AGENDA #3a(1)




Mayor and Town Council




Inclusionary Zoning Task Force




November 20, 2006




Final Report


In September 2005, the Town Council established a task force on inclusionary zoning with the following charge:

In December 2005, a task force with representatives from various constituencies including the development and real estate communities, the business community, nonprofits engaged in providing affordable housing in Chapel Hill, and interested citizens, began meeting. (Efforts to recruit a citizen who needs affordable housing were unsuccessful.) We met regularly as a large group through June 2006. Over the remainder of the summer, a voluntary subcommittee, which had already formed, continued to meet to work on details. In September, the large group began meeting again to consider the subcommittee’s work and to come to final conclusions. Our last meeting was on November 8.

Upon evaluating the data provided by staff, including the Orange County, North Carolina Comprehensive Housing Strategy (2005), and weighing our own personal and professional understandings of current market dynamics, we determined that there is a compelling need and justification for an inclusionary zoning ordinance in Chapel Hill. Although the Town’s existing ordinances have led to a measurable level of success in the production of affordable housing, the current requirements fall short of being comprehensive (particularly when it comes to multifamily dwelling structures, of which the Town expects to see more in the future). We recognize that such an ordinance will not entirely eliminate the barriers that the high price of housing in the Town creates for those who would like to live here but lack the means. Further, some concerns were expressed about the overall cost-benefit of the imposition of a complex new set of rules. But on balance we believe that it is possible to structure an inclusionary zoning ordinance that significantly enhances the housing opportunities for those of low to moderate income while being fair to the developers who will be asked to build the housing units. 

To evaluate other ordinances, we began with those discussed in the booklet Locally Initiated Inclusionary Zoning Programs: A Guide for Governments in North Carolina (2004), edited by Anita Brown-Graham for the UNC School of Government. We focused most directly on the ordinance in place in Manteo, with some attention to that of Highland Park, Illinois, on which the Manteo ordinance was modeled. We also considered the inclusionary zoning discussion paper produced by consultant Mark White for the Town on Sept. 12, 2001. Further, we incorporated information from PolicyLink, a national nonprofit organization that focuses on (among other things) affordable housing. Council Member Greene participated in one of PolicyLink’s national conference calls in August. On the particularly difficult issue of managing condominium fees for affordable units, we benefited from the work of two students in the UNC Law School’s Community Development Clinic under the supervision of professor Tom Kelley, a member of the task force.

We recommend that the Town enact an inclusionary zoning ordinance that incorporates the ideas suggested in this report. As discussed further below, important elements in our proposed ordinance include the following:

As a preface, we want to make it clear that we found this issue much more complex than we anticipated. Numerous details of our proposed ordinance remain unresolved. Of those details, many hinge upon policy decisions that will need to be made ultimately by the Council, on consideration of broad public discussion. Still other details are left unresolved because they involve levels of data analysis that were beyond the abilities of committee members, given limitations of time and expertise. Accordingly, other recommendations of the task force include the following:

The following discussions move from background considerations to our proposed ordinance as drafted so far (see Attachment 1) to the details of our suggestions for next steps.

I. Background information

Before introducing our proposed draft outline of an ordinance, we want to highlight certain key issues.

Goals for the ordinance

Early on (March 1), the committee embraced the following goals:

On March 27, the voluntary subcommittee made its first report out to the whole committee (Attachment 2). Having reviewed the Comprehensive Plan’s ideas for affordable housing as well as the Manteo ordinance, the subcommittee proposed a set of “general goals and principles.” Upon discussion, these recommendations evolved into expanded goals embraced by the full committee, as follows. (The idea of a design competition was later dropped.)

Advice from professionals

Two guest speakers contributed valuable information: local real estate attorney David Rooks; and Anita Brown-Graham of the School of Government.


Mr. Rooks spoke to the committee on March 1 on the subject of alternative methods to ensure permanent affordability. He said he believed that options other than the land trust model, through the use of such devices as deed restrictions and restrictive covenants, could work with proper and attentive administration.


