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Friday, April 23, 2010

Anthony Foxx Reneges On Affordable Housing Promise, Woos Developers

Anthony Foxx Proposes Fixing Low-Income Housing Rules, Sort Of

Charlotte Mayor Anthony Foxx, who says the city's current efforts to disperse Low-Income Housing have failed, wants Charlotte to offer Developers incentives to build public housing in areas where there is none.

Foxx said the City of Charlotte could allow Developers to build more houses or condos than zoning allows if they include Affordable units. He has also floated the idea of speeding up the permitting process and of offsetting their costs with taxpayer money.

Foxx said he doesn't support at this point requiring Developers to include Affordable Housing in their subdivisions or condo towers - a model that's gained traction in some municipalities nationwide, including Davidson, but would be met with intense opposition by developers.

Still, even the less-drastic measures pushed by Foxx will probably be among the city's most contentious issues this summer and fall. The council's Housing and Neighborhood Development committee is studying how to change the policy.

The city has debated how to best disperse affordable housing for decades, but most of it is still located in an arc surrounding uptown, from the airport to Eastland Mall.

"The current system is not working," said Anthony Foxx, a Democrat who campaigned in Charlotte last year on building more Affordable Housing.

Strategy had limited success

Last decade, the city mapped where subsidized housing should be located, labeling areas where public housing is concentrated as "prohibited," and steering it into "priority" areas such as Ballantyne, where none exists.

The idea was to limit the further clustering of Low-Income housing, which Affordable Housing Advocates say produces more crime and other social ills than dispersed housing.

But the policy has had limited success.

The Charlotte Housing Authority recently opened a mixed-income complex near Phillips Place, but that's been the exception.

Charlotte City Council members have issued at least seven waivers since 2003 in areas that already have such housing.

Developers proposing Affordable Housing have faced intense opposition in areas where no public housing exists.

In February, hundreds of Ballantyne residents opposed a proposal by the Charlotte Housing Authority to build 86 low-income apartments off Johnston Road. The area was classified by the city as a "priority" for affordable housing, but the authority pulled out of the project saying it no longer made economic sense.

Residents in Ayrsley in southwest Charlotte oppose a proposal by the Charlotte-Mecklenburg Housing Partnership to build 90 low-income apartments. That area already has affordable housing within a half mile, which means the council would have to approve a waiver for the project to move forward.

Last year, residents of Berewick, also in southwest Charlotte, opposed a plan to build affordable housing nearby. The partnership scuttled that project.

Offer Density Bonus

Three years ago, Housing Charlotte 2007, a combined city and community task force, said the city should explore giving developers financial incentives to include low-income units.

One incentive would be a "Density bonus."

A developer who was limited to, say, 22 units per acre might be able to get a handful of additional units if some were public housing.

Foxx said the city could expedite the permitting process for developers who include low-income housing. Another option would be to use money from the city's Housing Trust Fund to help builders comply with regulations that increase the cost of building, such as the city's tree ordinance and Urban Street Design Guidelines.

Affordable housing advocates have complained recently that the city's regulations have driven up the cost of construction.

He said he doesn't want to exempt affordable housing developers from the city's building regulations, however.

"My bias is not to create different rules for affordable housing," Foxx said. "If these rules have been put in place to create a environment that's sustainable, it would be hard to imagine that those sustainability principles wouldn't be as strong for affordable housing."

Bill Daleure, an executive with Crosland, said developers could be enticed by bypassing the city's regular rezoning process and by a density bonus.

"You'll always make less when you do the affordable housing," Daleure said. "But time is money. And if you don't have to go through a year of uncertainty of lawyers and hearings and costs, sometimes making a little less can be better."

He said the city could limit the incentives to affluent census tracts.

Collin Brown, a land-use attorney with K&L Gates, said offering incentives is better than requiring developers to include low-income housing. But he is skeptical that they would be effective.

Simply giving them money to recover lost revenue from low-income units might not entice anyone, especially because it would involve additional red tape, he said.

"If the city were to cut a check, and that were coupled with incentives, you have a reason to go through with it." Brown said. "At break-even, who would do that?"

Brown also was skeptical about a density bonus.

Uptown Charlotte has few height restrictions, so developers wouldn't gain anything, he said. Along the Lynx Blue Line, the city offers a bonus to encourage high-density development near stations.

Pat Mumford, who heads the city's Neighborhood and Business Services, said he doesn't know of a developer who has used the transit-line density bonus since it was approved last decade.

Brown said a density bonus could work in the city's most exclusive areas, such as Myers Park, where land is expensive and the city has limited the density.

"Imagine Myers Park or Eastover," Brown said. "A developer would say, 'If I could get additional units, land might be worthwhile.' Of course, then you'd have the whole NIMBY thing."

The Myers Park Homeowners Association is lobbying the Charlotte City Council to approve height restrictions along Selwyn Avenue.

And Brown said building more low-income housing in those areas might be a symbolic victory, but it would only be a "drop in the bucket" considering the city's needs.

Inclusionary Zoning

One way to ensure that low-income housing is dispersed is to make developers include it, even in affluent suburbs.

Montgomery County, Md., an affluent Washington D.C. suburb, is considered a leader in the movement. Montgomery allows builders to "buy out" of building affordable housing, creating a pot of money to fund additional low-income projects.

Danillo Pelletiere, research director for the National Low Income Housing Coalition in Washington, D.C., said last decade's housing boom led to a growing number of cities passing inclusionary zoning.

Skyrocketing housing prices made more people sympathetic to helping people secure housing, and developers were willing to accommodate additional regulations because they were making big profits.

"During the boom, people want to build, and they want to build quickly," Pelletier said.

He said inclusionary zoning can work best in high-growth, affluent areas.

Davidson, the prosperous college town in northern Mecklenburg, started in 2001 making developers set aside 12.5 percent of residential units for affordable housing.

In a neighborhood or condo project with 40 units, one unit would be reserved for a family of four making 120 percent of area income, which is $79,800.

Two units would be for a family of four making 80 percent of the area income, and two would be for a family of four earning less than 50 percent of area income - $33,250.

Cindy Cline Reid, the town's affordable housing coordinator, said the nearly decade-old ordinance hasn't been controversial. She said the town met early with developers, who helped shape the policy, a move she said is critical to making the zoning work.

But she said the town's demographics have also made inclusionary zoning easier.

"Politics has played a role," Reid said.

There don't appear to be enough votes on the Charlotte City Council to introduce inclusionary zoning. Foxx, for one, said during last year's mayoral campaign that he didn't support it.

Democratic Council member David Howard is an executive with the Charlotte-Mecklenburg Housing Partnership, which works with private developers to build workforce housing. He is against inclusionary zoning.

"Before we need to go into anything mandatory, we need to explore other options," Howard said. "I'm a carrot guy, not a stick guy."

Mumford, who was a council member when incentives were discussed and not approved last decade, said city staff probably won't make a recommendation as to how the location policy should be changed.

But he said the city needs to do something, to prevent intense fights such as the ones in Ballantyne and Ayrsley.

"We can't continue this process of engaging this level of debate with every project," Mumford said. "There needs to be some consistency from a policy perspective."

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Sources:, McClatchy Newspapers, WBTV, WCNC, Youtube, Google Maps

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