Council Eases Stranglehold on Housing Market

February 5, 2015 Asheville , City - County Gov. , Columnists 3389 Views
Council Eases Stranglehold on Housing Market

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Probably the most important finding was that Asheville’s rental housing is maxed out, with vacancies around 1 percent for market-rate units and a waiting list for subsidized housing. A vacancy rate of 4-6 percent would be healthy. Bowen projected by 2020, Asheville would need 3580 more rentals and 3789 more mortgaged homes. A large portion of housing will have to accommodate special needs for the aging population.

Councilman Gordon Smith considered the findings a mandate for government. He argued, “The overarching message that I hope everyone takes away from this is that we’ve got a very stark economic reality, and an affordable housing crisis that is going to grow and worsen without very bold steps from this council as well as the ongoing efforts of our regional partners.” As a member of council’s Housing and Community Development Committee, he would be highly involved with the “heavy lifting” required to define and achieve target housing goals. “It’s going to take a lot of brains for us to come up with those goals that are both realistic and ambitious,” he said.

Smith reviewed some tactics council is considering. They include continuing to evaluate existing ordinances and offer incentives, like the recent expansion of density bonuses for construction in harmony with council’s strategic goals; issuing RFP’s for housing on city-owned land; land banking whereby the city or its agent will acquire and resell housing en masse; and converting Lee Walker Heights into a mixed-use, mixed-income community. Other proposals consist in straightforward deregulation, such as lowering minimum sizes and allowing more accessory housing.

Mayor Esther Manheimer asked how unique Asheville’s problems were, and Staudinger responded only with euphemism, for which Councilman Marc Hunt kept requesting translations. Staudinger said the consultants found Asheville “unusual in that we’re not having a market response to this broad spectrum of housing needs.” That was caused by “what we all know to be constraints to our growth,” which translated to “limited land availability to build a large number of units and garner an economy of scale.” Staudinger mentioned that in the Piedmont and in Austin, TX, new subdivisions are going up and offering homes at prices between $125,000 and $160,000. In Asheville, one is lucky to find a used home under $200,000.

Hunt prompted Staudinger to elaborate on how increasing the housing supply at any level would help with the current problem. They spoke briefly, but not enough for everybody on the board to comprehend that when housing stock at any price is increased, suppliers have an incentive to lower prices to make their units more attractive than similar units on the market, thus pricing those units within reach of more people, and the process iterates to a point of diminishing returns. Of Asheville, Staudinger simply stated, “It is a seller’s market, not a buyer’s market.”

That was the lecture. Next came the test. On the agenda were two rezonings requested for large apartment complexes. The first offered 309 residential units, five live-work units, and 9742 square feet of retail space fronting Fairview and Stoner Roads. Plans had been revised repeatedly, and meetings had been held to solicit neighborhood input. In response, the developer agreed to rent-control 7 percent of the units at Affordable rates for ten years. 80-85 percent of the remaining units would be offered at Workforce rates. By way of review, “Affordable” is defined as less than 30 percent of the wages of somebody earning no more than 80 percent of Area Median Income; “Workforce” is the same for somebody earning between 80 and 120 percent of AMI. The developer also promised to build sidewalks along Stoner and Fairview roads and give the city $50,000 to spend as they please on pedestrian safety.

Former mayor Lou Bissette spoke on behalf of the developer. He said his client had been working with city staff for a year. They had changed the design more than twenty times in response to input from city staff and neighbors. The project was in many ways consistent with council’s vision for the city: high-density, infill, low-income, residential development near a transit line and within walking distance to some of the region’s largest job creators. What’s more, the land’s assessed value was $593,700; the owner was paying $7000 a year in property taxes. The developer was prepared to invest $25 million improving it, so it was not improbable that the new assessment would give the city $294,000 a year to spend on council’s visions.

Project engineer Will Buie told how the parcels in question were topographically-challenging. In fact, he believed that was why the last developer abandoned the site. Elevations varied by 70 to 80 feet along Fairview Road, 30 to 40 feet along Stoner Road, and 100 feet through the most dramatic cross-section; and so any sizeable development would require some form of retaining walls. To mitigate the visual impact, the walls were redesigned with greater setbacks, terracing, and buffers. Buie said he was confident they would be safe. He added that providing pedestrian connectivity was somewhat difficult, as it would involve a railroad crossing. Even if a right-of-way were procured, he had no expectation the railroad would be casual about liabilities.

Neighbors expressed concern about traffic jams and pedestrian safety, insufficient public amenities, insufficient rent controls, retaining walls that were not just imposing but monstrously terrifying, and tall buildings. A valid protest petition had been filed. Dana Davis of Oakley argued, “You know the research, and you know the city’s own study recommends 20 percent of all new development should be affordable housing. I ask you to take a stand here and now to ask Flournoy [the developer] to dedicate 62 units to affordable housing, indefinitely. If you’re concerned the developers will walk away, don’t be. There will be another behind him. The market has turned significantly, and this is prime real estate. Also, once this development is built, the land will be gone. It will no longer be available for a developer who will provide more affordable housing.” She closed asking, “Is the increased tax revenue of $294,000 worth someone’s life?”

