AGENDA #1

MEMORANDUM

TO:                  Mayor and Town Council

FROM:            W. Calvin Horton, Town Manager

SUBJECT:       Proposed Rezonings of Properties - Concurrent Public Hearings on 32 Rezonings

DATE:             March 19, 2001

Tonight the Town Council considers proposed rezonings of 32 properties.  A map is attached showing the locations of these properties (please see Attachment 1).  The Town Council called this public hearing on November 13, 2000, to consider zoning these undeveloped properties in Chapel Hill to reduce the allowable intensity of development to achieve affordable housing objectives.

CONCEPT

We understand the Council’s intent to be to consider rezoning, to a lower density, undeveloped properties throughout Town. The owners of these properties, if they desire to develop at a higher density, could then subsequently apply for conditional use rezoning with an accompanying special use permit application. As part of the conditional zoning and permit process, the owner would have the opportunity to offer considerations for achieving the Council’s policy for providing 15 percent affordable housing. Alternatively, the property could be developed at the rezoned lower density.

PROCESS

This is a Town Council initiative for a Zoning Atlas Amendment.  When a zoning atlas amendment is proposed, the Development Ordinance requires the Town Manager to conduct an evaluation of the proposal, to present a report to the Planning Board, and to present a report and recommendation to the Town Council.  We have reviewed the initiative and evaluated it against the standards of the Development Ordinance, we have presented a report to the Planning Board, and tonight we submit our report and preliminary recommendation to the Council.

Attachment 2 contains a detailed parcel-by-parcel analysis, while Attachment 3 summarizes the Planning Board’s recommendation.  Attachment 4 includes correspondence received.

Public Notice

Notice of this public hearing was sent to the owners of the property proposed for rezoning, and about 3500 owners of property within one thousand feet of the properties (please see Attachment 5).  Staff held two informal information meetings on Thursday, February 22 and Friday, February 23.  Notice was also published in the Chapel Hill Herald on Friday, March 9, 2001 and Sunday, March 18, 2001.

 Information on this proposal is also available on the Town’s web site.  Copies of the agenda materials on this proposal are available in the Clerk’s office and in the Public Library.

Format Tonight

The Council tonight will be holding 32 public hearings concurrently.  The purpose of the hearings is to receive public comment on the proposed rezonings.  Typically the Council refers comments made at the hearing to the Manager and Attorney for a follow-up report.  Due to the volume of material, we anticipate returning to the Council with this follow-up report for Council consideration on May 7, 2001.

Parcel-Specific Analysis

We have prepared detailed information on each of the 32 parcels being proposed for rezoning.  Attachment 2 offers this evaluation.  For each property shown on the Location Map in Attachment 1, we provide an individual summary describing the area, the land use designation, existing zoning, an analysis of zoning issues, and a preliminary Manager’s recommendation.  The accompanying Table 1 summarizes the size, current zoning, proposed zoning, and Land Use Plan designation for each property.  Also included as Attachment 9 is an explanation of the Town’s zoning districts.

Separate Votes

At the time of Council consideration, the Council would need to separately consider and vote on the zoning of each individual tract or tracts that are contiguous and carry the same current zoning.

Protest Petitions

Article 20.3.9 outlines the procedure for property owners to file a protest petition.  The notice mailed to owners and persons owning property within one thousand feet of the subject properties included a statement that information on protest petitions was available from the Planning Department.

TABLE 1:  SUMMARY OF PARCEL ANALYSIS

Owners of parcels proposed for rezoning and surrounding parcels have the opportunity to submit a protest petition for the rezoning for each individual tract or tracts that are contiguous and carry the same current zoning.  If submitted and determined sufficient, a three-fourths vote by Council would be required to enact the new zoning.   The deadline for filing protest petitions was 5 p.m. Wednesday, March 14, 2001. We will report at the Public Hearing regarding those properties for which valid protest petitions have been submitted.

ZONING ATLAS AMENDMENTS

Zoning determines the type and intensity of uses and development that are allowed on a piece of land.  A rezoning involves a change to the zoning of the land.  In Chapel Hill, a rezoning may be requested in two ways:  general use and conditional use rezoning requests.  A general use rezoning request is to change the zoning to a different zoning district in which any of several kinds of developments and uses are permissible.  A conditional use rezoning request is to allow development and uses only with approval of a Special Use Permit.  This rezoning initiative is a general use rezoning.

