CHAPEL HILL- The Chapel Hill Town Council voted Monday to move ahead with a plan to build affordable rental housing on town-owned land.

Town Council members say a project that will use low-income tax credits to build 170 affordable rentals on town property is a chance for Chapel Hill to help those being priced out of workforce housing.

“What I believe this is, is an investment in the character of Chapel Hill,” said Mayor Pro Tem Ed Harrison. “What it gives us is a step forward in diversity of housing that we really are at a loss to make otherwise.”

The council voted 7-1 last night to sell 8.5 acres of land next to the Chapel Hill Memorial Cemetery to DHIC, Inc, a Raleigh-based developer specializing in affordable rentals.

DHIC President Gregg Warren said he’s been unable to build in Chapel Hill due in part to high land costs. To make the project feasible, the council agreed to sell the land for $100, despite the assessed value of $2 million. In return, DHIC will apply for state tax credits to subsidize housing for those making a range of incomes, including seniors, low-wage workers, the disabled and those transitioning from homelessness.

However not everyone was pleased with the deal.

Council member Matt Czajkowski said he couldn’t support a plan that gave away $2 million dollars worth of town assets outside of the annual budget process, especially as the town is looking to fund the Rogers Road sewer project later this spring.

“We have multiple other looming financial demands,” said Czajkowski. “Paramount among those demands is funding Rogers Road. In my view, and I guess the mayor and I disagree on this, this is what priority budgeting is all about.”

But Council member Sally Greene, who co-chaired the Mayor’s Committee on Affordable Rental Housing, urged her peers to take advantage of this new opportunity.

“There is really a high public purpose in this, and yes, it is nothing we’ve ever done before, but as we know we’re in a different climate than we were ten years ago, and we need to be thinking creatively,” said Greene. “We need to explore and if possible execute plans like this when they come available for us.”

The council was under a deadline to sign a letter of intent to commit to the project to allow DHIC to proceed with the application process for state tax credits. Warren said the process is competitive, as only one in four proposals is approved.

Mayor Mark Kleinschmidt reminded the council and audience that Monday’s vote is only the first step.

“This vote didn’t create that project- it just allows it to move forward,” said Kleinschmidt. “And we’ll all be anxious to see next August this application be approved, we hope.”

The council will review the project again next spring, as the land will need to be rezoned before May ahead of the project application deadline.

The council also voted 7-1 last night to allocate an additional $860,000 to renovate two-thirds of Town Hall.

The first floor was damaged during this summer’s flooding, but instead of rebuilding just the lower level, Town Manager Roger Stancil recommended reorganizing much of the building to help streamline the permitting process.

“It would be physical evidence of the kind of change that you have asked for in development review and customer focus over the last few years,” Stancil told the council.

Matt Czajkowski cast the lone vote against the project.

In addition, the council unanimously approved a plan to partner with Orange County for recycling pick-up services. The county has been forced by a recent court ruling to change its funding model for the program, leading some in Chapel Hill to consider separating the municipal and county programs.

However, council members said they’d be willing to continue the partnership provided town staffers have a greater role to play in the administration and oversight of the program. The town and county managers will hash out an agreement later this spring.

On Tuesday the council will meet again to consider adoption of the Central West small area plan detailing potential growth around the Martin Luther King Jr., and Estes Drive intersection.

The Central West planning process has drawn fire from some residents of the area, who say citizen input has not been adequately incorporated into the current plan.

Residents opposed to the committee’s plan are likely to present a lower-density plan they say will reduce traffic and preserve surrounding neighborhoods.

The council meets Tuesday at 6 o’clock at the Southern Human Service Center on Homestead Road.

You can read the full agenda here: