TO:               Mayor and Town Council

FROM:         W. Calvin Horton, Town Manager

SUBJECT:    Proposed Change in Raleigh-Durham-Chapel Hill Metropolitan Statistical Area Designation

DATE:          September 25, 2000

The attached resolution would seek to preserve Chapel Hill’s status as a “principal city,” as applied to a new Durham metropolitan area to be created.


This memorandum discusses the potential effects on Chapel Hill of a proposal to change how a federal agency defines the Triangle metropolitan area for statistical purposes. The Town has until October 6, 2000, to submit comments to the U.S. Office of Management and Budget. Please see Attachment 1 for a summary of the proposed changes.

The proposal would split the Raleigh-Durham-Chapel Hill Metropolitan Statistical Area (MSA) in establishing two new “Core Based Statistical Areas” called the Raleigh metropolitan area and Durham metropolitan area. The proposal means the following for the Town of Chapel Hill:

·        The Town would no longer be considered a “central city.” Because of new criteria, Chapel Hill’s name would be excluded from the name of the Durham metropolitan area, and the new Raleigh-Durham “combined area.”

·        The removal of the Town’s name from the title of the statistical areas could result in less exposure for Chapel Hill, as the Town would no longer be included in references to the “Raleigh-Durham-Chapel Hill MSA.”


The Office of Management and Budget, throughout the 50-year history of the statistical area definitions, has reviewed metropolitan standards to determine whether any changes are warranted prior to a new decennial census. The purpose, the agency says, is to ensure the “continued usefulness and relevance” of the statistical definitions.  The definitions “provide nationally consistent definitions for collecting, tabulating and publishing federal statistics for a set of geographic areas.” The Office of Management and Budget  says the designations are not for “nonstatistical activities or for use in program funding formulas.” However, some agencies, such as the Department of Housing and Urban Development in its Community Development Block Grant program, rely on the statistical area definitions for non-statistical reasons, including the allocation of funding.

The general concept of a metropolitan area is that of a “core area containing a large population nucleus, together with adjacent communities having a high degree of economic and social integration with that core.” The proposal would replace the current metropolitan area category – an MSA is a metropolitan area that meets certain population and other criteria – with the term “Core Based Statistical Area.”

The cores for this classification would be urbanized areas of 50,000 or more population, and smaller urban clusters that will be identified using Census 2000 data. Defining a Core Based Statistical Area would require the presence of at least one core of 10,000 or more population. The recommended Core Based Statistical Area classification has two categories of areas: (1) metropolitan areas defined around at least one urbanized area of 50,000 or more population; and (2) “micropolitan” areas defined around at least one urban cluster of 10,000 to 49,999 population.


Change in Central City Designation

The proposal would remove Chapel Hill’s central city (now termed “principal city”) designation due to a change in how these areas are defined. The 1990 central cities criteria were more encompassing than the narrower standards now under consideration. The loss of the central city status in effect removes Chapel Hill’s name from the title of the new Core Based Statistical Area to be called the Durham metropolitan area. The Raleigh and Durham Core Based Statistical Areas are to be known together as the Raleigh-Durham “combined area,” a new statistical category. Both metropolitan areas would retain separate identities within the larger combined area. Attachment 2 illustrates the proposed configuration of the two metropolitan areas based on 1990 census data.

The population of the proposed Durham metropolitan area would total approximately 360,000, according to 1999 population estimates. The proposed Raleigh metro area would have a population of approximately 750,000 (1999 estimate).

The population size of Durham, as the principal city of the metropolitan area that includes Chapel Hill, is why the Town is not considered a second principal city for the area. Although Chapel Hill has a population of over 10,000, it will not be considered a second principal city. The standard requires that a principal city be at least one-third the size of the largest place within the metropolitan area. Chapel Hill’s 1998 population of 44,000 was 27 percent of Durham’s 1998 population of 162,000. Population figures from the 2000 census, not these estimates, will be used to determine whether the Town meets the one-third threshold.

Because only the names of the principal cities are included in the title of the proposed metropolitan areas, Chapel Hill would be omitted from the title of the Durham metropolitan area. The Town also does not qualify to be included in the name of the Raleigh-Durham combined area. The names of the largest principal cities are used in titles of combined areas.

The most obvious advantage of having the Town’s name in the Raleigh-Durham-Chapel Hill MSA is the additional exposure the title provides the Town when, for example, the media refer to the metropolitan statistical area by name, such as magazine rankings of communities nation-wide. When Money magazine in 1994 ranked the Triangle as the best place to live, the article referred to the area as “Raleigh/Durham/Chapel Hill, NC.” An Internet search on Yahoo! for “Raleigh-Durham-Chapel Hill MSA” turned up references to 68 web sites that mention the metropolitan statistical area by name. These pages were from a wide range of sources, including Plants Sites and Parks magazine, the FDIC, the Federal Transit Administration, and X-Change Magazine.

The metropolitan statistical area title, on the other hand, may not have much of an effect on how Triangle residents identify their community. The Durham Convention and Visitors Bureau states on its web site that the MSA name has little to do with a “sense of place.” The Bureau estimated that more than “75 percent of the people in this region prefer to characterize residence by a specific town or city rather than as one large area.”