The zoning designation of a property determines the range of land uses and development intensities permitted on the property.  Article 20, Section 20.1 of the Development Ordinance establishes the intent of Zoning Atlas Amendments by stating:

 “In order to establish and maintain sound, stable, and desirable development within the planning jurisdiction of the Town it is intended that this chapter shall not be amended except:

a)                  to correct a manifest error in the chapter; or

b)                  because of changed or changing conditions in a particular area or in the jurisdiction generally; or

c)                  to achieve the purposes of the Comprehensive Plan.”

Section  20.1 further indicates:

“It is further intended that, if amended, this chapter be amended only as reasonably necessary to the promotion of the public health, safety, or general welfare, and in conformance with the Comprehensive Plan.”

Section 20.2 states that one of the manners in which a rezoning request may be initiated is by “the Council, on its own motion.”

SPOT ZONING

We note that where any small tract of land is considered for a zoning atlas amendment, one of the considerations needs to be whether or not the rezoning would constitute “spot” zoning.  “Spot zoning” is defined as follows:

A zoning atlas amendment which singles out and reclassifies a relatively small tract of land owned by a single person and surrounded by a much larger area uniformly zoned, so as to impose upon the small tract greater restrictions than those imposed upon the larger area, or so as to relieve the small tract from restrictions to which the rest of the area is subjected.

We also note, however, that recent court cases in North Carolina have upheld that spot zoning is legal when there is a reasonable basis for a municipality’s action.  A reasonable basis is determined by several criteria including:

·        whether or not the use constitutes a use valuable to the surrounding community, and

·        the similarity between the proposed use of the tract and the current uses already present in the surrounding areas.

In North Carolina, spot zoning is not necessarily illegal.  Spot zoning, however, must be clearly supported by a reasonable basis to be upheld, a higher standard than normal rezoning cases where courts usually defer to the political judgment of the local decision makers.  According to David Owens of the N.C. Institute of Government, a local government “adopting a ‘spot’ zone has an affirmative obligation to establish that there is a reasonable public policy basis for doing so”  (please see Attachments 6 and 7).

BACKGROUND

On November 13, 2000, the Town Council called this set of public hearings.  A series of discussions led up to this action, starting in January 2000.  A summary of the discussions to date follows:

On January 10, 2000, the Council discussed a draft Mixed Housing ordinance, which would be designed to require that small houses be built as part of new subdivisions.  The Council called a Public Hearing for March 20, 2000.

On March 20, 2000, the Council held a Public Hearing on the Mixed Housing ordinance.

On April 10, 2000, the Council considered action on the Mixed Housing ordinance.  In response to Council requests at the March 20 Public Hearing, we offered additional ideas about possible affordable housing initiatives.  Three options were outlined for the Council:

1)      Adopt a Mixed Housing Ordinance;

2)      Conduct a survey of other municipalities’ programs to develop additional ideas for Council consideration; and

3)      Establish an affordable housing incentive using the conditional use zoning and special use permit process. 

We recommended that the Council select Option 2.  At that meeting, following the adoption of a new Mixed Housing Ordinance, the Council indicated its intent to consider a related proposal to establish an affordable housing incentive through rezoning. The proposal would provide the Council, through the conditional use and special use process, a tool to encourage affordable housing in future residential developments of a higher density.  The proposal called for rezoning, to a lower density, undeveloped properties throughout Town. The owners of these properties, if they desire to develop at a higher density, could then apply for conditional use rezoning with an accompanying special use permit application. As part of the zoning and permit process, the owner would have the opportunity to offer considerations for achieving the Council’s policy for providing 15 percent affordable housing. Alternatively, the property could be developed at the rezoned lower density.

On August 28, 2000, the Council agreed to consider rezoning those properties that meet all of the following criteria:

·        Privately owned property;

·        Undeveloped property that is at least three acres in size, or property that is at least three acres in size and on which only one dwelling is located; and

·        Properties not currently encumbered by an approved site plan (Master Plan, Special Use Permit, Subdivision, Site Plan Approval).

We understood the Council’s intent to be the consideration of rezoning to a low-density residential designation, such as Residential-1 (three dwelling units per acre). Any development proposed at a higher intensity would require a rezoning request, at which time the Council could encourage affordable housing to be included in the project.

On September 11, 2000, we outlined a process to implement an affordable housing initiative as the Council had requested, and proposed maps of properties meeting the Council’s criteria.  At that meeting the Council referred the maps back to the Manager for further refinement.

