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• What’s the deal with modular construction?

  

  AC Hotel Chapel Hill Downtown

  In May of this year, Marriott International announced that it would ramp up the use of modular construction in its hotels. Marriott said they anticipated signing on at least 50 hotels in 2017 alone that would be primarily modular, citing that this type of construction would enable them to generate returns for their partners faster, decrease waste, and employ a steady and reliable skilled labor force. In fact, one of these 50 properties is in Chapel Hill; the new AC Hotel Chapel Hill Downtown. The four-story above-ground structure (with two levels of parking beneath) will boast 123 guest rooms, all built using modular construction. Read more »

• Legal and Business Reasons Why Downtown Development Programs Should Involve Secured Loans—Not Grants

  Dr. Blaine Beeper is a retired hospital administrator who was recently elected to council in the Town of Bushwood. Dr. Beeper thinks he has figured out how to jumpstart revitalization of Bushwood’s historic downtown. He proposes for the Town to offer annual cash grants to any owner who redevelops a commercial property within the downtown. Dr. Beeper reasons that redeveloped properties will carry a higher tax assessed value, and the additional tax revenue can be “granted back” to the owners in the form of cash grants for five years, calculated as some percentage of the additional property taxes received by the Town.  When Dr. Beeper floats this idea, he runs into resistance from the Town Attorney and the Economic Development Director, each for different reasons. The Town Attorney raises serious concerns about the legality of such a program, while the Economic Development Director says it doesn’t make good business sense and a loan program would better address owners’ financing needs. This post explains the legal and business reasons why Dr. Beeper’s proposed grant program should be scrapped in favor of a loan program. Read more »

• Federal Housing Finance Options for Mixed-Use Development

  Federal housing finance policies and programs exist to provide financing for the acquisition and construction of homes and boost investment in the housing industry. While a variety of housing loan products exist, a report released by the Regional Plan Association (RPA) in February 2016 highlighted the unintended consequences of housing finance policies at that time. One of the consequences highlighted was the structure of federal loan programs that did not support mixed-use, multi-family developments, effectively limiting the access of these properties to financing options. In areas where two and three story buildings with the potential to support residential spaces above commercial storefronts exist, this type of access could be crucial to revitalization and diversification of neighborhoods. Read more »

• Property-Assessed Clean Energy (PACE) Programs in North Carolina: Part II

  There are several ways for state and local leaders to promote investments in their communities and reduce utility costs for residents. One tool that has been often overlooked in North Carolina are Property-Assessed Clean Energy (PACE) programs. This post examines the benefits and drawbacks of commercial and residential PACE programs. A previous blog post outlined the PACE program in general and its history in North Carolina.

  All PACE assessments follow the general structure outlined in the first blog post on this issue. This framework allows property owners to install energy efficiency (EE) or renewable energy (RE) upgrades with little or no up-front costs. Read more »

• Property Buy-Outs: A Good Option for Local Governments and Homeowners?

  The devastating impact of flooding is once more in the public spotlight following the unprecedented rainfall from Hurricane Harvey in Texas. Nearer to home, residents in Princeville, Fair Bluff, Seven Springs, Windsor, Kinston and Lumberton NC are planning how to build stronger and safer after Hurricane Matthew last October. These two major events are only the latest in a long string of natural disasters that have wreaked havoc in our communities in recent years. Giving greater attention to finding ways of reducing the toll in lives and property has become more urgent. One significant effort is through the Federal Emergency Management Agency’s (FEMA) Hazard Mitigation Grant Program (HMGP). This program helps communities implement mitigation measures and supports cost-effective post-disaster initiatives that eliminate or reduce long-term risks, and in so doing reduces reliance on Federal funding in future disasters. These efforts can include preparing hazard mitigation plans, elevating homes above potential flood levels, and structural retrofitting of homes to make them more resistant to floods, earthquakes and wind. One measure promoted in the program is funding to help communities purchase and demolish flood-prone property. Between 1993 and 2011, FEMA spent over $2 billion on acquiring some 20,000 homes (1), but in spite of its popularity, little research has been done on what happens to the land and the people after the buy-out process.

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• What @sog_ced is reading online: August 2017

  The following are articles and reports on the web that the Community and Economic Development Program at the UNC School of Government shared through social media over the past month. Follow us on twitter or facebook to receive regular updates.

