Mark Zimmerman: Another blow to affordable housing

August 9, 2013 

Mark Zimmerman


It’s been a while since lower-income people could afford to buy a home in Chapel Hill. Now it’s getting hard for them even to rent a place. Only a real shift in planning and development priorities will stop the trend.

Chapel Hill has been fighting a losing battle keeping homes affordable for low-income families. Sooner or later the market forces of supply and demand win out. When supply is restricted in a desirable community, prices push higher. The average home sold in our area this year is $367,000, which is 53 percent and 89 percent higher than Raleigh and Durham respectively. In June, area median home prices rose 7.6 percent. It’s no wonder that affordable housing in Chapel Hill is becoming an oxymoron.

Fortunately, as a university town, Chapel Hill has also enjoyed plentiful and diverse rental housing stock. In the past, you may not have been able to buy, but you could find someplace to rent. Unfortunately, that may be changing, as similar market forces are now affecting apartments, too.

Across the country, homeownership is at an 18-year low. Recession induced foreclosures, short sales and other credit problems have forced many former and prospective homebuyers to become renters. At the same time, many otherwise qualified potential first-time buyers are choosing not to own. They are either wary of real estate, uncertain about their future or prefer to stay mobile.

Those dynamics are increasing demand for apartments, which is driving up rents to record highs. That makes rental property more valuable. Older apartment complexes become ripe for renovation, making them much more profitable but too expensive for most former residents.

We’re already seeing that happening here. Plans are in the works to upgrade the former Colony Apartments on Ephesus Church Road. As a precursor to the project, the property stopped accepting Federal Section 8 rent vouchers. More recently, General Services Corp. announced it will no longer take Section 8 dollars in its nine currently low-income apartment complexes around the community. They, too, plan to renovate and raise rents. In the past year, several other large rental properties have changed hands for premium prices. We should expect rent increases in those, too.

Anticipating this trend, Chapel Hill Mayor Mark Kleinschmidt appointed a Committee on Affordable Rental Housing, which has had several meetings to put together a strategy to help preserve, or provide, more affordable rentals.

It is a challenging task. The committee has heard from local private developers and successful Triangle low-income rental specialists that its development costs and process stop investment in low-income housing in its tracks. Tax credit money to finance low-income apartments is scarce. Willing nonprofits would need heavy ongoing public subsidies to keep rents low, something Chapel Hill hasn’t been willing to fund on a broad scale.

The committee wraps up its work this month and will issue a report to Council on how to address this growing problem. Hopefully, that will open a frank discussion on the burdens this community places on new construction. Right now, developers are asked to pay for public green space, transit improvements, public art, storm water abatement and a myriad other issues. Leaving aside the issue of how much public benefit a private developer should shoulder, the expense is staggering. Add the time and uncertainty of the special-use permit process and it’s no wonder we can’t build affordable housing.

If we want a diverse housing stock – owner occupied or rental – to be part of Chapel Hill’s future, we need to reduce the cost to develop and streamline the process dramatically. That will mean re-prioritizing the requirements to build here. If we don’t, then maybe it’s time to admit we’re telling those with less wealth that they have to move on to other areas, and Chapel Hill can move on to become the privileged part of heaven.

Mark Zimmerman lives in Chapel Hill and owns a real estate business here. He can be reached at and @markrzim.

Chapel Hill News is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

Commenting FAQs | Terms of Service