Lloyd Farm Is Only “Doing The Wrong Thing Better” And Should Be Voted Down

Posted on October 22, 2018 by patrick

One of Canada’s leading urban planners, Brent Toderian, shares this slide with communities he consults in to spur discussion:

As the Carrboro Board of Aldermen contemplate the Lloyd Farm proposal Tuesday evening (10/23), they should know that they are clearly dealing with a case of Doing The Wrong Thing “Better.”

Despite years of discussion, the principal flaws of the Lloyd Farm proposal remain the same.

A Missed Economic Opportunity

We need to maximize our tax value per acre on parcels in Carrboro to better balance our commercial and residential tax base, and that means building up in a denser format. An urban grid with rectangular or square blocks makes redevelopment much easier in the long run.

Instead, Lloyd Farm gives us the limited value proposition of the Timberlyne Shopping Center and its strip mall-plus-outparcel format. Joe Minicozzi from Urban Three found that suburban Timberlyne produces a tax value of about $950,000 per acre while the taller, urban format Hampton Inn in downtown Carrboro produces over $33 million per acre.

A Missed Design Opportunity

The two most damaging design features of this proposal are the curvilinear road running through the site, and the poorly placed stormwater ponds that will make creating urban blocks on the site financially challenging or impossible for future redevelopers.

One needs only to view Durham’s Patterson Place in Google Maps to see how a suburban site can be laid out in a grid-like fashion to be infilled later. Twenty years after it was first developed, the Durham Planning department is doing exactly that, and a five-story Duke Medical office building and a Springhill Suites hotel are the first signs of a new, more vertical, higher tax-base per acre urban future at Patterson Place.

A Missed Housing Opportunity

Carrboro will not address its housing cost challenges without building significantly more new units, many of which could be built on such a large site. It’s also disappointing to see only senior housing being proposed. While there are housing needs for senior citizens in Carrboro, it is worth noting that older Americans are generally wealthier than everyone else.

Furthermore, the Town’s economic analysis indicates that the vast majority of the jobs expected to locate at Lloyd Farm will earn less than $15/hour, and are professions that are generally held by younger people. This proposal could have contained a significant number of micro-units in the 400 to 600 square foot size range so that people who worked at Lloyd Farm could live there, too, and walk to work- helping us be more inclusive in our housing while also reducing traffic.

So Where’s The Better?

The developer has made some changes to the original proposal. Getting buildings on the north side of the grocery store parking field may help that part of the site transform one day, and the addition of more floors of office space is better than those remaining one story buildings.

But while there is also a public gathering space/amphitheater designated, it does not have a real connection to the uses that would help activate it- the restaurants and retail. Instead, it is closest to the parking lot of an office building, and separated from those potentially synergistic uses by the beating heart of this proposal- the massive parking field for the grocery store.

Years of discussions have not changed the fact that the developer is basically following the punch list of a chain grocery store for their preferred suburban layout, where they work from the assumption that everyone always drives to the store, and that there’s no need to push back against that norm to do something better. This is the wrong thing to do in the 21^st century.

Carrboro cares about equity, works hard to make transportation choices possible, worries about how to grow the commercial tax base, and proclaims a desire to make a difference in a world where the IPCC just told us we have about 12 years to turn the tide on climate change.

Carrboro can do so much better, and it should. The Aldermen should reject this proposal and immediately get to work on a comprehensive plan to help guide developers toward those better outcomes. If you agree, shoot an email to boa@townofcarrboro.org and let the Aldermen know.

Carrboro Advisory Boards Should Push For Gathering Space at Lloyd Farm

Posted on June 2, 2016 by patrick

Tonight, at 7:30 pm in Town Hall, the various Carrboro Town Advisory Boards will meet to review the Lloyd Farm rezoning proposal before it goes to the Carrboro Board of Aldermen later in June. This site represents a significant opportunity to do something compelling or make a lasting mistake for Carrboro.

All in all, Lloyd Farm is a mildly better than average suburban strip mall concept with a bunch of single story buildings surrounding a large parking field fronting a Harris Teeter. The “better than average” points come for significantly more attention to bike/ped mobility through the site than is usually present in proposals like this. That said, here are the key problems with it:

The layout is driven first and foremost by traffic engineering concerns; the two drive-thru parcels are particularly awful.
The green “Plaza Lawns” are located in places that almost guarantee they will never be used as public spaces.
No multi-story buildings on a large site that could accommodate them and surface parking
Too small a residential component for a town struggling with increasing housing affordability challenges

I’m not sure the last two are going to be addressed at this point in the game, so I’m going to focus on ONE MEANINGFUL CHANGE that could significantly improve this project.

