Planners explain failure of housing bonus policy

Dec. 04, 2013 @ 07:18 PM

If they want developers to voluntarily include low-cost units in future projects, Durham officials will have to increase substantially the concessions they offer in return, city/county planners say.

No developer has ever taken advantage of the two governments’ existing offer to allow 15 percent more units in a project without additional zoning provided they’re reserved for people who make 60 percent or less of the area median income.

In talking with developers, planners have learned the extra income from the low-cost units won’t offset the extra costs they incur by including them. “The developer is going to lose money on that,” hence the lack of interest, Planning Supervisor Aaron Cain said.

With help from two UNC city and regional planning students, Melissa Kim and John Perry, Durham planners tried to gauge how well similar “density bonus” programs have worked in other cities.

Their checks found that most failed.

Those that didn’t generally offered developers a chance to build at least two extra market-rate dwellings for every low-cost dwelling a project includes.

There also were some communities, Carrboro being one, that keep a tight rein on permit approvals and use that as leverage in bargaining for low-cost units with developers.

But that approach isn’t necessarily feasible in a community the size of Durham, Kim told City Council members and County Commissioners who sit on the Joint City/County Planning Committee.

Over time, “you’d have hundreds of developments coming through” that elected officials would have to review, a process that is both riskier and more costly for developers, she said.

Successful bonus programs generally include concessions that go beyond density, Perry said, going on to list the loosening of height restrictions and parking requirements as things some communities offer.

And, he said, “all these programs operate under administrative review,” where, in exchange for offering low-cost units, developers can avoid entanglements with elected officials and neighborhood groups.

Committee members termed the research helpful, and gave planners the green light to try figuring out if there’s some package of concessions Durham’s governments can offer that might work.

Assistant Planning Director Pat Young said the department will organize a group, with help from people like former City Councilwoman Lanier Blum, to sit down with both market-rate and nonprofit developers to game out how different possibilities would affect a project’s finances.

He promised “community wide” publicity and participation in the effort.

City and county officials are wading into the issue mainly at the behest of groups such as Durham Congregations, Associations and Neighborhoods, also know as Durham CAN, that want them to figure out how to secure more low-cost housing around future transit stops.