2016 Chamber Annual Meeting


Tom Ross Honored By Chapel Hill-Carrboro Chamber

Former UNC system president Tom Ross was given the Duke Energy Citizenship & Service Award by the Chapel Hill-Carrboro Chamber of Commerce during its Annual Meeting on Tuesday.

As the event’s keynote speaker, Ross delivered a speech on the value of higher education.

“Today it’s my fear that colleges and universities in this country are considered increasingly as nothing more than factories that must demonstrate an immediate return on investment,” he said. “We hear constantly, calls to drive out cost and to produce more product for less cost. There’s far less talk about academic quality and excellence.”

He said if nothing else, North Carolinians should care about higher education because of the economic benefits it brings to the state. Ross said the 9.3 billion dollar budget makes the university system the 11th largest industry in the state.

“In 2013, the UNC System creates 27.9 billion dollars of added economic value to the North Carolina economy,” he said. “It has the equivalent impact of creating more than 426,000 jobs.”

Ross said he was concerned with what he called the divestment in education and said this has led to other nations and other states catching up to the UNC system.

“We now spend two percent more on higher education in real dollars than we did 25 years ago,” he said. “During that same time period our enrollment has grown 60 percent. We’re spending more than 30 percent less per student today than we did 25 years ago in this country.”

Ross ended his speech by calling on residents of North Carolina to make their voices heard and tell their representatives that they want to increase funding for the system.

He also encouraged people to vote in favor of the Connect NC Bond, which will invest nearly half of the two billion dollars raised in the UNC System.

“So if I’m right, we must reverse the 25 year trend and begin investing again in our public universities,” he said.

Tom Ross’ Speech at Chamber Annual Meeting 1.26.16


Orange County Is Wealthy, But Poverty Still Widespread

Orange County is one of the wealthiest counties in North Carolina, but poverty is still a major issue.

How widespread is it?

“3,820 children in Orange County live in poverty,” says Chapel Hill-Carrboro Chamber of Commerce president Aaron Nelson, quoting numbers from the U.S. Census Bureau. “That’s a lot of children waking up in one of the richest counties in the state of North Carolina, in poverty.”

As of 2013, the latest available data, about 3800 Orange County children were living in poverty – about 13.4 percent of all Orange County kids. On the plus side, that’s down from a peak of 4800, or 17.4 percent, at the height of the recession in 2010.

“We’ve been bending down, and that’s really good news,” says Nelson.

But not every measure of childhood poverty is trending down. Nelson says the percentage of students receiving free and reduced lunch is still on the rise, in both of Orange County’s school districts.

“Orange County Schools (is) at 43 percent, up from 32 percent in 2006-07, (and) Chapel Hill-Carrboro City Schools is also on the increase, from 21 to 28.2 percent,” he says. “This number is not showing that trend down in poverty.”

And while the number of families receiving food and nutrition services (food stamps) is down slightly, it’s still significantly higher than it was even in the midst of the recession. 6,087 Orange County families receive food stamps today – down from a peak of 6,533 in 2013, but virtually unchanged from four years ago and well up from 4600 in the middle of 2010.

“The recession is long over, and yet this number (has) continued to grow,” Nelson says.

Nelson says the recent decline is good news, but the long-term trend is still sobering. In 2007, prior to the recession, only 2,900 Orange County families received food stamps. That number has more than doubled.

Orange County’s overall poverty rate is 15.5 percent, slightly below the 17.9 percent rate for the state as a whole – and surprisingly, more than 23 percent of Chapel Hillians live in poverty. Nelson says the student population skews that data a bit, but “I don’t want to discount that we do have poor students too, who really are struggling to make their way through college or community college.”

And he says the percentage of children living in poverty is a reminder that this is a very real issue in our community, students or no students.

Nor is a decline in poverty necessarily an entirely good thing. Nelson says there’s a correlation between the improving economy and the drop in poverty – but correlation does not equal causation. Is Orange County’s childhood poverty rate declining because poor families are moving out of poverty? Or is it because poor families are simply moving out of Orange County?