Re-Configure the Lawns and Parking to Create a Gathering Space, So That There is An Urban Core to a Suburban Site

The image above is the most recent site plan with a few minor changes:

It removes the 7,810 square foot building in the curve of the road, and places parking there instead. (Blue circle)
It moves the square footage of those buildings into two buildings that front a place reminiscent of the the Weaver Street Market Lawn among several buildings. Just as people can walk into the center of Southpoint Mall’s primary walkway between Barnes & Noble and the Apple Store, you could do the same between these two buildings. Harris Teeter would still have a massive parking field out front, albeit in a slightly different shape than they are used to. If they can build a two-story Harris Teeter at North Hills, they should be able to handle this.
The public space allows for more urban cafe-style dining fronting a space for people rather than a space for cars. This could be accomplished with greenspace, hardscaped space like a brick plaza, or both. Ideally I think the developer could steal brick and planting design cues from the UNC campus, and then allow for dining along both sides of the space. The Piazza at Schmidt’s development in Philadelphia strikes this balance well, see below:
This closes the movement of trucks from behind Harris Teeter to the road with the bus pull-out closer to the apartments. Trucks will then need to make a 90-degree turn in front of Harris Teeter and then head north to the road to go left towards Old Fayetteville Rd, or somehow move south of the public space and adjacent retail and exit that way.
Finally, this move does take some retail away from the terminus of the greenway coming from Carol St. I understand how if I was coming from Carol Street, I would find this a bit of an aesthetic loss. However, I think that transition by walking and biking can be made reasonably well if there is also a greenway east of the bioretention area (PURPLE dotted line) that leads to the crossing near the proposed bus pullout. This consolidates crossings from the two directions that pedestrians and cyclists may arrive near a potential bus stop, and give them the smallest amount of parking lot/road combination to cross to reach the stores and the public space.

This Site Needs More Housing, For ALL Ages

It’s also worth noting that there’s just not enough housing being built on such a large site. Carrboro is not going to be able to address its rising housing cost challenges without building new units. Although there are 200+ new units here, this site can accommodate many more, and more stories of height over podium parking. Additionally, it’s disappointing to see only senior housing being proposed. While there are clearly needs for housing for senior citizens in Carrboro, since the Board of Aldermen proposed to look at every decision through the prism of equity at their annual retreat, it is worth noting that generally speaking, older Americans are generally wealthier than everyone else. The chart below shows the median net worth by age in the USA. The data is from the Census Bureau in 2015 via an article at the financial planning website fool.com. Given this distribution, it is hard for me to see how we can talk about equity in a complex that doesn’t allow people under 55 to live there.

One Chance to Get This Right

In closing, I strongly recommend that the advisory boards to be energetic in encouraging the Lloyd Farm development team to use this opportunity to provide a special place on the edge of Carrboro. Not only do I think this concept of a gathering space would garner them more support for approval, I think they’d actually get higher rents! I suspect that the primary pushback will be about their anchor tenant (Harris Teeter) and expectations regarding parking. If they are getting roughly the number of spaces they expect in view of the front door of the store (as my proposal above provides) I think they should be willing to compromise.

Chapel Hill News Describes Very Typical Carrboro Infill Project as “Unusual Density”

Posted on May 31, 2016 by patrick

There are a few rezoning hearings coming up at the Carrboro Board of Aldermen meetings in June. One of them is a project called Inara Court, slated for 102 to 104 Fidelity St, which is right behind the O2 Fitness property, on the same side of Fidelity Street. I am very familiar with the area as I previously lived at two different addresses on Fidelity.

CH News Reporter Jean Bolduc’s description of the project in the paper was strange, stating:

The Board of Aldermen will hear from residents this month about a plan to build six homes on about a half-acre on Fidelity Street, behind the O2 Fitness Club. The infill project offered by Yates-Greene, LLC is classified as an “Architecturally Integrated Subdivision,” which would allow for the unusual density of so many homes on so little land.

The math here is pretty straightforward – six units on 1/2-acre of land yields 6/.5 = 13 dwelling units per acre. Is this “unusual” in Carrboro? I did some quick checking in Google Earth with the polygon tool to measure acreage, then counted units using Google Streetview.

Literally directly across the street is White Oak, a condo complex built in the early 1980s with 96 units on about 6.1 acres, or roughly 16 dwelling units per acre.

Immediately next to White Oak, also on Fidelity Street, is Village Square, with about 26 units on 2.4 acres, or roughly 11 dwelling units per acre.

At the end of Fidelity Street at the intersection with Davie Rd, there is Fidelity Court- with 72 units on about 4.5 acres or again, 16 dwelling units per acre.

Just north of the O2 Fitness and Looking Glass Cafe, there is the 605 West Main building, which if you ignore the two floors of commercial above the parking, sports 7 units in about 0.26 acres, which is about 27 dwelling units per acre.

Nothing Unusual About This Density

At 13 dwelling units to the acre, the Inara Court project fits in very consistently with residential projects in its immediate vicinity, as well as being consistent with density found at places such as Cedar Court or The Flats on North Greensboro Street. While the “Architecturally Integrated Subdivision” may be a new way of delivering 13 units/acre in town, this is a very commonplace residential density in Carrboro, and has been for nearly 4 decades.

Hopefully in the future, the Chapel Hill News will use simple comparative techniques to describe the relative density of a project as accurately as possible.

