The debate over how many upscale apartments to build in Chapel Hill boils down to this: One side believes that building an over-supply of pricey rentals will sate demand to the point that rents will drop. The other side understands that such supply-and-demand theory only works in a closed system. In an open system, such as Triangle towns that spill across counties so you can’t tell where one burg ends and the next begins, demand is never sated. And people who live here must pay higher taxes to subsidize apartment complex owners.
Simple supply-and-demand can’t be applied to Chapel Hill. If the solution to having some housing affordable to the average worker was to build more high-priced rentals and hope that other apartment buildings would lower their rents in response, New York, San Francisco and Los Angeles would have some of the cheapest rents around. And so would Chapel Hill. According to U.S. Census data, the number of housing units in Chapel Hill grew 50 percent between 1990 and 2010. Yet even adjusted for inflation, rents rose about 10 percent during that time.
Supply and demand would work in the Iowa town where I grew up. Because cities in Iowa are separated from one another by miles and miles of farmland, each town operates as a closed system. People live in the towns where they work. Ever practical Iowans wouldn’t consider living in Dubuque and commuting 100 miles each way to a job in Cedar Rapids. Developers build enough housing in a variety of prices to meet the demand of the people who work there. If a developer builds too much in one price range, prices drop for that product until a new employer comes to town and attracts workers who can afford those homes.
But in the Triangle, where towns rub shoulders with one another, it is feasible to live in one town and work in another. Why would people choose to live in Chapel Hill if they worked in Durham? Both places are university towns, have top-notch independent restaurants and lively nightlife, and lovely, tree-lined streets.
People choose Chapel Hill because of the stellar reputation of our public schools. That will continue, as long as our schools turn out high-performing students who get accepted into desirable colleges and universities. Paying top-dollar rent becomes a bargain if parents can enroll their children in free public schools that are on par with private schools demanding high tuition.
During the approval process for Ephesus-Fordham, The Edge and Obey Creek, we heard developers say that only childless people rent apartments. The school board refuted that contention and is in the process of recalculating its projections of how many students various neighborhoods likely will add to the school system.
Residential development costs taxpayers money because the amount of tax revenue generated does not cover the cost of additional schools, police protection, fire trucks and crews, trash pickup and bus service. I would be fine with paying higher taxes, if we were making room for people of all income levels who work in town.
But Chapel Hill does not have enough jobs that pay what people would have to earn to be able to afford the upscale rentals proposed for recently approved developments. The people who move in will work out of town, and the high rents will price out modestly paid workers.
An over-supply of high-rent apartments will turn us into a bedroom community for the well-to-do. Absorbing regional growth by cherry-picking well-off commuters and forcing out the modestly paid who work in town feels wrong.
Nancy Oates is a candidate for Chapel Hill Town Council, founder of the Chapel Hill Watch blog and a former CHN columnist.