  Items of interest related to CED in North Carolina:

  Report attempts to quantify economic impact of military force reductions at Fort Bragg in Fayetteville, North Carolina. http://bit.ly/2fEkKiw 

  Automotive News on the four auto plant mega sites available in North Carolina. http://bit.ly/2vZJitg

  Review of history of state investments in Global Transpark near Kinston, North Carolina: http://bit.ly/2xbPcEU

  Post describes different streams of revenue (to landowners, local government) from wind turbine project in northeast North Carolina. http://bit.ly/2itfHSZ 

  Design team shows how to add 52 acres to historic Princeville, North Carolina, outside of flood zone. http://bit.ly/2xwGHV9

  Other CED items:

  Affordable housing developer’s perspective on the challenges of serving extremely low income households in rural areas. http://bit.ly/2vLMB6Z

  Report on suburban office parks, like the Research Triangle Park, reimagined as mixed-use environments by adding residential and retail. http://bit.ly/2vvD2Zl

  Interesting series of community development infographics created by the Federal Reserve Bank for use by practitioners: http://bit.ly/2vidRqS 

  New study on the clustering of craft breweries in post-industrial neighborhoods: http://bit.ly/2uJe5KD Read more »

• The Missing Middle: An Affordable Housing Solution?

  Throughout the United States, the cost of housing is rising faster than incomes. While there are many discussions taking place around this issue, an important one is how the types of housing being developed can have an impact on affordability, particularly in areas where demand is high – namely, walkable places with transit service.

  According to proponents, the “Missing Middle” is part of the solution to meeting the demand for housing that is affordable. Missing Middle housing is composed of a range of multi-unit or clustered housing types that are compatible in scale to single-family homes. Read more »

• The Grasshoppers’ Stadium is a Homerun for Downtown Greensboro

  When the Greensboro Grasshoppers threw out their first pitch at their new stadium on April 3, 2005, it was still uncertain what the impact of the stadium would be on the greater downtown.  The Joseph M. Bryan Foundation of Greater Greensboro took a leap of faith in building the $22.5 million stadium in hopes of spurring economic growth in a part of downtown that had been stagnant for decades.  The Foundation decided to fund the stadium’s construction after a bond referendum did not look promising and other partnerships for the project fell through.  Read more »

• System Development Fees are the New Impact Fees

  As detailed here, in 2016, the North Carolina Supreme Court held that municipalities (and by analogy counties) lack the statutory authority to impose certain upfront charges for water and sewer services. Upfront charges are charges imposed on new or existing development before a property parcel is actually connected (or under contract to connect) to a local government’s water or sewer system. Local government utilities across the state impose a wide variety of upfront charges, some that are assessed only on developers as a condition of securing development approvals, and others that are imposed on both new and existing property owners. The purposes of these fees range from reimbursing the utility for past investments, to reserving capacity, to covering the costs of extending infrastructure, to establishing a reserve for future maintenance or expansion of the system. In Quality Built Homes Inc. v. Town of Carthage, No. 315PA15, ___ N.C. ____ (Aug. 19, 2016), the supreme court invalidated certain types of upfront charges. Questions remained, however, as to whether government utilities have authority to impose other types of upfront charges pursuant to their general rate-making authority. As detailed in this post, local government utilities were left to make difficult decisions about who to charge, when to charge, and how to calculate the amount of the charge.

  A new law, the Public Water and Sewer System Development Fee Act, S.L. 2017-138, clarifies a local government utility’s authority to assess upfront charges for water and sewer. The new law grants local government utilities specific authority to assess one type of upfront charge—a system development fee—albeit with significant limitations. It also preserves the authority of local government utilities to impose certain other upfront fees. At the same time, however, it prohibits local government utilities from assessing many of the types of fees that have become routine in recent years. Local government utility providers will need to act soon to bring their fee schedules into compliance.

  This post sets out the basic contours of the new law. It discusses who must comply, who can be assessed and when, what the processes are for calculating and adopting the fee schedule, and how a local unit must administer the fee proceeds. It also lists the other types of allowable water and sewer charges. Finally, it identifies a few drafting quirks that may cause some implementation issues. The Generally Assembly has specified that the new law’s provisions be narrowly construed by the courts. To that end, local officials should carefully follow the statutory requirements and proceed cautiously when interpreting any statutory ambiguities. (Future posts will flesh out the details for the calculation requirements and deal with potential liability issues for past fees that were assessed unlawfully.) Read more »

• The Electric Grid of the Future

  The energy landscape is changing. More and more, renewable energy plays a larger role on how we generate and consume power. Fundamental differences between traditional power generation technology and renewable sources requires an overhaul of the entire energy industry, from infrastructure to business models, creating the electric grid of the future. Three of the biggest differences, which this blog post will explore, are: variability, decentralization, and digitalization. Read more »