Carrboro Should Aim Higher for Infill

While I think this project has a nice aesthetic if they turn out looking like the rendering, I’m also somewhat disappointed that there was not a proposal to combine these properties with the O2 Fitness site for a larger redevelopment project. Having vacant land next to a mostly past-its life suburban strip mall that used to be ~~Piggly Wiggly~~ [correction: an A&P grocery store] way back when would have been a terrific opportunity to get at least this many housing units, maybe many more on both the market rate and affordable side, **AND** also build some new office and commercial space in downtown.

The rezoning to the higher density is certainly better infill than the two single family houses that have gone in on Poplar just behind the proposed Inara Court project, but I think we could have done even better here for the tax base, for affordable housing, and for economic vitality if we had positioned this site as a true redevelopment opportunity and put appropriate zoning in place. This is another reason Carrboro needs a comprehensive plan.

Filtering, Housing Supply and Changes In Rents: The Evidence

Posted on March 5, 2015 by patrick

Over the past two weeks, I have highlighted how housing prices and rents increase without new development- through filtering at large multifamily properties and at smaller rentals as individual landlords decide to upgrade their units one at a time. The flip side of this phenomenon is the question: Is there is evidence that expanding the supply of housing can put downward pressure on rents, and can prevent mid-market housing from filtering up to become higher-end rental property?

The answer is an overwhelming YES. But don’t take my word for it, just read a whole bunch of newspaper articles with data below. None of them use the word “filtering” explicitly, but virtually all of them reference filtering in housing markets in one way or another. I’ll make some brief comments after a few articles.

Austin, TX – 2/2/2015 (Austin American-Statesman)

The boom in apartment supply dropped the area’s occupancy rate to 94 percent in the last half of 2014 — the lowest occupancy level in more than three years, and nearly 4 percent below the recent high of 97.8 percent in June 2012…With all those new units entering the market, supply is catching up to demand. And that means apartment rents are stabilizing after rising rapidly — sometimes as much as 7 percent per year — from 2010 through 2013. The average rent in the metro area was $1,107 a month in December — an all-time high, but an increase of only $8 from the average rent for June, Heimsath said.

Comments: This article notes how the expansion of supply in Austin has increased vacancies, which is another way of saying there are more multifamily properties with idle income-producing units each month, who are now more likely to make deals on rent. Here the supply of new units has cut rent increases from 7% to 0.7%- or $8/month on a unit that rents for $1,107.

Washington, DC – 1/4/2015 (Washington Post)

This new supply forced landlords at some four- and five-star buildings to reduce rents in order to fill their units. As a result, rent growth dipped into the red briefly in 2008, and then again for most of 2009. The Great Recession also had an impact, as some former four- and five-star renters moved to older, cheaper three-star buildings to save money. This increased demand for three-star units, allowing landlords there to continue raising prices.

In recent years, the effective rental growth rates of three-star and four- and five-star buildings have diverged even further. Just as in 2007, this is largely a result of the recent construction boom in the Washington area. An unprecedented number of new apartment units (about 24,000) have arrived in the area in the past two years, increasing the total apartment inventory by roughly 5 percent.

That new supply wave cut rents for four- and five-star apartments even further, even as rents at three-start apartments continued to outperform. But the narrowing may be slowing as the wave of supply takes its toll on three-star rents as well, working in renters’ favor.

Comments: This article identifies some of the submarkets in DC, separating out 3-star properties from 4-star and 5-star properties, and describes how the influx of new high-end units has had rents falling since 2013. (see chart) Also of interest are the descriptions of people moving from one submarket to another because of the Great Recession.

Closer to home, a piece on the Triangle Apartment Market as a whole – 11/19/2014

A total of 7,965 new apartment units have been completed in the Triangle over the 12-month period ending in September, according to MPF Research, which analyzes apartment data in 100 U.S. metro markets. That is easily the largest amount of new supply added over a 12-month period in the 20 years that MPF has been tracking the Triangle.

According to MPF, demand for new units over that same period totaled 6,940 – a hefty number but still below supply.

The new supply has helped slow rent growth in the Triangle. Rents were up 1.7 percent in the third quarter compared to the same period a year ago. That was well below the 3.7 percent average increase across the United States.

Comments: Pretty self-explanatory. More units coming online slowed rent increases compared with national averages.

More local data, in Durham – 2/14/14

The boom in apartment construction in Durham County and across the Triangle has helped to bring down average rental rates, according to a recently released report from the Charlotte-based market research firm Real Data.
However, a real estate company behind one of the new apartment complexes in downtown Durham expects to be able to buck that trend due to the location and type of product it’s offering.
Across Durham County, the average rental price per unit in January was $887. That was down 2.3 percent compared with the average in July of last year. That’s a larger decline than was seen in the three Triangle counties of Wake, Durham and Orange, where the average was down 1.7 percent to an average rate of $868 per month.
Vacancies have risen as some of the units in the new complexes have come online, the firm reported. Real Data had a total of number of 3,045 units under construction in Durham County, which is 30 percent of the number of units – at 10,028 – under construction across the Triangle.
Although averages are coming down, according to the firm’s reporting, it appears that the newer units are being rented out at the expense of older communities. Existing communities saw a net loss of 306 renters across the Triangle, according to Real Data, while there was a positive net unit absorption of 1,436 units.

