The Missing Middle Housing Around Downtown Raleigh

Land being cleared along New Bern Avenue. March 2017.

Land being cleared along New Bern Avenue. March 2017.

Just outside of downtown is an interesting project that I’ve been following. It delves into the discussion a bit as well as showing our council’s interest in the topic.

To be clear, and try to keep things consistent, I like to separate two types of housing with regards to affordability. The first is affordable housing, that being government-subsidized housing. The second being housing that is affordable. This one consists of housing that is relatively lower than comparable supply nearby. The latter is mainly what this post is about.

Raleigh should be striving for housing prices that offer choices to all levels of the socioeconomic scale.

New Townhomes are Being Built Today

With that said, today, land is being cleared to make way for a new set of townhomes along the 500 block of New Bern Avenue. This is right across the street from the New Bern entrance to City Cemetery. Previously, the land contained zero buildings and some of it was surface parking.

The project is called 10 Arros and offers luxury, high-end units with prices starting around $485K. There will be ten, three-story units evenly divided across two buildings.

If you’re a regular reader, townhomes like this aren’t anything new, right? This project has a longer history though and it’s worth posting here in full as a bullet point in Raleigh’s “housing that is affordable” conversation.

Rolling back to 2016, plans to combine a few parcels together along New Bern Avenue were submitted to the city to build two-story townhomes. The plan was for a total of 10 units divided evenly between two buildings. A parking lot would be built behind the units who would have front doors facing the sidewalk.

Here is the location of the project then; it is the same location now.

Map of New Bern Avenue

500 block of New Bern Avenue. Image from Google Maps. Click for larger or jump to Google Maps here.

The developer, Stuart Cullinan with Five Horizons Development, wanted to target starting families with these townhomes. During a South Central CAC meeting that I attended, he reported that the townhomes would cost in the low $300k range. I have emailed with Cullinan about the project a few times in 2016.

While $300k-$350k is not a price point that exists for minimum wage workers, it does go against the trend of new single-family homes being built in this same area. New construction homes in East Raleigh in 2016 were being priced throughout the $400K-$500k range. A few were lower, and a few higher but that has been my experience as a resident in this area.

The Ten at Person Street townhomes

The Ten townhomes, located on Person Street.

In my opinion, I consider Cullinan’s proposal as affordable. This is very similar to the townhome project on Person Street called The Ten, which we’ve covered here on the blog.

The Ten had units priced around $300k. Naturally, they were bought up very fast.

Welcome to the NCOD

Going back to Cullinan’s project on New Bern, there’s a small catch with the location of the property that limits what his company can do. It is located in the New Bern-Edenton Neighborhood Conservation Overlay District (NCOD for short) and the type of townhomes proposed are not allowed.

You can dive more into NCODs here on the city’s website. The New Bern-Edenton NCOD was formed in 1992, a result of a revitalization plan for the area that was worked the previous year. Basically, the intent was to encourage home ownership rather than a high rate of rentals and boarding houses, a big concern at that time..

Here’s where it starts to get tricky and if any readers in real estate are out there, I’m opening up this post to you to explain this in greater detail, with credit.

Map of New Bern-Edenton NCOD

Map of New Bern-Edenton NCOD. Townhome project is highlighted in orange. Click for larger.

The NCOD’s regulations, particularly minimum lot size, 4,000 sq. ft., and minimum lot frontage, 30 feet, basically make it impossible for a fee simple townhome ownership structure to exist. Only condominium ownership can exist under those regulations. A report from the city (source #1) explains it further:

It is important to note that a building form that looks like a typical townhouse could be built today under the NCOD regulations. The key difference is the ownership structure; to meet the minimum lot size of 4,000 square feet and minimum lot frontage of 30 feet, the townhouses would be required to have a condominium ownership structure instead of fee simple ownership. Fee simple means that the property owner would have absolute ownership over both the building and the land underneath i.e., each townhouse would be on its own lot. Condominium ownership means that the property owner holds title only to the air space or building itself, not the land underneath.