Patsy Brison, representing a couple neighbors, argued, “This is not really a mixed-use project. This is an apartment enclave with some token retail space.” She further charged, “There are critical legal and procedural problems with this application.” Brison claimed the parcel was conditionally-zoned in 2007 and 2004, and since construction was not commenced within 24 months of site approvals, the city’s code requires it to revert to its previous designation, which would be Commercial Industrial. All notices posted pertaining to the project were, therefore, flawed, and thus the developer should be compelled to return to square-zero in the city’s design review process. If the city were to deem that insubstantial, the project violated another city code. A change to the UDO approved last December decreased the maximum number of units allowed per acre in CI zoning from 16 to 8 units. Bissette’s project called for 64 units per acre.

Brison had six more complaints: (1) The project did not meet standards for the Urban Place zoning it was soliciting; it fell short of requirements for entryways on two of its buildings. (2) The square-footage of retail space was tweaked ever so slightly upward from its previous rejected value. (3) The traffic study was flawed in that it omitted consideration of the proposed retail uses, and it did not integrate accident history into the analysis. (4) The retaining walls were unsafe and in need of financial guarantees should council approve them. (5) The developer did not meet with her client as claimed. Instead, “Someone called her on the phone fishing for how much she might want for her property,” said Brison, “and I am ashamed that Mr. Bissette said that.” And lastly, (6) the project did not comply with visioning plans adopted by the city.

Borrowing language from Bissette, Brison said the project was a poster child, but one of “how not to scar and mutilate our beautiful scenery around here.” Calling the proposal, “one of the worst projects I have seen,” she said if council approved the plans, it would not only be violating the city’s codes, it would be inviting serious legal challenges.

Brison positioned herself to be the last to speak before the public hearing closed, but Bissette begged a rebuttal. First, though, he wished a word with the city attorney. With all due respect to Brison, he accused her of throwing stuff at the wall with the hope something would stick. For the past year, his client had been gloriously riding along on the assumption that city staff had correctly represented the parcel’s zoning. He reminded council of the city’s housing shortage, and said infill development typically involves taking on the challenges that have caused the land to remain undeveloped. His client was more than generous with his time and resources in trying to work with neighbors. The complaints that had been lodged about Fairview Road “were not of the developer’s making.” Lastly, he leveled that Brison had misrepresented the telephone conversations, and one Mr. Wilson, who made the calls, was present to tell his side of the story.

In the interest of inviting due diligence, Smith found it “unfortunate [the allegations] were dropped at the eleventh hour.” Council was overdue for a scheduled closed session, during which Bissette was told he could have his word with Robin Currin, the city attorney. But some issues could be resolved quickly. As for the zoning, Interim Planning Director Alan Glines said the parcel was zoned Urban Village, which is not a conditional zoning as alleged. UV zonings are general-use with no reversionary provisions. Presenter Jessica Bernstein said the requested mixed-use zoning imposes no minimums on retail or other uses. Currin said a recent amendment to the UDO grants council leeway to make requirements for conditional zonings, like the one before them, more or less rigid. Expanding on Buie’s observation that the existing zoning was oblivious to sizeable topological constraints, Hunt and Bernstein clarified that something somewhere had to break. On lesser matters, Currin said whether or not the project complies with plans is open to subjective determination, and not subject to judicial review, and the traffic study is more advisory than legally binding.

After the break, Currin said staff had researched the matter, and felt safe with their previous conclusions. Any gray areas remaining would typically be addressed through the board of adjustment or an appeals process and not a court of law. When asked if he had anything he cared to add, Bissette said his client wanted to be a good citizen, and so he was willing to dedicate $200,000, instead of$50,000, for sidewalk connectivity. This sold Councilman Chris Pelly, who said $212,000 would be sufficient to build up to development at the railroad tracks.

Hunt and Smith had differing opinions about the degree to which the increase in housing would help Asheville’s poorest. Hunt supplied a basic economics argument, but Smith spoke as if rigid lines divided different levels of housing income. He said, “If we load up the lifeboats with the middle class and leave everybody else behind, then we’re doing it wrong.” Hunt added that failure to build in the city would lead to sprawl. Bothwell read from the UDO, suggesting the developer chose an UV zoning more for a numbers game than to comply with the spirit of the law. Urban Villages, he read, were intended for revitalization of blight with mixed-use activities to engage pedestrians. Only Bothwell voted against the proposal, so it had the supermajority necessary to override the protest petition.

Approving the next apartment complex was a breeze. It offered 168 units at rents between $900 and $1400/month. By that time, speakers had become flippant. Bissette, who was serving as legal counsel for this client as well, took the microphone and said, “I hope I don’t fall over here.” Engineer Chris Day told council with a straight face, “We have no proposed perimeter retaining walls.” When Mayor Manheimer invited members of the audience to council’s retreat Friday, Bissette shouted, “I’ll be out of town!” and Hunt shot back, “You should run for mayor!”

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