Comments: The last sentence (emphasis added is mine) is a perfect description of filtering with new units attracting high-end submarket renters to the newest, latest/greatest housing. This raised vacancies at existing multifamily properties,and rents fell 2.3 percent across the market, making housing more affordable.

And in Chapel Hill on Rosemary Street – 3/31/2014

Students stood in line with keys outside of the LUX apartments leasing office on Franklin Street Thursday hoping to open a treasure chest that would give them free rent for a year. At one point they were approached by two people handing out treats with advertisements for The Warehouse on them.

“I incorrectly thought it was LUX employees trying to pacify people who were waiting in line, but I was wrong,” UNC student Lauren Sutton said. “I got my rice krispie treat and flipped it over and there was a sticker on it saying, ‘Warehouse apartments: Now Leasing,’ and their prices for rent.”

The Warehouse did not return requests for comment.

But the complex did lower its monthly rent for four-bedroom apartments to $618 for next year, down 21 percent from $785 this year, according to the complex’s website.

Comments: Classic response to visceral competition from brand-new amenity rich building directly across the street- move your rents to a new, lower-rent submarket to compete!

You see that there are all kinds of affordable cities in the United States. There are plenty of low-demand cities, especially in the midwest, where the housing stock has grown slowly and prices are low. But there are also plenty of cheap, fast-growing cities in the sunbelt where the housing stock is growing rapidly and keeping things affordable.

And then there are the expensive cities. The places where house-sellers are asking for over $200 per square foot. All of them are cities where the housing stock is growing slowly, even though these are the places where it would be most profitable to build. That’s because these cities tend to have geographical constraints that prevent further sprawl, and have adopted zoning codes that make it difficult to add more housing by building more densely.

Here’s the chart, courtesy of Trulia.com:

As I was working on this post over the last few days, I was trying to put together a good summary paragraph when an excellent blogger in Chicago, Daniel Kay Hertz, took up the same topic and posted this excellent conclusion for affordability:

But the bottom line is that slow, zero, or negative cost-of-housing growth is better than fast cost-of-housing growth. (At least, that is, in high-cost neighborhoods/metropolitan areas.) The vast majority of low- and moderate-income people live, and will continue for the foreseeable future to live, in non-subsidized housing. Even in New York, which has held on to its public housing better than most other large expensive cities, it only makes up something like 7% of all units. That means that it’s exactly these kinds of market trends – consistently large rent hikes, year after year, in mid-ish market housing – that makes a neighborhood, or city, or metropolitan area, eventually unaffordable to working- and middle-class people.

And it turns out that construction booms arrest that sort of pattern, or prevent its continuation, all the time.

Displacement Without Development: Filtering Up on North Greensboro Street

Posted on February 24, 2015 by patrick

Last week I described the real estate market phenomenon known as “filtering,” and discussed a recent example in Carrboro where Abbey Court filtered from a lower rental submarket to a higher rental submarket and became Collins Crossing.

Displacement Without Development

Today I’m going to discuss another local example of where lower-rent units are disappearing and higher-rent units are taking their place. As you continue reading, keep in mind what is ultimately the most important part of this post – that new development is completely absent from the neighborhood real estate market, and yet rents are rising. When rents in existing buildings are rising, the socioeconomic status of the people living there is going to change. (as we saw last week)

Since properties filtering up and down is driven by the decisions of many individual landlords, a lot of filtering happens one property at a time, and thus can be hard to spot. However, Carrboro has one smaller-property hotspot for filtering up these days: North Greensboro Street, just north and south of Estes Drive Extension.

Let me show you what I mean, and also show you the best free software tool available to track filtering visually: Google Street View. If you look at the date of any Google Street View photo and see a clock to the left of it, that means there should be older views available as well. For neighborhoods currently seeing changes and investment, this is a great way of doing before and after comparisons. With that in mind, let’s explore North Greensboro Street in Carrboro in the pictures below.

Filtering On North Greensboro Street

Here’s 1103 North Greensboro St in 2007:

1103 N Greensboro St – 2007

and “The Wilson” in 2012 (same property)

“The Wilson” – 2012

From a website attempting to sell The Wilson for $2.3 million for its 16 units- the smallest unit is a 2BD/1 BA renting for $905/month for 700 square feet:

The Wilson Apartments are located 1.5 miles from the UNC campus and the commercial hub of Franklin Street in Chapel Hill. The property has been completely renovated with condo quality finishes that include stainless steel appliances, updated baths, hardwood floors and a new metal roof.