The report goes on to say that the built character of the neighborhood today is very consistent with the regulations of the NCOD. No townhomes exist within this NCOD however they are not disallowed. It’s that ownership model that presents a bit of a problem.

Mr. Cullinan, who is also a resident within the NCOD, requested a text change to better align with fee simple townhome ownership. Presented as a compromise, the proposal would affect a subsection of the NCOD, mainly along New Bern Avenue and Edenton Street.

Map of New Bern-Edenton NCOD with townhome study area

Map of New Bern-Edenton NCOD with townhome study area. Townhome project is highlighted in orange. Text change only affects area in yellow. Click for larger.

To the best of my knowledge, a fee simple ownership model allows for cheaper units. Compared to a condominium model, fee simple allows for less overhead and a different financing scheme, which keeps cost down. (Here’s where I’m looking for elaboration from our real estate readers.)

Now comes the fun part. Getting this approved.

The For, The Against, and the Council

We have a few players here in the NCOD including:

In a June 14, 2016 Raleigh Planning Commission meeting, the text change was under discussion and ultimately passed with a 7-2 vote. The text change now moved on for council approval. Meeting minutes of that planning commission meeting are linked to at the bottom of this post.

The Sept 6, 2016 council video is one to watch for yourself as Cullinan, well Cullinan’s lawyer, makes the case for the text change, along with dozens of residents in and near the NCOD who came out in support of it.

At the same time, those previously mentioned were there against the text change. If the video doesn’t show for you, watch it here on YouTube.

I know it’s almost an hour long but I consider this an important watch for any civic geeks who are reading. We have long established community leaders and historic preservationists up against a new Raleigh citizen that’s looking for something different. Here’s my rundown, with highlights, of the video for those in a hurry.

After that hearing, the council took it up for discussion.

Council Discussion Summary

To summarize, the council was squeamish on this one and seemed to have a problem with the way a change to an NCOD is taking place. They even had to ask if Cullinan followed the city’s process to apply for this change. It was followed correctly and the council recognized they had issue with that process itself.

Councilor Stephenson showed his concern over this text change and recommended an individual rezoning that was supported by only the immediate neighbors rather than a broad change affecting more than 100 properties. A conditional-use rezoning on the property itself would be better, in his opinion, rather than a large area change.

When Councilor Cox asked a question to staff about how a different NCOD came to be, among other info, it was stated that 51% of the property owners had to approve a rezoning for the NCOD to take affect.

The council then seemed to get hung up on the 51% figure. Councilor Baldwin proposed deferring the entire case so that Cullinan can get 51% show of support, from within the NCOD, before approving the text change.

The rest of the council didn’t buy it and instead denied it in a 5-3 vote. The motion was to deny the text change so the breakdown was:

Final Thoughts

After this, the affordable housing advocates may have felt that they won. Neighborhood protection advocates also may have felt they won with Oakwood stating on their website:

We feel the right decision was made. Some of the reasons cited included: the change being initiated by a developer and not residents, parsing out a subsection of the NCOD for the change, pursuing a change for the entire NCOD as opposed to a specific parcel, and the precedent of chipping away at long established NCODs. Additionally, we are pleased because by not changing the lot width from 30ft to 16ft, we avoid the potential risk of tear downs of historic properties not protected by historic district designation.

*New Bern-Edenton NCOD Text Change Request Denied

Fast forward to today and modern townhomes with a higher price tag are being built on the property along New Bern.

Why do I feel like we missed something here?

It’s as if government-subsided, below market rate housing is acceptable as well as high-priced new construction that “maintains character” but nothing in between.

The change was to allow a different ownership model, not building type. Instead of fee simple townhomes, we now have condominium townhomes. I don’t know the intricacies of the differences but by fighting against this change, you’re supporting a higher priced product in today’s market.

