Agenda - 08-24-2009-C2 - Laserfiche WebLink

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STRATEGIC GROWTH AND RESOURCE CONSERVATION PROGRAM Final (8.7,2009) Submittal to Orange County Planning Staff. The final SGRC recommendations as presented in this report were submitted to the Orange County Planning Staff in March, 2008. 2.2.2 Economic Analysis A successful SGRC Program needs to "balance" potential sending area credits and receiving area credits in order to ensure that the amount that a developer is willing to pay for a receiving area credit is comparable to the amount that a sending area land owner would be willing to accept for his development rights. Moreover, the density bonus achieved by using SGRC credits must make economic sense to developers, or they simply won't participate in the program. This section will address directly the assumption made previously that a density bonus in Orange County will be beneficial to a developer and will quantify the willingness of developers to pay for additional units of density. This analysis forms the basis of a later section focusing on achieving the balance of credits. Characteristics of Recent Residential Development in Orange County. In determining how much developers may be willing to pay for density bonuses under the SGRC Program, we first needed to characterize recent development trends in terms of location, density and value. Understanding trends in recent development will assist in predicting how the housing market in Orange County will affect SGRC transactions by focusing on only the most relevant, recent transactions. "Recent development" is defined as parcels within Orange County (excluding municipalities and municipal extra- territorial jurisdiction (ETJ)) that have been built upon from January, 2004 through February, 2007. This analysis focuses on residential development because data are not readily available for the few commercial transactions that exist. Location. Of the 916 parcels recently developed in unincorporated Orange County, about half are located in "near- urban" areas. Near -urban areas were defined as those within two miles of a municipal or ETJ boundary, as illustrated in Figure 2 -1. The fact that the recently developed parcels are split between the two areas, even though the near - urban area is less than one third the size of the rural area, simply confirms that development in the proximity of urban areas is more attractive to developers and home buyers. Existing demand for housing in the near -urban areas is critical to the success of the SGRC Program. The distinction between near -urban and rural areas is important because the housing markets in near -urban and rural areas are quite different - the type and density of housing built, the price of land, and even the demographics of those who live in the different areas. In addition, using near -urban and rural areas in analyzing housing trends is a helpful proxy for receiving and sending areas, respectively. ORANGE COUNTY, NORTH CAROLINA