Nelson says it’s not clear. But there is one more troubling statistic. In the year 2000, according to the Urban Institute, there were 1,839 housing units in Orange County that were available for “extremely low income” households – or households making less than 30 percent of the county’s median income. At the time, Orange County had about 6,000 households fitting that description.

As of 2013, Orange County still had about 6,000 “extremely low income” households – but the number of available housing units had dropped almost in half, from more than 1800 down to 1,022.

Nelson says we’re seeing that trend in every county in the region.

“And I did some math – do you know what your wage is if you make minimum wage, working 40 hours a week, 52 weeks a year, you never take a vacation or a sick day?” he says. “It’s $16,500.”

Thirty percent of Orange County’s median income is $20,300 – so there are about six thousand households in Orange County making less than or barely over minimum wage (some of them students but not all), and the number of available housing units for those families has been shrinking rapidly for more than a decade.

Nelson made those comments last month, delivering his annual State of the Community report.

You can check out the full report here.


More And More Commuting Across County Lines

For years, local policymakers have been trying to create opportunities for people who live in Orange County to work in Orange County – and for people who work in Orange County to live here too.

But every day, thousands of Orange County residents get in their cars and drive to work somewhere else – and thousands of people who live somewhere else get in their cars and drive to work here.

“40,000 people drive into Orange County every morning, 37,800 people drive out of Orange County every morning – and (only) 19,000 folks wake up and work in Orange County,” says Chapel Hill-Carrboro Chamber of Commerce president Aaron Nelson.

And he adds that the number of people both living and working in Orange County has been trending downward for more than a decade. “45 percent of (Orange County residents) in 2002 lived here and worked here,” he says. “That’s down now to 34 percent.”

Among other things, Nelson says, this poses a challenge for our transit plan.

“We’ve designed an entire transit system to move people within our community,” he says. “If we’re more regionally employed, what is that going to mean for our transportation solutions?”

And while we often assume that people who commute into Orange County do so because they can’t afford to live here, Nelson says that may actually not be the case.

“We (think) we’re exporting high-wage white-collar workers and importing unskilled, semi-skilled work – but it’s not true,” he says. “19,000 people drive out for a job that pays $40,000 or more – and 19,500 people drive in for a job that pays $40,000 or more. We have 6,800 people driving out for a job that pays less than $15,000 – and we have almost the exact same number of people driving in (for similar-paying jobs).

“When we look at these as percentages, they’re really – shockingly – the same.”

What that means, Nelson says, is that addressing this issue may not be simply a matter of building more low-cost housing – it might also be about making connections.

“We must better connect local workers with local work opportunity, and that will dramatically change our in- and out-commute,” he says. “If we can specifically try to employ folks that live in our market, that will have great positive change – for the environment, for the lack of civic participation that happens when we commute, and the roads that we have to build and the transit system.”

And Nelson says it’s especially important to start making those connections now – because this trend, fewer and fewer people living and working in Orange County, is especially pronounced among residents under 30.

“There are 600 fewer young people – 15 percent fewer young people – living and working in our community over a two-year period,” he says. “That’s a trend I do not like.”

Nelson made those comments last month while delivering his annual State of the Community report.

You can check out the full report here.


Gap Is Narrowing, But OC Homes Are Costlier, Older

Affordability is a major issue here in Orange County, especially when it comes to housing. But just how much does local housing actually cost?

“Almost 50 percent higher per square foot than Durham,” says Chapel Hill-Carrboro Chamber of Commerce president Aaron Nelson.

The average closing price for a house in Orange County was almost $330,000 in 2014, up slightly from the year before. Nelson says that’s actually not the most expensive in the Triangle: “For the first time, Chatham County’s homes passed Orange County’s homes (by about $4000) in terms of most expensive,” he says. But the average Orange County home is still considerably more expensive than in Durham, where the average closing price was just over $200,000.

