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Council Hears Mixed Reactions to NCOD Proposal

• Fallonia03/21 12:34 PM

  Thanks for posting this. Existing residents appreciate the recognition that their property rights, and values, are being trampled by this all-for-profit wave of development. In actuality, redevelopment of this magnitude would be going through the planning process if it were not for the fact that this is multiple players buying individual properties. It is taking advantage of loopholes in existing zoning ordinances that did not anticipate anything like this. People like Harter, who speak constantly of their future potential retirement nest-egg, cannot even see the damage to those whose actual real money investment is threatened today.

  Particularly useful is your posting of the Planning Department’s presentation. I recommend the slideshow to all who are trying to sort this issue out. Please note, however, that this tool is not a total solution. It does provide a way to add a layer of protection to existing neighborhoods with acceptance by 51% of property owners. The longer it takes to get this off the ground, though, the more non-resident property owners a neighborhood may have. It is possible that the neighborhood battles could get pretty ugly. Each property gets one vote. So if I own 6 properties, I get 6 votes. Shortening and demystifying this process is a good thing. Will it help neighborhoods retain predictability and stability? We will see.

  Fallonia Parker

• dbearhug03/21 06:54 PM

  It’s interesting watching the evolution of land use that’s playing out right now.  The first wave was the agricultural use of previously undeveloped land followed by a second wave of residential development.  There will come a time when that housing stock becomes blighted and either will have to be renovated turned into a third wave of complete and total re-development. 

  How soon will those early 20th Century automobile-centric suburbs fall by the wayside and what will replace them is anybody’s guess.  Nothing that is built is meant to be permanent.  But, I imagine that the process will be as painful as anything that is currently playing out in this debate.  Just an observation…

• HelenTart03/23 02:06 PM

  It is indeed very good that the article above includes the posting of the presentation made by the Planning department.
  One point that is important to note about these public hearings: No one from the panel or from staff is allowed(or willing? to correct the statements made by the public speaking in the “hearing” part of the meeting.
  For example this incorrect information from a confused person at the hearing that is repeated above:
  “This is because no building permits would be approved or subdivisions approved while the case is pending; unless they conform to proposed NCOD regulations.“
  The restriction only applies after the completed ordinance is approved by the Council. The process of developing the ordinance could easily take 6 to 8 months. That is enough time for a business or a group of businesses to finish buying up 51% of a neighborhood and thus blocking the NCOD.

  Apparently (according to the Planning Director) there is a fairly lengthy process that happens after the ordinance is approved. It is during this process that the restriction applies.

• spiro03/23 07:04 PM

  Ms. Parker is wrong. 

  If “their property rights, and values, are being trampled by this all-for-profit wave of development”, then these supposed victims of the profit-mad developers would be suing them for damages.

  Think about it - how many people buy real estate to lose money?

  Also Ms. Tart is confused.

  Once the NCOD regulations are approved, a zoning change can be requested and it is during the process of this zoning case that building permits are frozen if they do not comply with the NCOD regulations.

• Bo Bromhal03/25 01:02 PM

  “Existing residents appreciate the recognition that their property rights, and values, are being trampled by this all-for-profit wave of development.“

  What are the property rights being infringed upon?  How many cases - in Raleigh - can be cited where a neighboring property owner has had their value decrease?

• Fallonia03/25 02:48 PM

  People who have renovated their homes to the normal price range in their community, who get a house 2x price and 3x price next door are affected downward. Numbers vary,  but the renovated house loses value faster in this situation, as it is now “inadequate” to the new price range. Price of the land rises, house value decreases due to quality of life issues, teardown potential, and neighborhood unpredictability. There are quantitative studies, but not going to post private info here.

• James03/26 03:31 PM

  Existing homeowners do not have any “property right” to tell their neighbor what they ought or ought not to build, and they knew this when they bought.  If they desired, they could have had these restrictions through covenants and Architectural Review Boards, and sought agreement by all homeowners freely, but do not, and did not pay for the “right”, which is not really a “right” at all, merely a “restriction”.  To impose these unentitled “rights”, which are really restrictions on use of private property by Government on those who have not asked for it, is a taking, a diminution in tax base value, a diminution in private property value, and an improper use of government power.

  If you don’t like what the private market does, then you will assuredly not like the City Council as your Architectural Review Board, especially when the lost revenue will have to be made up with enhanced taxes to pay for water facilities and City services.  Be careful what you ask for.  Similarly heavily regulated cities like Shaker Heights, Ohio, who have cute, quaint cottages and prohibit tear downs also have tax payments each month equal to or greater than the mortgage payment on the cute quaint cottage.  If you desire these restrictions, then ask your neighbors to agree to enter into a covenant, but don’t ask the City to impose it on your neighbors unilaterally, and without consent.

  The moment the NCOD regulation is adopted, I would immediately seek tax abatement from the City for the lost property value taken.  The City, as a matter of sound fiscal policy, should not be willing to cap the value of the tax base for the property.