Also from their website, here are the improvements the owners of The Wilson made to move to a higher-end rental submarket

Removed baseboard heat & window a/c’s and installed central heat and air in all 16 units – new heat pumps
Removed old shingles, replaced old plywood and installed a new energy efficient standing seam metal roof
Removed all the original single pane windows and installed new Pella low-e vinyl windows
Completely renovated every kitchen; new cabinets, counters, sinks, and appliances – stainless refrigerators with ice makers, ranges, built-in microwaves
All new bathrooms including, tubs, showers, vanities, cabinets, lighting, mirrors and accessories
Installed all new plumbing lines and fixtures inside every unit, sub-meters were installed on some of the units, but are not being utilized at this time
Installed new main sewer line from buildings to the street
Removed the laundry room and installed new, energy efficient stackable washers and dryers in every unit
Painted the exterior brick and re-painted all the interiors
Refinished the existing hardwood floors and “feathered in” new hardwoods in the living and bedroom areas – tile floors installed in the baths
New interior and exterior doors with new hardware
Completely demoed and re-wired all units and the common areas – replaced lighting fixtures with new
Made alterations to floor plans which include, but are not limited to; adding bedrooms (converted 6 units from 2 BD’s to 3 BD’s), removing dividing walls
between kitchens and living areas, creating arched doorways, vaulting the 3rd floor ceilings and capturing common area space (previously un-used) to make
some units larger
Upgraded the landscaping in the courtyard with new plantings and accents,removed overgrowth at the front of the property and planted new trees and shrubs, removed debris and thinned out the woods in the rear of the property to create and view and path to Wilson Park
Added three new porches with standing seam metal roof, all new wood handrails with cedar trim accents and arched pergola in courtyard
Tore down, graded and re-built the retaining wall on the left side of the property
Graded and added gravel in the rear of the property to create more parking spots
Built new property fence along the street and dumpster containment area

Remember that year you spent in grad school at the aging Todd St apartments?

Todd St Apartments, Mid-Renovation – 2007

It’s now known as “The Flats.”

“The Flats” Condominiums – 2012

Here’s a picture of the kitchen and laundry area in one of The Flats units that recently sold for $193,000 according to Zillow. Notice the stainless steel appliances, double-stack modern front-loading laundry equipment, and new counters. This building was built in 1962, but the inside screams 2010 or newer.

The Flats Kitchen/Laundry Investment

One of the more recent conversions is 605 North Greensboro. Here I have put the before and after shots side by side- one from Google Street View, and another photo I took last year.

605 N Greensboro Filters Up in Carrboro

Like many other buildings on the street, 605 N Greensboro now has a name- “Sagebrush,” to signal its upmarket transition.

What Filtering Means for Carrboro and Affordable Housing

In a world where not enough housing gets built to meet market demand, the demand for luxury and high-end-of-the-market housing in a growing metropolitan area will turn middle market units into upper market units via renovation. This is exactly what is happening on North Greensboro Street.

If new housing is built, and it is luxury housing, it will entice some residents seeking a luxury housing experience out of their current units, freeing up those units for renters with a little less income to take their place. This helps put downward pressure on prices through the basic law of supply and demand.

The flip side of this point is that if Carrboro produces a limited amount of new housing units, then the town has adopted a de facto policy to encourage filtering up in various submarkets of the existing housing stock. The landlords on North Greensboro Street have figured this out, and they are making rational capital investments in their rental businesses.

As the Board of Aldermen continue to discuss affordable housing strategies, it is important that they and town staff be aware of filtering occurring in town at large properties (like Abbey Ct/Collins Crossing) and smaller ones (like North Greensboro St), and they think about how to channel the reasonable and natural impulse of landlords to filter their properties up and down to support the town’s broader housing goals.

Filtering: A Word We Need to Understand as We Discuss Affordable Housing

Posted on February 17, 2015 by patrick

Protest of Abbey Court Sale to ASM (photo courtesy of www.chapelboro.com)

When new development occurs in Carrboro, many people ask “how many of the new residential units are going to be affordable?” While this is a good question to ask, the new units in any project are inevitably a small portion of the overall housing stock in the town.

The more important question is “how many of the EXISTING units are becoming more or less affordable?”

New Development = Small Portion of the Housing Supply

The 2012 American Community Survey reported that Carrboro had 9,347 housing units. A recently approved project on North Greensboro Street, Shelton Station, will add 96 units to the town’s supply of housing, which is barely over 1% of units. The debate over a single project’s affordability can make it seem like the prices of the other 99% are affordable, or at least have prices that are holding steady. This is not the case.

Landlords Respond to Rent Conditions and Trends

I’ll let Chris Bradford, the eloquent blogger behind Austin Contrarian, explain this part:

When property values rise, low-quality housing “filters up” to the high-quality housing sub-market. The reason is that rising rents encourage landlords to invest more in the property. When property values fall, high-quality housing “filters down” to the low-quality housing sub-market. The reason is that falling rents encourage landlords to invest less in property. The key in either case is that old housing costs more to maintain than new housing.

He continues:

Every landlord with an old property confronts the same decision: Should I spend the money to keep the property in top shape, or should I let it go?

Keeping the property in top shape allows the landlord to charge more rent. But it also costs the landlord more in maintenance and periodic renovation, especially for old apartments. What the landlord decides to do depends on the current market, his estimate of future demand, and about a million other things. But we know one thing for sure: A landlord is less likely to maintain an apartment in tip-top shape when the rent for tip-top apartments is falling. Declining rents mean a declining return on the maintenance investment. That spells less investment .