And Orange County is still the most expensive per square foot: it cost $149 per square foot to buy an Orange County house in 2014, compared to $126 in Chatham, $111 in Wake, and $101 in Durham.

This difference has long been an issue for local policymakers. Nelson says the gap does appear to be closing: the average home price went up 3.5-4.5 percent in Durham, Wake and Chatham Counties in 2014, but less than 1 percent in Orange – and the cost per square foot actually decreased in Orange County last year.

But there’s another thing to consider: Nelson says Orange County’s housing stock is also quite a bit older.

“The average age of a $300,000 house in Wake County is 2005, (but) the average age of a $300,000 house in Orange County is 1985,” he says. “So you can have a newer house in Wake County for the same price.”

How important is that for potential home buyers? It’s not clear. But Nelson says Orange County did see a drop in the number of homes sold in 2014 – 1,432 in all, still well up from the recession years but about 200 fewer than in 2013.

Nelson made those comments last month, delivering his annual State of the Community report.

You can check out the full report here.


Rental Prices Still On Rise In OC

The affordability issue is a big one in Orange County, and it’s an issue with many facets – one of which is the cost of rental housing. How is the cost of rental housing changing in our community?

“My view (is that) we have a supply-demand problem,” says Chapel Hill-Carrboro Chamber of Commerce president Aaron Nelson. “Great schools (and) great quality of life (combined with) limited supply of housing has been a big driver pushing prices up.”

How much is the cost of rental housing going up? According to U.S. Census data, between 2007 and 2009, 70 percent of Orange County renters were paying between $500 and $1000 per month for their units, while about 23 percent were paying more. Nelson says that’s changed.

“Now 23 percent (are) paying between $1000 and $1500 – that’s up – and the percentage of people paying more than $1500 a month is now at 11 percent,” he says. “Taken together, that’s 34 percent of folks paying more than $1000 a month.”

Sixty percent of Orange County renters still pay less than $1000 a month – but that’s down 10 percent from 2009, even though the cost to buy a house in Orange County has remained nearly flat.

But what’s important isn’t so much the dollar amount itself as the ability of residents to afford it. Housing is considered “affordable” if it takes up 30 percent or less of your income before taxes. By that standard, can Orange County residents “afford” the homes they’re renting?

Nelson says some of us can. According to the census data, 42 percent of Orange County residents are paying less than 30 percent of their incomes on rent. But over half of us are paying more – in some cases, much more.

“30 percent of the population of Orange County is spending more than 50 percent of their pre-tax (income),” Nelson says. “In take-home (terms), that’s 60-some odd percent…

“And that’s just the rent part. When we say ’30 percent equals affordable housing,’ we mean rent plus utilities.”

And of course that number only counts those people who still choose to live in Orange County – not those people who choose to live elsewhere, or have chosen to move out.

“And so this is (still) a real challenge we have in our community, the cost of housing,” Nelson concludes.

Nelson made those comments last month, delivering his annual State of the Community report.

You can check out the full report here.


Population Growth Is Coming (Especially In Mebane)

Growth is a hot topic in this year’s local elections and a major component of just about every key discussion in local politics.

But just how fast is Orange County actually growing?

“We doubled our population in the last 30 years, (and) we’re expected to double it again over the next 40,” said Chapel Hill-Carrboro Chamber of Commerce president Aaron Nelson during his annual State of the Community report last week.

View the full report here.

According to the 2010 census, Orange County’s population was a little less than 134,000. Today that’s roughly 140,000 – and by 2020, we’re projected to add another 20,000 residents, for a total of 160,000.

And the number keeps growing from there: nearly 200,000 by 2030, more than 230,000 by 2040, and more than 277,000 by 2050 – or about twice what our population is today.