  Finally, I bought (and paid the market price) for my house WITH the capability of adding on.  As written, I could not make the addition due to the setbacks.  My purpose for the add on is to add living space for aging parents, in lieu of a nursing home.  This would leave me paying a mortgage for value sucked out of the property by government regulation, and paying for the nursing home too.

• wildem03/27 09:29 AM

  Air rights need to be included in this whole preservation, equitability debate.  If one does not build out their property to the maximum buildable square footage they should be compensated. Excess airspace could be sold off to developers who want increased mass. Dieheart preservationist could just refuse to sell their rights, a neighborhood group could band together to preserve it’s character, poorer folks who cann;t afford to expand or don’t want to heat more space than they can use could sell off their excess space.

• Bo Bromhal03/27 12:49 PM

  Fallonia - I’d have to get one or two specific examples of folks who have renovated or added on to their homes but because of adjacent tear-down activity have tried to sell their home for a market value and have failed - in Raleigh.  As I’ve noted elsewhere, I am a Realtor, and so particularly in the areas everyone mentions, I cannot think of one home that sold for less than its market value because a brand new home 2x or 3x the size was built next door.

• Fallonia04/01 02:40 PM

  I can show you several empty lots in teardown areas. One house sold for $50K less than asking price after a year on the market between two large homes. On one side, a resident’s 3 story renovation at neighborhood market prices, and on the other a speculative lot-hugger at double the neighborhood market price. The lot has been for sale, sans house, with the $50K bonus, for probably 6 months.

  I am watching the values of several other homes as things change.

  Another empty lot (could have been sold as a house and lot to a real buyer), is now priced at the previous purchase price, the cost of the demolition is on the last buyer. They tried to get their $50K, but are now trying to sell it outright. I think this one’s problem is predicability.

  It is clear to me that a renovation or an updating of a home within or slightly above the current value of the neighborhood, raises values for neighbors.  Having spent my adult life in one home, I can track the values up and down.

  However, a street with homes as high as $1M and as low as $350K, suffers from the predictability factor.  I could sell my home at a high value to a family who may wish to do a little more work on it. And they would know they could sell it for a good value for their investments in it.

  If, however, the house on one side is torn down and replaced with something in the Upper Upper Economic bracket, my house is now valued more for its lot than its real value. My money in the renovation matters not. As a real practical issue, as my home ages, do I fix the basement, replace the windows, repaint, trim my trees. All these expenses were investments in my property when I was growing value in my home and lot together.

  So basically, you are changing the equation by which these things have been measured. I challenge some of the thinking however. There is no way that existing residents are not affected by the sudden arrival homes that are double the price and triple the size of the normal homes on their street. Not everyone measures value in dollars only. My investment included an expectation that I could live out my life in my home as I paid for it. The scale of changes may mean that I have to sell my home to survive. While I might be able to get 25% more for a more valuable street, I could get up to 25% less if the street becomes a construction site for large double-the-price homes.

  Quoting an article on the situation in Nashville Tenn:
  (quote on) The visual impacts of the tear-down phenomenon sweeping across southwest Nashville are clear to anyone with a working eyeball. The economic impacts are less obvious, but no less real.

  Builders see themselves as adding value to the neighborhood when they replace a small house with a gigantic one. But what they’re ratcheting up by tear-downs is land value, not the older structure on it. When a buyer pays $400,000—or over a million as recently happened in Belle Meade—for a piece of property and then tears down the existing house, it’s essentially paying that amount for just the lot. “So what the market is saying,” according to Randy Ward, the property assessor, is that the torn down house “had minimal value.” And that affects the values of surrounding houses. One tear-down in a neighborhood doesn’t necessarily mean your house is worth nothing but the dirt it’s built on, but several tear-downs nearby certainly can, says Ward. “In Belle Meade, for example, we’ll make a list comparing what a vacant lot sold for—say $650,000—with what a tear-down property of similar lot size sold for. Most of the time, we’re not seeing much difference. So we’ll assess less for the existing houses. But that doesn’t offset the much greater assessment for the land.” Ward says rising land values have many worried about their next assessments. “I get calls every day, especially from senior citizens on fixed incomes; they’re concerned that they won’t be able to pay their property taxes.”

  And all the new construction can actually erode the value of fine but older houses. “A 6,000-square-foot house of the 1920s or ’30s, like you see in Belle Meade and Green Hills, even if renovated with new baths and kitchen, is still in some ways obsolete,” Wachtler explains. “It doesn’t have walk-in closets, or a great room, or a bath for every bedroom. So new construction outsells the old in some areas.” (quote off).

  No one is suggesting that major renovations are harmful, they generally keep a bit of the original tone of the neighborhoods. And the are such creative problem solvers, they are fun to watch. My neighborhood has been fortunate to have some top-notch work done by some really good companies for the past 20 years. Their specialty has given them a high profile and made them much sought after for jobs. No problem there.

  This other phenomena is something else entirely. And you in real estate know that you used to match neighborhoods, houses and potential for buyers and sellers alike. No more. Buy opportunity, not homes.

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