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 [more…]

The Tortoise, the Hare, and Demolition in Historic Districts

A few blocks from downtown in the town’s historic district sit two houses built [more…]

Conveyance of Local Government Property for Affordable Housing

A developer of affordable housing for low and moderate income persons has approached the [more…]

Notice and Hearing Requirements for Economic Development Appropriations

As discussed in a prior post, Session Law 2015-277 requires North Carolina local governments [more…]

The Community and Economic Development program at the School of Government provides public officials with training, research, and assistance that support local efforts to create jobs and wealth, expand the tax base, and maintain vibrant communities. We deploy the resources of the University to support the development goals of communities in North Carolina.

Recent Blog Posts |

  • 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 »

  • One Neighborhood at a Time: The Incremental Development Alliance

    In the Town of Riverdale, Betty Cooper is taking a walk through her neighborhood. She notices the dilapidated structures and blight that plague the area, and thinks to herself, “someone should do something about this.” Is Betty just a disgruntled citizen…or a developer in the making?

    The Incremental Development Alliance (IDA) is a not-for-profit alliance of real estate development practitioners, private sector partners, and grassroots groups who train citizens like Betty to become small developers, helping to support neighborhood revitalization and assist city champions with coordinating development across the country. IDA began in 2015 as a collaboration between small developers John Anderson and Monte Anderson (no relation), who believe that small-scale, incremental development is a key approach to economic development. Read more »

  • What @sog_ced is reading online: July 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:

    Examining population decline in North Carolina’s municipalities: http://unc.live/2uRjBrb. Some small towns in NC and elsewhere are growing. This article examines why: http://bit.ly/2weuPp2 (Proximity to growing metro helps.)

    Dan River health equity report examines health issues in Caswell County, North Carolina. http://bit.ly/2utlHjg 

    Article in Triangle Biz Journal on the UNC School of Government Development Finance Initiative’s work with local governments across North Carolina: “Meet the Town Whisperers” (subscribers only). http://bit.ly/2tXqr16

    Map of North Carolina local food infrastructure, including value added processing, cold storage, incubator farms and more. http://arcg.is/1zyWXv 

    Other CED items:

    The Atlantic asks: if declining rural towns “deserve to die,” where should their residents go? http://theatln.tc/2su9zOH 

    Poverty in rural areas is three times that in urban areas, prompting a look at creative approaches to “rural renewal”: http://bit.ly/2udMpIA

    Is using 30% of income on housing the right affordability measure? Harvard housing researchers examine, compare options. http://bit.ly/2f279RD

    Opinion piece argues that demand side (Section 8) better than supply side (LIHTC or Low Income Housing Tax Credit) affordable housing approach. http://bit.ly/2tPMkvh  Read more »

  • Legislative Changes Affecting the Tools in the North Carolina Water Finance Toolbox

    Water and wastewater utilities have a wide range of capital project needs. Most utilities have existing assets (treatment plants, water storage tanks, underground lines) that have reached the end of their functional life and need significant rehabilitation and replacement investment. Some utilities also have capital investment needs that are driven more by customer growth. These types of growth projects may include a new water line and storage tank to reach a new industrial park or a wastewater treatment plant expansion that provides capacity to a new residential sub-division.

    Figuring out how to pay for the costs of water and wastewater capital in general is hard, but paying for the cost of growth related projects carries its own set of unique challenges. Existing customers are often wary of paying for projects to serve newcomers, particularly when their existing system has so many capital needs. In the past, water and wastewater utilities have used a variety of upfront fees to generate revenue that to offset the costs of serving new customers. Many utilities believed authority for these different fees was far reaching and granted in Read more »

  • 4% LIHTC Use in North Carolina’s Triangle Region

    A Brief Introduction to the 4% Low-Income Housing Tax Credit

    Development of low-income housing in the United States continues to be a challenge for local governments, affordable housing developers, and policy advocates. Institutional, market, and financing obstacles are all barriers to increasing the supply of affordable housing. Since the passage of the Tax Reform Act of 1986, Low-Income Housing Tax Credits (LIHTC) have helped finance 2.6 million low-cost housing units. The LIHTC program seeks to address the financial barriers by incentivizing private investment in the affordable housing market. Despite lower vacancy and debt service common in affordable housing deals, lower rents often result in a project that are not feasible for private developers, resulting in a funding gap. Developers of low-income housing units, therefore, must gain access to various sources of gap financing such as low-income housing tax credits.

    The LIHTC program offers two tax credits types: the 4% and the 9%. The 9% credits, limited by federal law and distributed on a per capita basis to states, amount to a larger benefit for the tax credit developer, usually accounting for 70% of total project costs. However, use of the 9% credits prohibit the developer from using additional federal subsidy programs and a competitive application process allocates limited credits to a few successful bids. The 4% credits, on the other hand, leave open the opportunity for developers to take advantage of additional federal subsidies and are accessible through a noncompetitive application, but cover a smaller portion of the total project costs (usually nearing 30%). The additional funding sources eligible for 4% LIHTC projects help to close this larger funding gap. Read more »

  • How Should We Measure Community and Household Economic Conditions?

    One of the fundamental measures for CED officials to track is a community’s economic condition. This issue of measuring economic condition, whether for an entire community or a single household, has taken on a central role in policy discussions recently, ranging from an emphasis on income inequality in academic research, to social movements, to political discussions on reforming anti-poverty social safety net programs such as Medicaid and the Supplemental Nutrition Assistance Program (SNAP). It is also part of the discussion in new analysis of the types of jobs coming to North Carolina, which is finding that the state is missing out on middle-class wage job growth.

    In many instances, official government measures such as the poverty, unemployment, and related social safety net participation rates are used to reflect local economic condition.  These measures have long been recognized as flawed and/or limited Read more »

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