Asheville – Asheville City Council approved an application from David Moritz for a Land Use Incentive Grant (LUIG) for the construction of micro-apartments. This was in opposition to staff’s recommendation that they delay approval until regulatory guidelines could be researched and enacted for the tiny residences. City council had, in fact, voted in support of staff’s wishes on June 27, while acknowledging that Moritz had another micro-apartment project already in the development review pipeline. Since trying to impose ex post facto regulations could easily expose council to lawsuits, council was allowed to retain the power to approve incentives for this project at Tuesday’s meeting.
Last month, staff reviewed problems anticipated by vetting committees. Some worries pertained to whether or not housing vouchers would be accepted, and staff learned they would. Another apprehension concerned the appropriateness of affordable housing incentives for units that were naturally affordable. That is, micro-apartments are very small and therefore could subject tenants to stigma they would not endure in full-size apartments with all the modern amenities. Many were of the opinion that the LUIG grants were designed to subsidize rents for the latter.
Moritz’ project that was allowed to move forward was planned for 46 Aston Street. Moritz intended to construct 231 micro-apartments, 20% of which would be rent-controlled to be affordable to households earning no more than 80% of Area Median Income. The footprint of each unit would be between 200 and 350 square feet, compared to the typical 400 square feet of a studio apartment. The Aston Street project scored 105 points in the LUIG matrix for including design elements members of city council want to see in affordable housing, like green building, locational efficiency, and reliance on subsidy. With council’s approval, then, the LUIG would waive $93,007 in taxes per year for the next 21 years.
The city’s Affordable Housing Advisory Committee (AHAC) recommended that any consideration of LUIG subsidies for micro-apartments be contingent on the applicant offering 50% of the units only to voucher holders. Research yet to be undertaken will address their other concerns, several of which pertain to whether or not the market will support this kind of housing, and these are determinations that council members clearly considered to be properly assigned to government. It is important to note that the developer had already received a LUIG grant for a smaller micro-apartment development last year. That project has not yet gotten off the ground due to rising construction costs.
Councilwoman Sage Turner estimated council had spent $1 million on various studies to “figure out” the housing crisis. In answer to questions about whether or not there was a market for micro-apartments, she said she believed every study found the city’s greatest need was more studio and one-bedroom apartments. She recalled council was “intentional about getting the studies,” and they took the results to developers and asked what was standing in their way of building these units. The answers were always that the design review process was too difficult, too many delays kept cropping up, and the city kept moving the goalpost. Turner said she wanted to respect AHAC’s recommendations, but she also wanted to respect the findings of the studies.
Councilwoman Maggie Ullman reiterated her position that it was the role of government to provide stimulus to creative entrepreneurial risk-taking in the private sector. Mayor Esther Manheimer and Vice Mayor Sandra Kilgore, as well as the developer himself, all said they had young adult children who had expressed interest in living in these small, affordable apartments with shared community space. Roney said this project checked all the boxes for affordable housing that the community seeks. These included locational efficiency, voluntary inclusionary zoning, rent control, and cooperative spaces for shared living.
Manheimer added that councils tend to wax political or academic while overlooking the reality that assembling capital stacks for affordable housing projects is very difficult. Moritz had just spoken about how, as soon as he got lender approval, prices soared out of reach again. The moral of the story was that the longer council kicked the can down the road in search of the perfect project, the longer citizens would remain rent-burdened or homeless.
A motion to support staff’s recommendation to postpone consideration failed, with only Councilwomen Antanette Mosley, Kim Roney, and Sheneika Smith in favor. After that, council voted to amend the evening’s agenda to add consideration of the LUIG, and this was supported by all but Mosley. Then, final approval of the LUIG award was approved on a 5-2 vote, with Mosley and Smith opposed.