For the committee, Council Member Greene posed to Ms. Brown-Graham the following questions: (1) Can permanent affordability be achieved using methods other than the land trust model? (2) How flexible should an ordinance be to be effective? (3) What are the ingredients that absolutely should be in an inclusionary zoning ordinance?

Ms. Brown-Graham spoke to the committee on April 12. A summary of her remarks is provided in Attachment 3 (“Summary of the April 12, 2006 Meeting of the Inclusionary Zoning Task Force”). For the essential elements, she listed the following:

Consistent with Mr. Rooks, she said that permanent affordability could be addressed with deed restrictions but that it was difficult to ensure that way, that monitoring was difficult.

II. Proposed ordinance

For our proposed ordinance as we have crafted it so far, please see Attachment 1, and please note the annotations.

III. Further subcommittee work

As is evident from the content of the draft, key issues remain to be resolved. During June-September 2006, the volunteer subcommittee met to examine these issues in further detail to see how the goals established above could be reached in the provision of inclusionary housing.  The major issues are discussed below.

Pricing of affordable dwellings

Floor Area Ratio Changes

The subcommittee examined a number of the newer multifamily developments in Chapel Hill and looked at plans of market rate units in other nearby communities.  With respect to multifamily development that is primarily in the form of flats [1], the subcommittee recommends that LUMO be amended to permit floor area ratios based upon an average floor area per flat of about 1,500 SF.  The majority of the new 2 bedroom apartments or condominiums examined had about 1,200 to 1,350 SF. This amount of floor area per unit has the following basic relationships:


Average Floor Area of Dwelling Unit [2]

1,250 SF

Common Floor Area [3] at 20 percent of DU

250 SF

Average Floor Area per Dwelling Unit


1,500 SF

For comparison, the current LUMO floor area for the R-5 residential district permits an average SF per unit (if 15 units per acre are developed) as shown below.


Average Floor Area of Dwelling Unit [4]

734 SF

Common Floor Area [5] at 20 percent of DU

146 SF

Average Floor Area per Dwelling Unit


880 SF

Market Rate Density Credits Outside the Downtown

After looking at a number of basic case studies of one-  and two-tier pricing structures for affordable units and considering the cost and design layout of multifamily development with ground parking [6], the subcommittee developed two formula alternatives for establishing overall density and affordable to market rate unit relationships within any development.  Each starts with the following two principles:     

  1. The minimum number of affordable units required within a development is established by multiplying the “base [7]” number of dwelling units permitted by zoning for the site by 15 percent (rounded down).
  2. A density credit of two market rate units for each affordable unit shall be permitted within the proposed development.

The two alternatives for establishing the total amount of development permitted are:

  1. The affordable dwelling units are provided within the “base” number of dwellings permitted on the site and the density credit units are added to the “base.”
  2. The affordable dwelling units and the density credit units are both added to the “base” number of units permitted on the site.

The difference in effect of these two alternatives on a 5-acre site in the R-5 zoning district is shown below.  (The R-5 district is the most dense residential district outside the downtown (15 units per acre) and requires a 5-acre site for the construction of a multi-family development with more than 7 units.)


5 Acre Site

15 Units/Acre



AH within Base


AH added to Base


Zoning Base




AH Required [8]




Density Credit Units




Total Units (1+2)




Overall Density

19.4 du/acre

21.6 du/acre


Percent AH




Market Rate Density Credits Inside the Downtown

An examination of the floor area ratio and densities permitted in the Town Center and the several proposals currently in the review process for development in the downtown led quickly to the conclusion that the approach to density credits in the areas outside the downtown did not apply to the Town Center districts.

Because redevelopment in the downtown will involve structured parking – either above or below ground – the design standards for parking, setbacks, height, and other elements of the downtown need to be examined differently in order to determine if any density credit system will work downtown.