I don’t have the experience or training to be able to think what the change might have caused. There may have been unintended consequences if the text change took place. We may never know unless we try.

However, we now have a real-world example of our city shooting down private sector attempts to fill the “missing middle” housing in Raleigh.

As a side note, this isn’t Cullinan’s first attempt. You should look into his other project, 1335 Courtland, which was shot down by the Mordecai neighborhood. Read more about that on the Raleigh Public Record.

At the end of the day though, the project is the path of least resistance. I place no blame on the developer. I applaud him for all the work he’s done to present this issue and make some noise about it.

To just work within the limitations of regulations presented to you seems easy. To go against it means you have to herd cats and that is awfully time-consuming.

Putting politics to the side, the impact of ten units priced near half-a-million dollars may not seem like much but as more continue to pop up onesie-twosie, downtown loses more of its mixed-income character and limits access to those that can’t afford it.

Is that the downtown we’ve planned for?

Sources:

  1. Built Environmental Characteristics and Regulations Report – New Bern – Edenton
  2. Raleigh Planning Commission Meeting Minutes for June 14, 2016

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Comments

Another frustration of mine, beyond these bureaucratic hurtles that you’ve identified, is just the general level of resistance to building infill projects in some of our neighborhoods. I’m 100% (100%!!) about maintaining the historical feel of our communities (and think Raleigh needs to do a better job on that front) but when we’re talking about either vacant lots, or poorly utilized land, I think townhome and row style house are a great option. Down in Boylan Heights, their infill project against Western started out with homes that were in the 300’s (lack of housing inventory in this neighborhood bumped up the prices over the last year or so), and Mordecai has a similar project proposed that has created a lot of internal neighborhood resistance. I hope to see more townhome styles and row houses pop up over time, they’re an excellent option for first time buyers that want to stay in DTR, but frankly even as college educated mid to high income earners, are being priced out (let alone the affordable housing discussion which is obviously in dire need of attention as well).

Mary makes an excellent point. I would add that rowhouses, far from being a ‘starter’ home, will eventually be considered ordinary housing. There’s only so much land ITB, and it’s already prohibitively expensive to build a suburban, detached house in most of it. My hope is that most of the underused land gets developed like DC or Philly, with rowhouses aimed at various price points, from “affordable” to “luxury” adding density 3 stories at a time.

This is an example of how land use policies and zoning work against the city. In the name of preserving neighborhood character, we prevent lots of new development. In doing so we kill the opportunity for new character to develop. We decry tear-downs that turn into “McMansions” (see N&O article from yesterday) and “bland” apartment construction, but largely that is all developers are allowed to build. The economics exist for rowhomes, duplex, 4-plex, and small multifamily properties to be built and be successful if the land use and zoning allowed it. Ironically, the “character” of our oldest neighborhoods that we wish to preserve can not be built under today’s zoning and land use scheme. Shouldn’t we work harder to build more liveable, high-character places?

At corner of Seawell and Lane (which is within NCOD) a developer recently purchased an adjacent duplex and triplex for 434k in total. The developer proceeded to tear this affordable housing down to obtain two small lots (.14/.12ac) and is now building two single family homes (one on each lot) with prices in the 600k range.

At the 10 Arros hearing the usual suspects came out to speak in opposition of the townhouse proposal. I find it sadly ironic that their successful opposition effort lead to an even more expensive project being developed instead. This developer tried his level best to build something affordable but the old guard worked to stop him because any change, it seems, is viewed as an affront to their historic neighborhood.

Well, change is a comin’ as they say whether the old guard wants it or not. The protections of the NCOD didn’t stop the razing of two affordable multi-family buildings to make way for those expensive houses and there’s nothing in the NCOD to stop this trend from continuing or even accelerating.

The old guard needs to accept the fact that their neighborhood isn’t going to remain as it once was and start embracing affordable housing options before it’s too late.

