 one-time payment to the Town’s Affordable Housing Fund as a payment-in-lieu of providing a single unit on site at the Marriott Residence Inn located on Erwin Road as a minor change to the existing affordable housing stipulation in the Special Use Permit.

On May 21, 2007, the Council approved a Special Use Permit for the Chapel Watch Village project that included a stipulation that the applicant provide a $300,000 payment to the Town of Chapel Hill Affordable Housing Fund. The stipulation further states that the payment would be made in five installments of $60,000, with the first payment to be provided to the Town’s Affordable Housing Fund within 6 months of the issuance of a Zoning Compliance Permit, and the remaining five payments shall be made every six months thereafter. The Zoning Compliance Permit was approved in July 2008.

I've been clear about my position on in lieu payments for several years.

It is cheaper and will address our current housing gap sooner if we accept square footage now instead of in lieu monies.

I easily accept that there are exceptions and that in lieu payments make great sense in some situations. If you review the Town's track record, though, I believe it is pretty clear there is a reliance on in lieu payments, that the Town relies on that cash flow and over time it has become a regular occurrence rather than an occasional exception.

Claudius, your right, Robert did ask for in lieu monies (I was there, by the way).

As Robert said then, and as was reported in the press later, he provided several reasons, two of which I highlight here:

One, to help fund the OCHLT efforts to recondition existing housing.

This is a long term problem the Council has known about for the last 5-6 years but hasn't squarely faced yet. Unfortunately, the Council had an opportunity to set aside funds starting 4-5 years ago to address this issue but didn't (I've lobbied for creating a reserve drawing some of its revenue from general funds, a move that will provide a predictable cash flow).

Two, because he said they would have difficulty managing a large influx of housing stock.

Again, I see this more of call to strengthen our management team and deal with a policy problem than a reason for accepting in lieu payments.

As a policy we should be working to meet the needs of a diverse purchasing public. This requires some innovative and flexible strategies and, possibly, even the willingness to allow some units to be built off-site.

Obviously these units aren't selling because the population they were supposed to serve isn't stepping up and purchasing the housing product the Town's current policy encourages. Whatever Council was trying, it appears that not enough families of modest means are interested in small units underneath million dollar condos.

In terms of management, if Robert's team doesn't have the capacity to manage the housing stock, we need to re-evaluate our current process and see what we can do to improve management capacity - not shrink the pool of available square footage.

Again, at the core, deferring actual housing now, taking in lieu monies instead, means that our affordable housing stock doesn't grow to meet future needs and almost guarantees that any future square footage will be smaller than what developers offer today.

Claudius, you appear to have followed what Council has been doing, so you must be aware that there is a pattern of taking in lieu monies over actual housing.

Here's another $205,000 from June 2009: http://townhall.townofchapelhill.org/agendas/2009/06/08/4b/4b-memo-housi...

Here's the 2008 housing gap analysis:

http://www.ci.chapel-hill.nc.us/Modules/ShowDocument.aspx?documentid=700

Overhauling our affordable housing program at this point in time might seem daunting and overwhelming. I argue, though, to continue, even with "tweaks", doesn't position Chapel Hill well to meet our current and new citizens need for affordable housing.

Let's be honest with our citizens.

First, be clear what %15 affordable housing means.

A good first start would be to list all the development projects the Town has said had a %15 (or in East54's case, %30, now %20) affordable housing component and see how many units, how much square/footage and how much in lieu money flowed out. By my calculation, depending on how far you go back, %10-12 units is not uncommon.

Second, be clear what the in lieu monies are funding. Is it going into the revolving land/housing acquisition fund, grants/deferred loans, rehabilitation or operations?

This data is available but not easily collated. And, of course, Robert's efforts are just one part of the Town's effort to meet our affordable housing needs.

Third, be clear on our objectives and provide an independently verifiable measure of our current policy's success or failure.

Just saying we have X number of units, which is usually what is trundled out, is not satisfactory.

Getting 100 units when we could have 400 is much different than getting 100 when we could have 120.

If you review the type of housing the Town is sponsoring on Lot $5, it is hard not to conclude that the demographic is out-of-town weekenders, investor landlords, housing for students from families with the wherewithal to purchase $500K++ units, young professionals working in RTP, etc.

Remember, this was our Town's own project. That demographic doesn't quite fit with what the Council advertised as the putative purpose for Lot $5/

Again, I'm not surprised that the OCHLT is trying to engage student purchasers at East54. The units seem to be tailored for that market.

This would be fine if the Town had been clear that this was the target market for our own housing on Lot $5 and for the affordable housing effort at East54. With a clearer explanation our citizens could weigh in on that policy decision.

Finally, be clear that the folks currently managing the stock are having difficulty expanding capacity and maintaining the quality of the current affordable housing stock within their current budget.

The situation isn't so dire that we need to start completely over. The Town, OCHLT and others have learned some valuable lessons along the way including mechanisms to make affordable housing more self-supporting.

For instance, with East54, there's a transfer fee mechanism that will help defray future rehabilitation costs. That mechanism can be adopted elsewhere.

The current demand on the rehabilitation fund is not so keen, at least as far as what the Town reports, that we don't have time to build some reserves out of the general fund (a consistent source of funding).

Our Council and Town staff need to assist Robert and his crew in expanding their efforts without jeopardizing the program, over-extending the budget, etc. We have a lot of talented management folks in Chapel Hill that I'm sure we could call on to make accepting the maximum possible square footage the norm over taking in lieu monies.

Claudius, I'm glad this came up now because it provides our community an opportunity to review where we've been and discuss, frankly, how we should achieve our future affordable housing goals.

Affordable housing in the future will not be successful if it relies on the "little mansion" model of housing that we've all been raised on.

Some kind of co-housing cooperative model is what will work. In fact, that is the housing of the future for those below a certain wealth line anyway.

 Absolutely right - low-income people need space to garden, repair stuff, etc.