On November 13, 2000, the Council called this Public Hearing to consider rezoning 32 properties.  

Memoranda from each of these Council meetings are attached, and appear here as Attachment 8.

DISCUSSION – ANALYSIS OF PROPOSAL

We understand the Council’s intent to be to consider rezoning, to a lower density, undeveloped properties throughout Town. The owners of these properties, if they desire to develop at a higher density, could then subsequently apply for conditional use rezoning with an accompanying special use permit application. As part of the zoning and permit process, the owner would have the opportunity to offer considerations for achieving the Council’s policy for providing 15 percent affordable housing as contained in the Comprehensive Plan.

In the Comprehensive Plan adopted by the Council on May 8, 2000, the following policy is included: 

As a general policy, the Town should encourage developers of residential developments of five or more units to 1) provide 15 percent of their units at prices affordable to low and moderate income households, 2) contribute in-lieu fees, or 3) propose alternative methods so that the equivalent of 15 percent of the units will be available and affordable to low and moderate income households.

In addition, an objective of the Comprehensive Plan is:

Housing Variety:  Establish policies, regulations, incentives, and programs to promote the availability of a full range of housing types, densities, costs, and tenancy options in Chapel Hill, both within new developments and existing neighborhoods.

In this Discussion section, we analyze information related to the Council’s consideration of the initial rezoning to a lower density.  Any subsequent applications for conditional use zoning and special use permits would need to be initiated by property owners, and undergo a full public review based on the Town’s Development Ordinance and Comprehensive Plan.

Zoning Justification

Article 20 of the Development Ordinance establishes the intent of Zoning Atlas Amendments by stating:

“In order to establish and maintain sound, stable, and desirable development within the planning jurisdiction of the Town it is intended that this chapter shall not be amended except:

a)                                to correct a manifest error in the chapter; or

b)                                 because of changed or changing conditions in a particular area or in the jurisdiction generally; or

c)                                to achieve the purposes of the Comprehensive Plan.”

We believe the justification for the Zoning Atlas Amendments as called for in this rezoning proposal would not relate to either a manifest error or changing conditions. An argument for rezoning the parcels to the lower density is that it would achieve the purposes of the Comprehensive Plan, specifically the goal of promoting affordable housing.

A question for the Council to consider is how the initial change of zoning of the properties to Residential-1 would lead to achievement of the affordable housing goals of the Town’s Comprehensive Plan. If a rezoning is not subsequently sought, then affordable housing may not be constructed on a particular property.  In the event that higher density zoning is not requested with an affordable housing component, the rezoning to Residential-1 would serve other purposes of the Comprehensive Plan, such as limiting the impact on schools and infrastructure.

Affordable Housing Objective

On November 13 we offered our observations on the pros and cons of this approach to increasing the supply of affordable housing in the community.  We offer those observations again, as follows:

Arguments in Support

If owners of the properties affected by this initiative return to the Town to apply for zoning allowing a higher intensity of development through the special use and conditional use process, the Town could then seek to have 15 percent of the dwelling units be affordable. The table below lists the zoning categories that permit a higher intensity of development than Residential-1 (three units per acre).

If owners apply to return their property to the current or higher density, the Town could require through the rezoning process as many as 133 units to be affordable. This number assumes the properties are built to the maximum density possible, and does not take into account  environmental and other site constraints. The table below shows how many units could be built on the parcels according to the maximum densities the parcels’ current zoning permits.

Arguments Against

It is unknown how many of the affected property owners would apply to have their property rezoned to a higher residential density in the future. If no or few rezoning proposals result, the proposal has the potential to produce a different result:  Lower density housing than what otherwise would have been built.

Secondly, if the properties are developed under Residential-1 zoning, the initiative could result in higher housing prices and reduced housing choice.  Houses on larger lots, due to land and infrastructure costs, generally are more expensive than houses built on smaller lots. The difference, however, may be marginal comparing houses built under Residential-1 zoning (1/3-acre lots) with Residential-2 (1/4-acre lots) zoning. Development at Residential-1 densities of the 174 acres affected by the initiative would result in a maximum of 522 dwelling units, compared to the 881 maximum allowed on these parcels under the current residential zoning.

Another issue is the fact that rezoning back to a higher density later would go through a full review and analysis in terms of the Development Ordinance and Comprehensive Plan. Proposals to increase density often generate neighborhood opposition, especially in areas where existing density is relatively low.