Effect on Federal Funding

Based on our inquiries, we believe the Town will not lose its status as a Community Development Block Grant entitlement community, which means money from the grant program would continue to flow directly from the Department of Housing and Urban Development to the Town each fiscal year. This fiscal year the Town is to receive $466,000 in Community Development Block Grant money. To qualify as an entitlement community, a city or town must qualify as a “metropolitan city,” by virtue of having at least 50,000 in population or being designated a central city by the Office of Management and Budget. Chapel Hill’s population is less than 50,000. Even though Chapel Hill may lose its central city status, a grandfather clause in the Community Development Block Grant legislation will preserve Chapel Hill’s status as an entitlement community. However, we will need to monitor Congressional legislation periodically to ensure changes are not proposed that would affect Chapel Hill’s entitlement status.

Some federal programs that rely on the metropolitan area definitions will be affected. For example, the Environmental Protection Agency uses the outer metropolitan statistical area boundaries as the starting point for identifying which urbanized portions should be designated as a non-attainment area for a particular pollutant. However, from telephone conversations with the Census Bureau, it remains unclear as to how the addition of the new “combined area” category would affect federal programs that currently use data from statistical areas that have been joined. (See Attachment 3 for a description of how various federal agencies use metropolitan area definitions for nonstatistical functions.)

Another potential consequence relates to the availability of housing assistance from the Department of Housing and Urban Development, an issue that affects the County as recipient. The agency uses metropolitan statistical area data to determine Fair Market Rents, which determine the eligibility of rental housing units for the Section 8 Housing Assistance Payments program. Participants cannot use Section 8 Rental Certificates to rent units whose rents exceed Fair Market Rents. Fair Market Rents are also used to calculate Rental Voucher subsidies.

In addition, the Department of Housing and Urban Development uses data from metropolitan statistical areas to determine Public Housing/Section 8 income limits. The income limits are used to determine the income eligibility of applicants for Public Housing, Section 8 programs, and the Town’s Community Development Program.

According to a conversation with a Department of Housing and Urban Development, this means that housing and income data from a smaller metropolitan area (the new Durham metropolitan area) would be used to determine new housing assistance eligibility criteria. The effect of removing Wake, Franklin and Johnston Counties from this formula will not be known until at least 2003, after the Department of Housing and Urban Development recalculates these criteria based on 2000 census data.

The new Durham metropolitan area would include the Durham-Chapel Hill-Carrboro Urban Area in its entirety.  The State Department of Transportation anticipates that the proposal will not affect funding, according to correspondence from the Department.  Also, the State's equity formula is not affected by metropolitan statistical area boundaries. A benefit of the proposal, according to the Department of Transportation, would be the availability of a more detailed set of information from which to do planning.


October 6, 2000, is the deadline for the Town to comment on the proposal. It is unclear how much influence comments will have in this final comment period. A statistician with the Census Bureau suggested that, while the Office of Management and Budget may not be open to any major changes, the agency may agree to some minor changes.

If the Town Council wishes to preserve the Town’s central city (principal city) status, the Council could request that the Office of Management and Budget consider defining principal cities based on slightly different criteria. Defining principal cities as those that are at least one-fourth the size of the largest place in the metro area, not one-third as proposed, would qualify Chapel Hill, as its population is approximately 27 percent of Durham’s. Such a change would be applied nationally.

We recommend the Town Council adopt the attached resolution.


  1. Office of Management and Budget Memorandum: Final Report and Recommendations From the Metropolitan Area Standards Review Committee to the Office of Management and Budget Concerning Changes to the Standards for Defining Metropolitan Areas (p. 7).
  2. The configuration of the Durham and Raleigh metropolitan areas (based on 1990 census data) under a Federal proposal to adopt new metropolitan standards (p. 16).
  3. Office of Management and Budget Memorandum of May 5, 1994: Use of Metropolitan Area Definitions (p. 17).
  4. September 8, 2000, letter from City of High Point to Mayor Rosemary Waldorf regarding proposed metropolitan area definitions (p. 26).



WHEREAS, the U.S. Office of Management and Budget is considering a proposal that splits the Raleigh-Durham-Chapel Hill Metropolitan Statistical Area into two separate metropolitan areas and;

WHEREAS, the Town of Chapel Hill’s name is not included in the proposed Durham Metropolitan Area because the proposal requires Chapel Hill to have at least one-third the population of the largest city in the metro area and;

WHEREAS, the Town of Chapel Hill is an integral community in the area known as the Triangle and;

WHEREAS, designation as a “principal city” would help assure that the Town continues to receive Community Development Block Grant funds as an entitlement community and;

WHEREAS, the Town of Chapel Hill wishes to keep the Town’s name in the title of the metropolitan area and;

WHEREAS, the Town has until October 6, 2000, to submit written comments to the OMB for the final decision-making process;

NOW, THEREFORE, BE IT RESOLVED by the Council of the Town of Chapel Hill that the Town Council requests the U.S. Office of Management and Budget adopt a standard requiring that principal cities be at least one-fourth the size of the largest place in a metropolitan area, not one-third as proposed.

This the 25th day of September, 2000.