Wake County

Raleigh council debates affordable housing for city’s downtown land

The site of the Flying Saucer Draught Emporium bar and restaurant in downtown Raleigh is up for redevelopment.
The site of the Flying Saucer Draught Emporium bar and restaurant in downtown Raleigh is up for redevelopment. Raleigh

A valuable lot in Raleigh’s downtown has become a focus of the city’s debate about affordable housing.

The city government owns most of the parking lots at 301 Hillsborough St., which share a block with the Flying Saucer restaurant and a law firm. Now Raleigh is preparing to sell its land, and developers are salivating over the chance to build a 20-story tower.

However, some Raleigh City Council members warn that the government may pass up a rare chance to create more-affordable downtown homes. They suggest that the city could require the land’s buyer to set aside units for people who make less money.

“For a long time, we’ve talked about how city-owned parcels are an opportunity to do partnerships, and to look at innovative ways to work with the private sector to achieve their goals and to achieve Raleigh’s community benefits,” Councilman Russ Stephenson said.

Stephenson doesn’t see that happening so far with the land between Hillsborough, Dawson and Morgan streets. The city’s on track to sell its 1.2 acres to the highest bidder, though it hasn’t decided whether to actually do so.

As a preliminary step, the council on Tuesday voted to grant new development permissions preemptively for the entire block. That discussion brought to a head the city’s ongoing discussion about affordable housing, spurred by rising land values and rents that are forcing some people from Raleigh’s center.

“If it’s going to be housing, I would like to work toward having a public benefit,” said Councilwoman Kay Crowder.

She and Stephenson voted against the rezoning proposals, which were submitted by the city and private landowners on the block, including the owners of the law firm and the Flying Saucer.

Residential neighbors of the land also protested, saying the proposed height limit was too high.

Paving the way

The change, which was approved, will make it easier for the eventual buyer to develop the land, making the lot more attractive. But by approving the new zoning without seeing an actual development plan, the two council members argued, the council was giving up some of its power to shape the block’s future.

Other council members acknowledged affordability concerns, but were hesitant to slow the process.

“We don’t have a vision, we don’t have a policy, we don’t have a plan, we don’t have a direction,” said Councilman Wayne Maiorano, referring to the city’s efforts to encourage income diversity in downtown.

“I just would not want to see us try to focus in right now, prematurely, on one particular piece of property when we really haven’t done the kind of assessment we would need to be effective.”

City staffers already are working on a new affordable-housing policy, but it’s not expected to arrive until July.

“I think just pulling this out of the hat at this time, it doesn’t sound very strategic to me,” said Councilwoman Mary-Ann Baldwin.

Councilman John Odom suggested there was no harm in waiting. Baldwin responded that an affordable-housing requirement would bite into the sale price of the land, now valued at about $3 million, potentially costing taxpayers.

“Are we willing to pay for it in a different way?” Odom asked.

Mayor Nancy McFarlane suggested that revenue from the sale might be put toward affordability programs, as the city plans to do in the Stone’s Warehouse sale.

Another way?

Even with Tuesday night’s approvals, the city council will have another chance to decide what kind of development happens at 301 Hillsborough.

The city council now must decide how it will sell the property. The city could set conditions on that sale, such as requiring affordable housing units.

State law generally allows cities to sell land for the purpose of affordable-housing construction, but city staff have warned that North Carolina’s laws are comparatively restrictive in some cases.

The discussion will continue in the city’s Budget and Economic Development Committee.

Meanwhile, Stephenson warns that the city council may soon give up influence across a broader area. The city is preparing to institute a rezoning across nearly all of its area, bringing all lots under its new set of zoning codes.

When that happens, Stephenson said, many downtown property owners will have the right to build to certain heights, up to 40 floors in some cases. With council making fewer decisions about those heights, he said, Raleigh’s governing board will have fewer chances to negotiate with developers for causes such as affordable housing.

Kenney: 919-829-4870;

Twitter: @KenneyNC