Development The Right Way
This is David Schwartz.
Last week, this radio station aired an interview with Chapel Hill resident Roger Perry in which Mr. Perry discussed the town’s fiscal challenges and suggested ways to remedy them. It is no surprise that Mr. Perry, who makes his living building real estate, believes that we should—guess what?— build more real estate! However, there is an odd disconnect between what Mr. Perry says we should be doing and what he himself is doing.
For example, Mr. Perry is correct that our commercial tax base is too small relative to the size of our residential tax base. In general, residential property consumes more in town services than it generates in tax revenue. Conversely, commercial property—and especially industrial property— generates more tax revenue than it consumes in town services. Thus, if a town has too much residential property relative to the amount of commercial property, the tax burden on residential property owners will be uncomfortably high. That’s the situation in which we find ourselves.
So how did Chapel Hill’s balance between commercial and residential property get so out of whack? In part it’s because real estate developers, including Mr. Perry, have spent the past few decades building dense new housing all over town without building a commensurate amount of commercial property. If, instead of building hundreds of new homes on the farms that became Meadowmont and Southern Village, we had developed some of this land for commercial research and light industrial activities, our current fiscal situation would probably be much rosier.
This brings us to the subject of Ephesus-Fordham. Mr. Perry further stated in his interview that the many town citizens who raised concerns about the Ephesus-Fordham project either focused on the wrong problem or didn’t have all the facts. He is mistaken. The citizens considered the redevelopment plan produced by the Town staff unsatisfactory precisely because it will exacerbate the very problem Mr. Perry describes; that is, it will add too much new residential property and too little new commercial property. Mr. Perry’s own firm, in fact, is planning to build a new high-density apartment complex on the site of the former Plaza movie theater. You heard right: Mr. Perry, who counsels us on the need to create a better balance between commercial and residential property in Chapel Hill, intends to turn a former commercial property into hundreds of units of new housing. How, exactly, is this going to help the town achieve the more favorable ratio of commercial to residential property that Mr. Perry says we need? And under the new zoning that the Town Council approved for the Ephesus-Fordham area, the other commercial property owners in the district are likely to do the same. It’s very possible, therefore, that when Ephesus-Fordham is fully built out, Chapel Hill’s imbalance between commercial and residential property will be even worse than it is today.
If Mr. Perry is serious about wanting to help the Town address its fiscal challenges, let him practice what he preaches: let him stop building new housing in Chapel Hill and instead devote his considerable talents and resources toward developing commercial research and light industrial facilities. He can start with Obey Creek.