So far, all the applications for redevelopment seem to propose a higher floor area ratio than permitted currently and all seem to need height variances of some type.

The subcommittee believes that proposals for affordable housing within the Town Center need to propose changes to the floor area permitted as well as changes to height and parking requirements.  This examination needs a greater amount of detail than can be done without consultant help in understanding the relationships among the height, floor area, parking, market, and cost aspects of development with structured parking.  The Council in its consideration of the joint development proposal for Lot 5 and the Wallace Deck should have a considerable amount of existing information that could be used in a more detailed analysis of changes needed to promote affordable housing in the downtown.

New/amplified zoning districts and standards

The subcommittee undertook several design studies to examine the relationships between density, parking, building height, square feet within dwelling units and buildings, impervious surface areas, etc.  Copies of the color site plans done in this exercise are included as Attachment 5.

Some observations were:

  1. Properties less than 5 acres in size (down to 1 acre) can be responsibly designed and developed with multi-family developments.
  2. Impervious surface standards and parking requirements for properties outside the downtown have more effect on design than other standards such as setbacks and building heights.
  3. Sites with few constraints can be designed to have 25 – 30 units per acre with surface parking in 4-story buildings with about 60 percent impervious surface coverage.
  4. With surface parking provided below buildings, residential density in the range of 45 units per acre in 5-story buildings can be achieved.

Recommendations for Consideration

  1. Create a new residential zoning district for use along the primary roadway and transit corridors that permits a greater density than the 15 units per acre in the current R-5 district, perhaps 25 units per acre and a floor area ratio of about .85, and
  2. Establish specific development standards within the current TODD (Transit Oriented Development District) that permit 30 - 35 units per acre with a floor area ratio of about 1.2.
  3. Each of these districts would be required to have a full 15 percent of the total units as affordable units.
  4. Permit multifamily development on lots between 1 acre and 5 acres in size.

IV. Suggested next steps

The inclusionary zoning task force believes that it has fulfilled its charge to the extent that it has been able, given the time and resources available. To reiterate, the unresolved issues involve either policy choices that are appropriate for the Council to make upon due deliberation, or technical decisions that involve complex levels of data analysis. The task force recommends that the Council seriously consider the subcommittee’s suggestions stated above, including the recommendation that a consultant be hired to help bring the ordinance to a completed state. In addition to the issues discussed above, here are a few more issues that the committee acknowledged but did not comprehensively address:

The committee recommends that the Council entertain this report; consider hiring a consultant well versed in the details of planning and inclusionary zoning regulations; invite public conversation through public forums and the advice of Town boards, particularly the Planning Board; collect further staff commentary; and bring this draft to a point ready for adoption by the end of June 2007.


  1. Draft Inclusionary Zoning Ordinance (p. 11).
  2. March 27. 2006 Report from the Inclusionary Zoning Task Force Subcommittee (p. 20).
  3. Summary of the April 12, 2006 Meeting of the Inclusionary Zoning Task Force (p. 34).
  4. Pricing Examples (p. 36).
  5. Site Plans Generated by the Subcommittee (p.38).
  6. Condo fees memo (p. 31).

[1] “Flats” is used to describe the physical type of development in which one dwelling unit is located on one floor, regardless of whether it is owned as a condominium or is a rented dwelling unit.

[2] Square feet of floor area within the dwelling unit

[3] Entryway, elevator, stairs, hallways, common storage, management office, interior recreation areas, etc.

[4] Square feet of floor area within the dwelling unit

[5] Entryway, elevator, stairs, hallways, common storage, management office, interior recreation areas, etc.

[6] Ground level parking includes: 1) open at grade, 2) within garage structures, or 3) at grade under buildings.

[7] The “base” number of dwelling units equals the maximum number of dwelling units that would be permitted on the site by the current or proposed zoning.

[8] 75 times .15 = 11.25 // rounded down to 11.