Without constant maintenance, apartments deteriorate from “tip top” to “slightly dilapidated.” Renters, sensible people that they are, are not willing to pay as much for bad quality. Rents fall, and the apartments “filter down” into the pool of affordable housing.

Filtering Moves Units From One Housing Submarket to Another

In another one of Bradford’s posts on filtering, he goes on:

People understand that a tight housing market leads landlords to raise rents. What they often don’t seem to understand is that a tight housing market also causes some landlords to invest more money in their properties in order move them into a more expensive submarket. That’s how a shortage of units in the $1,200/month submarket (for example) can hurt someone shopping in the $800/month submarket.

This is a key point about “filtering up.” If there’s a demand for higher-end units in a market that is not being met, middle-market landlords who realize this are likely to invest in their properties and re-position them as higher-end units. This often comes in the form of fresh paint, premium kitchen appliances and countertops, and other modest-cost improvements such as better light fixtures and new carpets. Once these conversions take place, the landlords will then start charging higher-end market rent for their unit, and simultaneously shorten the supply of mid-market apartments by one unit.

Bradford touches briefly on “filtering down,” and makes a good point:

Filtering down happens too, of course. It’s just that no one sends a press release to the Austin Business Journal when they decide to cut back on maintenance and allow their property to slip in to a cheaper submarket.

What’s The Most Prominent Example of Filtering In Carrboro?

One particular property in town has had a place in the spotlight as it has gone through filtering changes in the last few years: Collins Crossing, formerly known as Abbey Court. While the story cannot be completely told using news clips, the following quotes suggest that Abbey Court was “filtering down” through neglect from the middle of the past decade to the time of its sale to Aspen Square Management, and the new management firm has been renovating units, repositioning the property as a student-centric location, and “filtering up” to a higher-rent submarket ever since. Units that once rented in the mid-$500 range a few years ago now rent for more than $900 after the renovations.

June 2012: Abbey Court Sold [emphasis added]

While Blau acknowledges that renovations to the condominium complex are desperately needed to bring things up to code – citing buildings that are unsafe and stairways that are falling apart – because a large percentage of the residents who live in the condominium complex are immigrants, she is concerned that renovations could price them out of the complex.

January 2013: Abbey Court child falls through staircase [emphasis added]

A 10-year-old boy tumbled through a deteriorated stairway at the complex on Nov. 24, three days after Collins Crossing owners notified condo owners of their plan to impose assessment fees.

Carrboro officials gave owners 90 days to make repairs. In the meantime, condo owners have to find the cash within three weeks. It’s unclear what penalty tenants will face if they don’t pay, although Carrboro Mayor Mark Chilton says management could impose a lien on the condos. Some residents fear foreclosure.

March 2014: Glowing reviews about Collins Crossing Landscaping on Yelp: [emphasis added]

I moved in right before school started last fall. The landscaping is great and the renovated apartments are awesome. I have so much room/closet space, other then having a tiny sink, the bathroom is perfect. The staff is always more then accommodating, they are some of the nicest women ever. The prices are going up but still quite affordable and the best part is that you can have separate leases. I would definitely recommend this place.

Current (Jan 2015) Collins Crossing Website:

The UNC is our fully renovated 2 bedroom 2 bathroom apartment. It is an ideal floor plan for roommates within biking distance to UNC. It also features a full sized stackable washer and dryer.Starting at $979.

Housing Markets Are Dynamic, And Don’t Require New Development to Experience Price Changes in Submarkets

Carrboro has not seen significant new residential construction over the last several years, and Abbey Court/Collins Crossing is a good case study of how real estate market conditions, independent of the presence or absence of new development- drive how properties can become less affordable.

While the change from Abbey Court to Collins Crossing received significant coverage in the media, in part due to the size of the complex, this is not the only part of town that is filtering up.

Next Tuesday’s post will cover another key location where filtering is presently going on in Carrboro. Have a guess about which part of town it is? Leave it in the comments, and check back on February 24th to see if you got it right.

Lloyd Farm Development: Can We Avoid a Missed Opportunity?

Posted on December 1, 2014 by patrick

One of the more significant development projects in recent Carrboro history may reach the Board of Aldermen soon- the Lloyd Farm property. Located across NC 54 from Carrboro Plaza and just west of the Carrboro Post Office, this is one of the largest contiguous areas of mostly undeveloped land left in Carrboro. Here’s the location in question:

On September 11th I attended a meeting on the project at Town Hall. Late that night, I forwarded some thoughts to the development team. Having not heard back from them, I’m not sure what they thought of those comments, which were mostly about how to make changes to the organization of the buildings on the site that tried to allow for maintaining the overall building program, but organizing it into a more urban pattern, as opposed to a suburban pattern.

The more I think about the site plan that has been proposed, however, the more I think an outcome similar to what the developer is currently proposing is going to be a missed opportunity for Carrboro.

Let me start simply- if this parcel is going to develop (and it is) then it should develop in an urban pattern. In the plan proposed by the developer, the project is largely organized around a very parking lot. None of the other buildings have any substantial relationship to each other; instead they have relationships to the car circulation features. This is a suburban layout.

