Agenda - 02-16-2021; 12-4 - Memorandum - Options for Increasing Affordable Housing in Orange County Through the Unified Development Ordinance

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2 Report on Affordable Housing Incentives February 20211 Zoning and land development incentives for affordable housing are necessarily tied to financial costs. These incentives often aim to lower the transactional costs by allowing greater density or flexibility to make the process quicker, more certain or cheaper. Staff from the Orange County Housing & Community development reached out to several developers (both non-profit and for-profit)to have them identify regulatory,financing and other barriers. Developers responded that it was a long, slow and expensive review process. The regulation of development inherently contributes to transactional costs and dampens the market's full potential to provide low cost housing. To incentivize guaranteed affordable housing(i.e. protected by covenants)local governments have some limited options such as fast track permitting. The more powerful incentives,such as density bonuses, require special legislation from the NC General Assembly. In 1991 the County received such special local authority (codified in UDO 6.18) but this incentive has never been utilized by a developer. The general belief is that developers, both for-profit and non-profit, have largely written-off Orange County as too difficult to work in. Aside from land costs, the development process was seen as unwelcoming due to a lengthy process with uncertain results. There are reasons warranting that feeling as the UDO itself is lengthy, dense and confusing. For instance, there are expedited, exempt, minor and major subdivision classifications with major subdivisions being further broken down into five subcategories with three different permitting processes. All of those distinctions have true differences, but perhaps for little purpose as there were 100 subdivisions in the last five years yet only four subdivided into more than five lots. Subdivisions which require approval by the governing board involve a long process with uncertain outcomes. In contrast, all subdivisions in Alamance County are handled administratively. Compounding the problem of an anti-development perception were outdated plans. The Comprehensive Plan was adopted in 2008 using,for example, housing price data from 1970-2000. While a '30 year plan,' the document itself called to be reviewed annually and then an update by 2015. There have been periodic amendments to the plan necessitated by rezonings and text amendments to the UDO, but no review in its entirety. Likewise, there are new demographics and notes from advisory boards, although these are not adopted by the governing board as a formal update to the plan. The amount of attention to the plan and resulting development may have reinforced the perception that the County was not interested in attracting development. A new comprehensive plan would likely be a prelude to a wholesale replacement to the UDO to drastically reduce the over 700 pages and create clear pathways to desired results. In the past two decades there have been considerable shifts in planning regulations allowing much greater legislative tools to replace cumbersome quasi judicial hearings. The General Assembly has provided for 1 This report was drafted by and reflects the opinions of James Bryan,Staff Attorney with recognition of tremendous contributions and assistance from the Housing&Community Development Department(Emila Sutton, Erika Brandt, Maria Dewees)and Planning& Inspections Department(Craig Benedict,Ashley Moncado,and Molly Boyle).