Leo-
Thanks for digging into this and putting it together. I was blown away by the price of these – it seemed like they were priced for where that market may be in 5 years.

It’s unfortunate the level of push-back and vitriol that developers get in downtown Raleigh. There seems to be a very vocal demographic that wants Raleigh frozen in time, and views all developers as crooks.

@Matt,
The price for these, and especially the Hargett Place ones will be interesting. The higher than expected price point will definitely encourage people who are looking long-term. That being said, as of last week 4 out of 10 were already under contract. If this does well, it’ll encourage similar developments and the gentrification people are worried about will just accelerate. I personally think it’s inevitable anyway.

I also agree about the vocal criticism downtown. Two projects stand out, the Element Hotel and the City Centre (300 Hillsborough). Both were opposed because they didn’t “fit” the character of the neighborhood, which was a real head-scratcher. I think a certain population thinks “downtown” is limited to Fayetteville St. My hope is that developments like Edison, 400H, and Dillon will destroy these illusions. I suspect that the tallest building downtown will eventually go between West and Fayetteville Streets, and Wilmington will eventually Rival Fayetteville in terms of high rises.

Kudos to you for digging into such a complicated issue. Thank you.

I agree that Raleigh is seeing way too many unintended consequences from the regulations that were put in place to “guide” development. As someone above mentioned, these myriad regulations mean that the only way developers can make money is by building giant block-sized midrises. If we want more diverse housing options, we need to simplify our regulations and stop allowing NIMBY neighborhood coalitions to shoot down every project that they don’t like.

It’s good to see the “missing middle” being discussed in Raleigh more. It can serve as a good buffer between higher density residential/commercial/office and lower density single family, increase the housing stock, etc.

I think the concerns over its location are valid, to an extent. The NCOD was put in place for this very reason, to strengthen development standards in certain parts of the city. It’s like living in a subdivision with an HOA, you want to control (to a certain extent) what your neighbors do with their property. In this case, it seems to have backfired for potential residents. The developer has to be happy, pocketing close to $2 million more , but affordable housing advocates and residents worried about gentrification must be kicking themselves once again.

I understand the need for different levels of pricing downtown… however, my opinion is.. maybe downtown or ITB doesn’t work for everyone. Maybe look at areas with a price that meets your needs a little further out. If someone were to build housing that is inexpensive in a prime location.. they would just be giving the equity to the buyer to sell and pocket in the next few years. I believe downtown to be prime real estate for Raleigh, and I believe the prices should match. If I were to want a house on the water at the beach, I don’t believe they should build less expensive homes just so I can live there too. If I were a builder, putting in a nice quality home.. of course I would want to make the most money I can.. we all do when we sell our own homes.

I also think that our transit system needs MAJOR help. I think that we need some sort of train system to take people from Raleigh to Durham to the Airport. And another train that went north and south from downtown to south of raleigh.. that would help the commute for those who need it. I do not believe putting hundreds of buses on the streets that create more traffic is the answer.

I think the downtown historic districts are beautiful. I love the fact that there are guidelines put in place to keep these homes and neighborhoods inline with the history of Raleigh. I personally don’t care for areas of Raleigh where anything goes… one house can be a 100 year old home, the next can be a brand new 4,000 sqft home, the next a contemporary looking home and the next a row of town homes. I would love to see a whole street or section of brownstones.. I like the ones they are currently building.. but no where near the same look and feel you would see in Boston or DC or NY.

And as for the 5 story midrises popping up all over.. I am sick of those. I think they are great to bring density to downtown.. however.. I think downtown Raleigh deserves better. I think we deserve better quality and better design. I see a lot of great projects going on in Durham.. how can they accomplish this.. but we can’t. We are the state’s capital. We need to have higher standards.