Nelson says nearly all of that growth will be in the cities. By 2050, Chapel Hill will have a population of 114,000, about twice what it is today; Hillsborough will double from 6,000 to 12,000 residents; and Carrboro’s population will more than double, from about 20,000 today to more than 50,000.

But there’s a fourth municipality as well.

“The big surprise is Mebane,” Nelson says. Mebane today has about 1,800 residents – but given current projections and development plans, Nelson says that’s expected to balloon to more than 42,000 by 2050, more than twice the size of Carrboro today.

“And this is the Mebane of Orange County,” Nelson says. “This is not all of Mebane –  this is the Mebane piece in Orange County that’s expected to grow to 42,000 people.”

That’s in a space of just two square miles, a third the size of Carrboro.

But while all that growth may sound daunting, Nelson says it’s important to keep it in perspective. For one thing – for better or worse – Orange County is not expected to grow nearly as fast as the Triangle’s other counties.

“In Wake County, someone was telling me, 50 people a day are moving in – (that’s) an elementary school classroom a day,” Nelson says. “We are growing dramatically slower – we will only take 5-7 percent of the total population growth expected for the entire Triangle.”

And while all that extra population will make our towns a lot denser, Nelson says Chapel Hill and Carrboro are not nearly as dense as many of the other college towns with which we like to compare ourselves.

“Chapel Hill in 2030 (will still be) less dense than (present-day) Boulder, Ann Arbor, Burlington, and Charlottesville,” he says.

Still, Chapel Hill is going to become significantly denser than we’re used to. In 2030, Chapel Hill will have nearly 4,000 residents per square mile. To put that into perspective, Carrboro today contains a little more than 3,000 residents per square mile – and that’s the highest population density of any town in the state.


“Retail Gap” Grows In Orange

After years of concerns about low retail sales in Orange County, the last two years have seen a big spike – but there’s still a large “retail gap” between what Orange County businesses sell and what Orange County residents buy.

And Chapel Hill-Carrboro Chamber of Commerce president Aaron Nelson says that gap is actually growing.

“Orange County’s retail demand (in 2014) was $1.8 billion, (compared to) $0.9 billion in retail sales,” he said last week during his annual State of the Community report.

View the full report here.

What those numbers mean: in 2014, Orange County residents spent a total of $1.8 billion on retail goods – but Orange County businesses only took in about $900 million in retail sales.

That’s a “retail gap” of $866 million – and even though Orange County businesses are seeing more sales, Nelson says that retail gap is getting bigger because Orange County residents are spending more too. In 2012, Orange County’s retail gap was $728 million – and it went up by 19 percent in just two years.

That confirms what we already knew: in spite of the “shop local” mantra, Orange County residents are still leaving the county to buy a lot of their retail goods.

“General merchandising stores are the place where you see the biggest gap,” Nelson says. “Doesn’t surprise you, right? Where do you buy cleats? This is a basketball town – where do you buy a basketball to play basketball with?

“There are (local) options – but we know that we are driving outside of market for some stuff that we could be finding locally. Food and beverage stores, health care, clothing, electronics, furniture, gasoline…we have room to grow on the retail side in all of those areas.”

And while Orange County’s retail gap is growing, every other surrounding county’s gaps are shrinking – or even turning into surpluses, where local businesses sell more than local residents buy. Johnston County had a $60 million retail gap in 2012; by 2014 that had turned into a nearly $200 million surplus. Alamance County already had a $153 million surplus in 2012 – and that number more than doubled in the last two years. Durham County had a $375 million gap in 2012; it’s now a $105 million surplus. Chatham County still has a $134 million gap, but that’s half of what it was in 2012 – and even in 2012, Chatham’s gap was far smaller than Orange’s.

“Our gap grew, so we’re the opposite of the rest of them,” Nelson says. “That’s a challenge – particularly if we’re expecting great government services, (or) if we expect to grow jobs or fund our schools.”

Nelson says those numbers serve as a reminder that – while Orange County has made quite a few strides toward improving local retail – there’s still a long way to go.


