Civic

What Happens When Hotel Moratorium Ends?

A sampling of new downtown hotels from Okolichany’s presentation.

Asheville

Options for extending Asheville’s referendum on hotels have pretty much run out. To manage new construction, however, city council is considering allowing construction by developers who subsidize its general fund by supporting new governmental functions like building affordable housing, paying reparations, or supporting green and equity initiatives.

Asheville City Council is considering offering hotel developers, in exchange for letting them build, is a $2,000-$4,000 per-room extraction for reparations. The possibility came up as the city’s hotel moratorium is scheduled to expire on February 23. Asheville Mayor Esther Manheimer asked City Attorney Brad Branham to explain to members of the public, many of whom have been petitioning her, how the law forbids further extension.

Branham clarified that land use law differs from state to state and city to city, and the North Carolina General Assembly has determined which uses a local government may lawfully exclude from its jurisdiction. North Carolina has never authorized a prohibition on lodging facilities, and there is nothing in case law to support such a ban. Furthermore, by definition, moratoria are temporary, and the United States Supreme Court has strongly suggested that moratoria extending more than a year can be declared null and void by virtue of their duration. Asheville’s moratorium, in contrast, has been in effect 18 months; so any attempt to further stretch the leniency allowed due to the pandemic would probably not hold up in court.

Next, Planning Director Todd Okolichany explained that, while the city can’t impose an outright ban on hotels, it may manage their construction through incentives. What the staff was suggesting was a point system whereby hoteliers could earn building privileges. A chart prepared by staff, which will likely be revised before council votes on it in two weeks, awarded points for subsidizing the council’s strategic goals of adaptively reusing a historic building, meeting recognized green building standards, being a co-op or B Corp, bankrolling affordable housing, paying living wages, subsidizing mass transportation, supporting Minority/Women-owned Business Enterprises (MWBE), paying reparations, improving the neighborhood, commissioning public art, constructing outdoor open space, or providing structured parking. Penalties would be imposed for demolishing a historic structure or displacing tenants. 

To develop the new ordinances governing hotel construction, the city had contracted with the Urban Land Institute. Public information sessions and opportunities for input had been diverse and replete, following which staff incorporated the input, much of which involved adding to the public benefits table, into a revised proposal.

Councilwoman Gwen Wisler gave an economics-in-one-minute lesson. She said the incentives would raise not only room rates for persons staying at the new hotels, but they would also pressure existing hotels to raise their rates. The phenomenon is easily shown with gas prices. Wisler said the result would brand Asheville as an even more exclusive, higher-end destination and reduce options for a large number of people who come to the area to be with family members seeking medical treatment, as well as her own relatives, “coming to see me.”

During public comment, David Greenson described the action underway as a sham. He pointed out the public benefits table assigned a cost-per-point ratio to reparations so high, he could almost guarantee hoteliers careful about their bottom line would select other menu items. Next, the housing subsidies would support $240,000 homes, which are way “out of reach” for most “black and brown” members of the community. Thirdly, the design review process obsesses over the aesthetics of buildings. If councilors really cared about equity, they would replace that process with an equity review. Lastly, the city really needs to work on making its public processes accessible to minorities.

Public Comment

During general public comment, Rob Thomas ran with the point. Thomas works with the Racial Justice Coalition, a consortium of the YWCA, the ACLU of Western North Carolina, the Asheville-Buncombe Branch of the NAACP, the Asheville City Schools Foundation, Democracy NC, and several other groups with legal teams. Thomas said it took “us” hours just to crawl through the documents posted online with the agenda to find the “smoking gun.” He added that the documents are posted only four days before the meetings, so people need high-speed internet and a lot of discretionary time if they want to learn enough to speak intelligently about the issues. 

Others commenting, including some on the council, didn’t think the proposed extra costs to hotel developers went far enough. Requests were made for things like more restrictions on Airbnbs and a reduction of the area in which hotels would be allowed. Greenleaf Clarke told the council they should just seize the hotels, which, among other things, are founded in colonization and oppress their employees, and give them to the homeless. More conservatively, Max Mandler suggested only 80% of rooms be availed to the homeless. Councilor Sage Turner suggested incentivizing hotels to be easily converted into permanent housing. She asked the question normally determined by price theory, “How much is too much tourism?”

Manheimer explained the current hotel proliferation began with the market distortion of the quasigovernmental Buncombe County Tourism Development Authority (TDA). It had been created back when it made sense to incentivize tourism. Now that that era has come and gone, it is only reasonable to attack the problem at the root. Thickening the plot, unlike other TDAs, Buncombe’s collections do not go to the city or county’s general funds. Instead, the TDA receives all funding, and it is required to spend 75% of it on tourism marketing and grant the rest for capital projects designed to attract tourists. Manheimer said former Asheville City Councilor Julie Mayfield was now a member of the local delegation. Well-versed in the city’s point of view, Mayfield will be helping with lobbying for a more relevant TDA.

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