Lloyd Farm Site Plan

The Carr Mill parking lot in front of Harris Teeter and CVS is a good example of what you might get here with the large parking field.

Carr Mill Parking Lot from Greensboro St Side (click to enlarge)

What would an urban layout look like? More like one of these locations below. Forget about building height for right now. Just look at the relationships of the buildings to each other, and the spaces they create or frame. I chose these locations because the Lloyd site is about 40 acres. Where I could ballpark estimate the acreage of the commercial core of these projects, I did.

North Hills, Raleigh – 21-acre core, 850,000+ sq ft. Apartments also.

North Hills, Raleigh

North Hills Beach Music Series

American Tobacco Campus, Durham- 22-acre core; 1 million sq feet office space, 10 restaurants, 90,000 sq feet of apartments

American Tobacco Campus

American Tobacco Musical Event

Birkdale Village, Huntersville, NC – 52 acres; 300,00 sq ft, 320 apts

Birkdale Village, Huntersville

Birkdale Village Streetscape

Birkdale Village Fountain

The Piazza at Schmidt’s, Philadelphia – 8-acres: 500 apts, 50,000 sq feet office space, 80,000 sq foot public space

The Piazza at Schmidt’s, Philadelphia

Piazza at Schmidt’s, Market Day

Piazza at Schmidt’s – From Above

Biltmore Park, Asheville – 42-acres: 276 apts, 270,000 ft class A office, 283,000 sq feet retail.dining/entertainment, 65,00 sq ft YMCA, 165-room hotel

Biltmore Park, Asheville Layout

Biltmore Park Event

Biltmore Park Main Street

I have additional more detailed thoughts on how we’ve arrived where we are with the Lloyd project, but big picture stuff first: What do you think of these places as inspiration for the Lloyd property?

Carrboro Should Require Developer to Unbundle Parking, and Then Approve Shelton Station

Posted on March 21, 2013 by patrick

Shelton Station

Over a year ago, I wrote a piece in our wonderful community newspaper emeritus, the Carrboro Citizen, supporting the Shelton Station project which will come before the Board of Aldermen Thursday night.

Some key benefits of the project include:

The presence of another 125 to 170 residents so close to downtown will boost local business activity, in addition to generating construction jobs in the short term.
Shelton Station and the residents of its 96 apartments will create a considerably smaller carbon footprint than if those same units were built on the edge of town. Why? Carrboro – and particularly downtown – is built to encourage the most environmentally friendly travel behavior in the state.
If Carrboro does not want to become a town where only the wealthy can afford to live, then the town must approve more housing. That housing should be developed on Carrboro’s terms, in accordance with Carrboro’s values and priorities. As Shelton Station developer Ken Reiter has proposed pursuing green features in the building design, providing covered bicycle parking and renting 10 percent of the units to be affordable to workers at 60 percent of the median income, there is evidence that Reiter has thought carefully about ways to reflect Carrboro values in Shelton Station’s design.

All of the fundamental dynamics that led me to write that op-ed remain in place today, and I would encourage everyone to read it again here.

But prior to saying “Yes,” I hope that the Aldermen can ask the applicant to take one specific action that will introduce more transparency in their rental pricing, encourage more environmentally friendly travel onsite by residents, and direct parking towards turnover spaces that support local business instead of long-term vehicle storage: require the UNBUNDLING of Shelton Station’s parking.

What Is Parking Unbundling?

Unbundling of parking means that a household at Shelton Station, instead of renting an apartment and automatically getting assigned a certain number of parking spaces for their use, rents an apartment at one price, and a number of parking spaces of their choosing at a separate price. For example, imagine a scenario where all parking spaces for residents at Shelton Station rented for $40/month. This means that if the building owner would charge a $740/month rent with 1-bedroom apartment rent and parking rent bundled, then the Unbundled pricing approach would rent the same apartment for $700 and then, IF the renter wanted to park their car onsite, they would pay another $40/month specifically for the opportunity to do so.

Now, you may be thinking, “what’s the point? Most people renting apartments own a car and will desire to park it on site, so why go through this extra step to charge them the exact same price?”

This is a good and relevant question. And the answer is that if you live in a place with very high levels of access, and price residential parking, the evidence indicates that two-car households will “shed cars” and become one-car households, and while less common, some one-car households will also shed cars and become ZERO-car households, particularly if car-sharing is available.

Let’s continue our example: we’ve established that the monthly rental per space is $40 at our hypothetical building. Now a couple decides to move in, and receives the pricing schema for their two-bedroom apartment and two parking spaces. They start paying $1130/month to the landlord, but after only 1 month there, they realize that one of them commutes to work by transit, the other drives to work, and at night or on weekends, they walk everywhere or drive together in one car. They further realize that they are basically paying $500/year for one of their two cars to gather dust. They decide to sell it, which puts some money in their pocket, which they use to get a carshare membership to give them more flexibility. Their monthly rent drops from $1130 to $1090 the next month, and they are now a one-car household. The purple circle in the figure below shows the outcome of this move.