Sales Tax Revenue Up In OC – But Why?

Orange County is one of the richest counties in North Carolina in terms of per capita income, but we perennially rank near the bottom when it comes to retail sales and sales tax revenue.

But there are some indications that this may be starting to change: “Our taxable sales are now $1.47 billion,” said Aaron Nelson, president of the Chapel Hill-Carrboro Chamber of Commerce, during his annual “State of the Community” report Thursday at the Friday Center.

View the full report here.

According to numbers from the state Department of Revenue, taxable sales in Orange County topped a billion dollars for the first time in fiscal year 2011 and have risen steadily since – topping $1.4 billion in fiscal year 2014 and reaching nearly $1.5 billion in the last fiscal year. That led to a spike in sales tax revenue – breaking $70 million in the last fiscal year for the first time ever, up from just over $50 million three years ago.

That’s a big shift. In 2012, despite being no. 2 in the state in per capita income, Orange County ranked 81st in per capita sales tax revenue. But in 2013, just a year later, Orange County ranked 42nd – moving past Wake, Alamance, and Chatham in the process.

“So around our office there were double-high fives, there was chest bumping – it was really exciting,” Nelson said.

But he says that number is a bit deceiving – because it’s not all about greater retail sales. “The revenue went up because we added a half-cent tax and a quarter-cent tax,” he said – and those tax increases added to the spike, along with the actual increase in sales. (Together, Orange County collected about $9.2 million from the half-cent and quarter-cent taxes in fiscal year 2015 – accounting for a little less than half of the $20 million increase in revenue from fiscal year 2012.)

Still, Nelson says the change is a promising sign that Orange County is making progress on an issue that’s troubled local policymakers and business leaders for many years – even if the issue still remains.

We’ll have many more numbers from Nelson’s State of the Community address on WCHL and Chapelboro.com in the coming days.


Outlook Good: Expert Says U.S. Economy Doing Well Despite Uncertainties

Interest rates are likely to go up, oil prices are likely to increase a bit and then stabilize, and the overall U.S. economy is fairly strong – provided the federal government stops being dysfunctional.

That was the word from Gregory Miller, the chief economist at SunTrust Bank, at the Chapel Hill-Carrboro Chamber of Commerce’s annual Economic Outlook Briefing Thursday morning.

The big concern right now: will the Fed raise interest rates? This month officials dropped the word “patience” in their report, which signals a possible increase around June. Some economists worry that could slow economic growth, but Miller says it’s important to remember that interest rates are historically low right now.

“Rising rates are not the same as high rates,” he says. “We have a long, long way to go to get to high interest rates.”

And he says a hike in interest rates could actually boost the economy in the short term – since it’ll lead investors to borrow money quickly, to avoid higher rates in the future.

Generally speaking, Miller says the overall U.S. economy is doing well – especially relative to the rest of the world. That means a strong dollar, which means lower prices for Americans at the stores.

Miller says the American economy is growing at a rate of about 2.4 percent. Economists say a 3-percent growth rate is needed to keep up with increasing job demands – but Miller says the private sector is actually already doing that well. What’s holding the economy back? He says the federal government is simply failing to pull its weight.

“The government’s started to come back,” he says. “State and local governments are already back – the federal government is the only one that’s (still) moving in the wrong direction.

“We suspect that through this year, the (federal) government should start to make a positive contribution to growth. If they do that, then the whole economy (will be) doing 3 percent – and everybody’s happy.”

Miller delivered his economic outlook briefing to a group of about 200 local business leaders and elected officials Thursday at the Friday Center. It was an optimistic outlook, in general – but he did say the positive trends could be jeopardized by increasing instability.

That could come globally if there is conflict or if other national economies collapse – or it could come domestically, when election season rolls around next year.

“When we are headed toward elections, the markets and the economy tend to turn uncertain,” Miller says.

So expect a possible slowdown next year – but until then, Miller says the overall picture is good.