Potential Impacts on Urban Services and Infrastructure

Arguments in Support

A second possible justification for the proposed rezonings would be the capacities of critical elements of community infrastructure.  The Town’s Comprehensive Plan notes that capacity problems are being experienced in some areas of necessary community infrastructure, and calls upon the Town to “manage the growth of the community in tandem with provision of adequate public facilities.”

Two components of community infrastructure, particularly, are under stress:  roads and schools.  Planned capital improvements will expand capacity in the future, but quantifiable problems exist today.  Key arterial roads in Chapel Hill are currently experiencing greater volumes of traffic than capacity can accommodate, and still maintain acceptable levels of service.  For example:  The stated Level of Service desired for all roads in Chapel Hill is Level of Service D.  Current average daily traffic volumes currently exceed Level of Service D capacity on the following key community road segments (Source:  North Carolina Department of Transportation 1999 Average Daily Traffic Counts):

South Columbia Street south of Mason Farm Road

I-40 east of NC 54

US 15-501 south of NC 54

Weaver Dairy Road east of NC 86

Erwin Road north of US 15-501

US 15-501 north of Erwin Road

Estes Drive east of NC 86

Franklin Street northeast of Estes Drive

In addition, we understand that school enrollment exceeds the capacities of Chapel Hill-Carrboro City Schools at both the elementary and middle school levels.  A new middle school that is planned to open in August, 2001 will relieve capacity shortfalls at that level, but elementary overcrowding is expected to persist at least through 2003. 

Actions that would decrease the allowable levels of development, such as the proposed rezoning of property to reduce intensity levels, could help minimize the negative impacts of growth on road and school capacities.

Arguments Against

As reflected in the chart attached to this memorandum, lower density (R-1) residential development is not consistent with the land use plan designations for many of these parcels.  In addition, the difference between the density allowed by the current zoning of many of these parcels and the proposed lower, R-1 zoning is not substantial.  Further, development at the current zoning, as opposed to R-1 zoning would not result in any significant additional burden on urban services and the Town’s infrastructure. 

RECOMMENDATIONS

Planning Board’s Recommendation:  On February 20, 2001, the Planning Board voted to recommend that the Council not rezone any of the 32 properties.  (Vote:  7-0).  A Summary of Planning Board Action is attached (please see Attachment 3).  

The Planning Board also agreed to suggest to the Council that the Town look at the possibility of using Town-owned property for affordable housing (with specific references to a recently-acquired parcel on Erwin Road and to the Greene Tract), and that the Town calculate the costs of applying for conditional zoning/special use permits. 

The Board also suggested that if the Council does decide to pursue rezoning, that only parcels with the following characteristics be considered:

1. Only parcels currently with residential zoning; and
2. Only parcels 5 acres or larger in size.

Manager’s Preliminary Recommendation:

The Council has indicated a willingness to consider this approach to achieve the housing goals and objectives of the Comprehensive Plan by calling this public hearing.   In general, there is some uncertainty as to whether this proposed set of rezonings would achieve additional affordable housing.   We believe some of these parcels are of a size and nature that would make consideration of R-1 zoning more reasonable and the likelihood of success in achieving affordable housing production higher than other parcels.

Our specific preliminary recommendation for rezoning each of the 32 tracts under consideration is listed at the end of each individual parcel analysis and takes into consideration the specific characteristics of each situation.  The accompanying Table 2 provides a Summary of Recommendations.

We note that the Town Council has asked to be informed in cases where there is a difference of opinion between the Town Manager and a Department Head over recommendations to the Council.  In the case of this rezoning proposal, the Planning Director after review of these properties has recommended that none be rezoned.  The Town Manager’s preliminary recommendation is to rezone 16 of the 32 properties.  The arguments in support of and against these proposed rezonings appear above.

ATTACHMENTS

1. Location Map (2 pages)
2. Description/Evaluation of 32 parcels proposed for rezoning (please note the maps in these descriptions are shown at varying scales) (45 pages)
3. Summary of Planning Board Action) (1 page)
4. Correspondence Received (4 pages)
5. Notice to Property Owners (3 pages)
6. Excerpt from Institute News on spot zoning issue, by David Owens of the Institute of Government (1 page)
7. Article on spot zoning by David Owens (8 pages)
8. Collection of 7 previous Council Memoranda on this subject (40 pages)
9. Explanation of Zoning Districts (7 pages)

TABLE 2:  SUMMARY OF RECOMMENDATIONS