Neighborhood Conservation Districts: Chapel Hill Frozen in Time

A common complaint in Chapel Hill is that homeowners bear too great a tax burden because the town lacks a significant commercial tax base to offset it. The town’s onerous development process limits the amount of commercial space that can be built while also limiting the construction of new, different, and denser housing that is affordable to a wider range of people. At the same time, through the Neighborhood Conservation District (NCD) process, the town further restricts the availability of some areas for redevelopment, effectively freezing large areas of Chapel Hill in time. Removing these areas from potential redevelopment results in even less land for the creation of new mixed use and less single-family detached suburban type development to shift the tax burden. If our town is serious about supporting affordability, NCDs are counterproductive, “protecting” large swaths of the town that cannot be developed into denser urban environments.

According to the Town of Chapel Hill website, an NCD is meant “to protect distinctive neighborhood characteristics and is useful in areas that contribute significantly to the overall character and identity of the Town, but may lack sufficient historical, architectural or cultural significance at the present time to be designated as a Historic District.”

Currently, there are nine NCDs, with a tenth (Elkin Hills, a neighborhood off of Martin Luther King Jr. Blvd) poised to be established in the next six months. Fortunately, the Chapel Hill Town Council has placed a moratorium on new NCDs until their impacts can be determined.

How do NCDs support our community’s affordability goals? In short, they don’t. In some NCDs, the restrictions result in less creativity, restricting the range of building types that are allowable so that homes all look similar instead of encouraging housing of different sizes and types to support a broad range of lifestyles and income levels. Minimum lot sizes in the NCDs tend to be large; for example, in the Greenwood NCD, the required minimum lot size is one acre. Seven of the nine existing NCDs are in affluent, predominantly white neighborhoods. Elkin Hills, while not a wealthy neighborhood, is predominately white and is prime for redevelopment once the university receives the green light for Carolina North buildout.

NCDs themselves are fairly vague in purpose and therefore have accomplished little. Furthermore, the addition of regulations typical of an NCD result in less affordability, not more.

There is significant empirical research that confirms that additional regulations lead to less affordability. The micro effects of land use regulations such as NCDs have led to higher housing prices and less construction (http://www.nber.org/papers/w20536). Moreover, are we actually preserving neighborhoods worth preserving? Whose character is it that we can’t do without? Is maintaining this “character” in line with the highest and best use for the whole town?

In addition to the soon-to-be ten NCDs, Chapel Hill also has three historic districts (Cameron-McCauley, Franklin, Gimghoul) with which federally designated historic districts overlap. All of these protections mean that a significant proportion of the town is restricted from significant development or redevelopment (see map below). Of the approximately 55 square kilometers of land that make up Chapel Hill, almost 7 square kilometers, or about 12%, have NCD or historic district status, and thus the broad development that is needed to  impact the affordability of Chapel Hill. It should be noted that almost all of these districts occur adjacent to campus, downtown, and major transit corridors, further hampering our ability to redevelop areas which would be best served by higher density.

Neighborhood Conservation Districts should be replaced with policies to address neighborhoods that seek protection without limiting the types of development that we need. NCD supporters often say their motivations lie with preserving the sense of community that exists in their neighborhoods, but NCDs simply cannot do this. Placing additional restrictions on development does not succeed at preserving community and instead has negative consequences. Furthermore, when NCDs are proposed to protect affordability, as in the case of Elkin Hills, the resulting regulations often have the opposite effect. Because the North Carolina General Assembly doesn’t give cities the authority to regulate housing affordability in any significant way, there’s very little our local governments can do to "preserve" affordability.

We should do more with form-based code to give potential developers an idea what we want for our community so that they may build it. We should embrace change as a means to stay vital, dynamic, and affordable. We can’t and shouldn’t preserve the so-called village of Chapel Hill. It is a place that no longer exists. Exciting developments are happening in our community. Our downtowns are becoming more walkable and bikeable. The food, art, and music are drawing people here. Let’s embrace policies that allow this to continue, not create a town with an exclusive feel and a high price tag.