High Prices, Love the Housing - TribPapers

High Prices, Love the Housing

The map shows the four “spot zoned” parcels whose owners will now have to build affordable housing should they wish to invest in substantial upgrades.

Asheville – After Asheville City Council approved its Urban Place Form Code District, it set about imposing the zoning on four tracts. Affected were properties on Tunnel Road (Innsbruck Mall), Bleachery Boulevard (Walmart and Kohl’s), Merrimon Avenue (Ingles and its subsidiary Sav-Mor) and South Tunnel Road (Sears at the Asheville Mall).

Business and community

Representing Ingles, Wyatt Stevens told how businesses on Merrimon Avenue have served the community for 50 years. He and civil engineer Jeffrey Brown spoke of the hilly terrain with runoff issues, which not too long ago resulted in sinkholes. Relocating buildings, which would include moving utilities and retaining walls, would be neither advisable nor affordable.

Wyatt said the ordinance would impose an unlawful, unfunded mandate, requiring just a few commercial retailers to build housing for the city, and that would introduce costs that would have to be recovered by, for example, raising the prices on groceries. This rezoning, which was initiated by the city with prompting from neither the owners nor neighbors, risked legal challenge as it was introducing hardship for future prospects of modernization.

Craig Justus, also representing Ingles, said to his knowledge, this was the first time in Asheville’s history, and possibly the first time in the state, that zoning would be used to mandate a ratio of property uses. He asked council to consider the letter sent them, including three affidavits from subject-matter experts, describing the ordinance’s legal, social, pragmatic, and political defects. The parties affected built in Asheville 50 years ago, according to all the city’s rules. Now, the city is telegraphing, “What we thought was smart growth for over 50 years is apparently not smart enough, so, moving forward, you must accommodate this new vision,” with which Justus said it would cost Ingles millions of dollars to comply.

Clyde Holt, representing American Finance Trust, the owner of the Riverbend Marketplace where Walmart and Kohl’s are the anchor tenants, explained how, by law, the publicly-owned entity had to meet fiduciary requirements, like maintaining and upgrading the properties in which investors had risked tens of millions of dollars. In not so many words, he indicated urban planners act as if they need only pronounce a “Let there be …” for it to be so. Dried ink on a page does not take into consideration market trends, topography, and the absurdity of lobbying regulators to allow banks to finance building at a loss. 

Well-financed chains

Karen Ramshaw added NIMBYism with powerful single-family lobbies to the list. The variances or conditional zonings suggested for a redress of grievances come at an exorbitant cost in time and money. Ramshaw said this ordinance would raise costs so high, the only people able to buy the parcels when the owners default, as surely they will, will be well-financed chains.

Holt said he didn’t see how the rezoning, which would mandate housing in commercial centers, would not represent an exaction, which by law requires a rational nexus. The Supreme Court has interpreted the Fifth Amendment of the US Constitution to require government when it imposes exactions (or takings, so-called because they reduce property values) to compensate the property owner. Holt, perhaps sarcastically, indicated lawyers thus far had been unable to locate enabling legislation for these takings.

Holt concluded, saying lifestyle centers were a positive step, but they were not feasible everywhere. In addition, the government, that body the Founders created to protect property rights, should only offer incentives, and not force people to surrender property value for the aspirations of a particular city council.

John Spake suggested that if the code amendments were so great, add them to the toolbox for developers to choose for themselves. Even better, the city should respect landowners’ rights to choose how they wish to use their property instead of forcing an “unproven new code” on them. Spake then explained that only three properties on Merrimon Avenue and Tunnel Road would be forced to provide affordable housing, and they are all owned by Ingles. This, he said, was not equitable. Ordinances are supposed to address injustices, not target individuals.

Spake added a lot of people want to build housing in Asheville, but the city’s demanding development codes and design review process price developers out of the market. Reasons might include the usual codified add-ons that increase costs of construction like sidewalk and setback requirements; height and density restrictions; and guidelines for fenestration, siding, and signage. Making things harder is the city’s new push to require developers to provide community benefits and offer a percentage of units at below-market rates. 

Martin Fridy added a lot of smaller properties along Merrimon Avenue are deed-restricted in various ways that would not allow the owners to comply with council’s demands for affordable housing. It was, therefore, easy to foresee how the Urban Place zoning would, in fact, have a negative impact on commercial development.

John Palmer told council that investors who risk as much money on large developments as those targeted by the new ordinance are banking on a return. If it is too expensive to build in Asheville, developers will take their projects elsewhere. Palmer asked if council had considered what this ordinance was going to do to property values, particularly if land lays undeveloped due to financial and legal hurdles. The ordinance, he said, would not only make the creation of affordable housing more infeasible, it would also disincentivize investment, discourage real estate sales and redevelopment, and jeopardize future operations of longstanding businesses.

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