Unbundled Parking Example, With 2BR, 2-car household shedding one car upon move-in

What Are the Benefits of Unbundling Parking?

First, Shelton Station has expressed an interest in bringing Car-Sharing to Carrboro at their site, and unbundling parking helps make car-sharing more successful, which should benefit the developer by lowering the amount of monthly subsidy that may be needed to get car-sharing started onsite. Having a successful pilot experience with carsharing in Carrboro would be a great outcome for both Shelton Station residents and the town. Transportation Planning consultants Nelson/Nygaard conducted a study of buildings with both carsharing and parking unbundling and found the following:

Unbundling parking can help create demand for carsharing, while carsharing can help compensate for having to pay for parking in residents’ minds. In contrast, free and abundant parking reduces the demand for carsharing. As the findings show, households with both unbundled parking and carsharing available in the building have significantly lower vehicle ownership rates compared to households in buildings with neither (0.76 vehicles per household and 1.03 vehicles per household, respectively). Households in buildings with both unbundled parking and carsharing are also more likely to be carshare members than those with neither. Statistically significant differences were also found between carshare members and non-carshare members.

The average vehicle ownership for households with carshare memberships is 0.47 vehicles per household compared to 1.22 vehicles per non-carshare member household. Carshare members are also more likely to take non-auto modes to work and use transit; 83% of survey respondents with carshare memberships use non-auto modes to commute to work compared to 70% of persons without carshare memberships, and 43% of carshare members take transit compared to 23% for respondents without carshare memberships.

Second, it allows people to be rewarded for doing the right thing. There are two-driver, one-car households throughout Carrboro, and every apartment complex they rent from puts the price of two parking spaces in their rent, even though they would not use that amount of resources. An unbundled parking situation at Shelton Station would attract households like this who would jump at the chance to get a slightly lower rent than they would otherwise for only having one car instead of two. The $40 extra per month in their pocket is likely to be re-circulated at businesses they could walk to from the building.

If a development with unbundled parking is successful at getting residents to shed cars, then that allows room in their lot for them to have more spaces available for business patrons onsite, or perhaps even to develop their site further in the future if additional land for development exists.

One other key to success is that the developer should be free to rent parking spaces to non-residents if the unbundling creates spare parking capacity for them. How would this work for Shelton Station? A quick visit to Carr Mill Mall’s shopping center will find the “No Park and Ride/No Park and Bike/No Park and Walk” signs. It is likely that some people would pay by the day, week, or month to park and ride the F bus to campus. This is not as compelling a use as a parking space turning over several times during daylight hours for a business, but a mostly daylight park-and-rider is still going to occupy much less time in a parking space than a resident who never uses their car because everything is a short walk away.

Giving the developer an opening to earn revenue because they have adopted a progressive parking policy is also another way to help them support their fledgling carshare initiative, which I expect neighbors of Shelton Station would also be able to take advantage of as a neighborhood amenity.

In Closing: Purchase of 201 S Greensboro Lot and Future Steps on Downtown Parking

There’s a lot to like about the Shelton Station project. There may be some arguing about whether or not the developer and the staff have agreed to the “right” number of parking spaces. This is largely a red herring because parking generation standards are usually a pseudoscience at best unless you are working with detailed, local datasets. The town ordinance rightly gives parking reductions for certain uses in downtown areas, and has reduced the proposed parking for the Shelton Station site from somewhere around 220 to something closer to 170 spaces. I still think this is too much parking, but I think getting the policy implementation of carsharing and unbundling on the same site is too big an opportunity for us to miss if it can be achieved, and is more important than shrinking the 170 spaces at Shelton Station further at this time.

Roberson St Lot by Flickr User Rubyji

News this week broke that the town purchased the parking lot it has been leasing across from Glass Half Full, just south of Open Eye Cafe, gaining control of 90-odd parking spaces. I was encouraged to hear that members of the board think this could be even a future location for a library as well as other uses and public parking.

Still, it is critical that everyone understand that there is no strategy based on providing more and more free parking in downtown Carrboro in perpetuity that does not end in the town destroying the pedestrian-first atmosphere of downtown, create nightmare traffic jams that choke downtown business and put an upper lid on our prosperity, or lead to aggressive towing that nobody wants to deal with. This does not even address the fiscal cost of buying and maintaining the parking spaces.

Eventually, we’re going to need market-priced parking in downtown to sustain vibrancy, and it will ideally be managed via some system where individual spaces that are not reserved for any one establishment can rent themselves to a broader pool of users via a smartphone app or streetside kiosk. We’re not there yet, but we will be there sooner than many people think.

Unbundling parking removes the least productive type of parking (long-term residential storage) from downtown and helps support local business by providing more turnover spaces for their customers. It will help keep parking pricing for everyone else at bay further off, and will allow us to introduce a new tool in the access-to-downtown toolbox.

Let’s look into getting an unbundled parking condition on this project, and then move it forward for approval Thursday night.

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Urban Planning for the 21st Century

Category Archives: Affordable Housing