@Nighthawk,
Downtown obviously doesn’t work for everyone from a price perspective. However, the topic at hand is about artificial price inflation. This is caused by unnecessary regulations or restrictions. Two examples of this would be the height limits downtown and the policies that forbid townhouses on New Bern. These artificially inflate the price of housing, which I think most people agree is bad. Obviously, prime locations come with prime prices, as they should, but there’s also going to be a difference in design. Hargett Place for instance is aiming for 700K, while the 10 on South Person were more like 300K. I don’t think the locations are very different, which means the price difference comes down to design. I think the best policies get rid of the artificial price inflators and let the market decide the rest.

Also, if we can’t have neighborhoods where “everything goes” as you put it, then we just can’t have rowhouses near downtown. There isn’t a big swath of underused land waiting to be redeveloped, so any rowhouse development will be mixed in with detached housing. Most cities have mixtures of architectural styles and eras.

This is great discussion that will continue for some time, especially when addressing development occurring on the east side of Downtown. I do not think the intent of the NCOD is misplaced, but I do think that some of the regulations can be too rigid, which in turn limits the ability of the market to meet demand. Increased density is a natural progression of these areas just outside of downtown. Construction of middle housing can absorb demand without relying on big blocks of apartment buildings. These regulations perhaps should have some form-based components that take into account trends in the neighborhood overtime.

The 10Arros project is still hundreds of thousands of dollars cheaper than the Hargett Place project. If Hargett has put the current ceiling on the market, as I believe it has for a very similar sort of product as 10Arros, why wouldn’t a developer want to play under that ceiling to his advantage?
In the free market, the cat was out of the bag the minute Hargett Place went for pre-sale. Heck, it was probably out of the bag earlier than that when modernist homes were building designed & built on narrow infill lots by the hipster architects. Besides publicly operated affordable housing, the days are numbered for the poor in the community immediately on the east side of downtown. The days are also numbered for “middle” income families as well and that window of opportunity is quickly closing all the way to S. Tarboro St. (if not further east). Anywhere deemed walkable is at risk and will continue to be in high demand.
The city will be motivated by revenue. In order for the city to thrive, it will always have to look toward making its available land as financially productive as it can through tax revenue. This is especially true since the GA took away the city’s ability to annex largely at will.

Agreed. It’s silly to fight against market forces, but we also shouldn’t exacerbate the cost of living increases through bad policy.

There are still a lot of basically empty or abandoned parcels on that side of town. Even S. Blount and Person St’s are could really be improved.

Agreed Steve but who is going to develop for the middle now that developers are selling townhomes in the immediate area for ~500K and up? To not follow their lead is leaving money on the table. No amount of public policy change now is going to turn that boat. This is classic gentrification. For anyone in the middle incomes that wants to be near downtown, they are going to have to start looking at the areas that haven’t yet been discovered by the big money or they will sit on the sidelines forever. To see the future of the east side of downtown, all one has to do is look at what happened to S. Saunders St. between Cabarrus and Lenoir.

That’s a fair point. I think there’s still room for 300-350K townhouses in that area. But, your general point is absolutely right. I think the next waves will be further east and south of Western, especially once the BRT is built.

What are the townhomes near Cabarrus St you mentioned listed for?

@John532
And that’s what blew me away with the pricepoint – that there’s already a market for townhomes of this cost while there are still empty lots or single family homes that can be renovated for less than this ($450k).

@Steve. I am not talking about townhouses on Cabarrus. I am talking about how S. Saunders between Cabarrus and and Lenoir completely flipped from being one of the most rundown and poor streets (and presumed dangerous by many) in a VERY short time frame. Go to Google Maps and streeview any part of that strip. Scroll back the street view to 2009 and then again to 2011 and be shocked by what happened in 2 years!
@Matt. I am also blown away by the price point of especially Hargett Place. Frankly, I want it to fail at that price point because I don’t want that price point to be the aspiration of all future developers. To your second point, I agree that one can get into a SFH for that price or less but there are a lot of people who want to live downtown that specifically don’t want to take care of a stand alone home.
Given that practically everything being built downtown right now is rental, I have to wonder how limiting the ownership housing opportunities is driving these sorts of prices. I also wonder what might happen if developers started offering condominiums again. Would they be as expensive? Would they keep the price point moderated?
I would really like to see micro-units offered in DT for both rent and for sale. While this offering isn’t going to address families, it would offer a product for more moderate singles and couples and broaden the range of income levels possible in downtown’s future.

Excellent article, Leo. One thing remains unclear about the difference in price between the $300-350K as originally stated, and the $485K as now advertised. Are you sure this price difference is due to these being condos rather than townhouses? Market dictates price. Why would anyone pay an extra $135-185K for the identical home set up as a condo rather than a fee-simple townhouse? I would think a fee simple townhouse would be more desirable because it has its own land, and no condo fees. Something is missing here.

I think there are two problems at hand here. 1) is that our downtown is a place people with money now want to live, and it is extremely finite in size compared to older cities. If Raleigh had more downtown-like areas, the rush to downtown wouldn’t be as acutely felt in prices. But this is a problem across the globe…people with money jack up the prices in the areas they deem to be the most desirable. Everyone else scrambles to survive. But this segways into my second point 2) Capitalism. Capitalism is profit driven. Developers tend to chase money more than altruistic ends. Nobody wants to serve the middle market (if you think I am wrong then why are in this situation?). Grocery stores, medical facilities….most people out to make money are aiming for the most they can bag (I’ve read articles regarding both of these lately). Sure there are good folks all over who serve an area and wouldn’t change for anything…Larry’s Super Market comes to mind. A few community doctors out there. But not nearly enough to take care of the massive need in this country and the world really.

Matthew, I’m not exactly sure and I would love if someone in real estate can explain that. The developer claimed he could offer a lower price if he could do fee simple. Since he could not, it looks like he went condo and in today’s market it makes more sense to market it at a higher price point.

@Leo, I would suspect that “today’s market” has more to do with the new price point than simple fee prevention. Any delay in getting this project out of the ground due to the discussions with the city and community likely prompted the developer to reconsider the product and the price point as the market was rising during any such delay.

I don’t know anything about this specific topic, but here’s my observation.

It seems counterintuitive to me that a lease hold ownership structure would increase development or financing costs or decrease profitability compared to absolute ownership, because essentially with a lease hold product the developer is selling the same unit, a townhouse “condo”, but retaining the equity of the land. From a financing perspective, condo scenario seems more favorable. It seems a lender would be more inclined to offer desirable terms to a lease hold development because if the project completely fails there would be more collateral to reclaim. Juxtaposed to a townhouse developer who sells 2 out of 10 units and then defaults, the lender could not recoup the land of the 2 sold units.

We can’t do anything about the market forces driving prices up. It is a supply and demand issue as Mark mentioned. What the city could do is loosen certain restrictions as it relates to what can be built on these lots, i.e. more units. A 4-plex allows 4 units for sale or lease on what was once a single family (1 unit) location. These prices would inherently be lower and allow residents from a wider variety of income brackets to live in the same neighborhood. A street with duplexes, townhomes, condos, and apartments makes for the widest array of residents building “character” and keep the city as live-able and affordable as possible.

Townhomes are significantly less costly to build. They are built under residential code and do not require any P/M/E/FA//FP engineering to permit. Condos are built under commercial code with full fire alarm, sprinkler, etc along with all associated permits.

Great point, Mark. Maybe we need more groups like the Downtown Raleigh Alliance or the Hillsborough Street Community Service Corporation to advocate for areas outside of Downtown. DRA has done a lot of work that enhances the private and public investment Downtown. This type of coordination and focus would do a lot even in booming areas such as Crabtree and Midtown (Six Forks to Wake Forest Road) and but definitely in South and East Raleigh where the Wake County Transit Plan call for Rail Transit and BRT.

My understanding is condos are significantly more difficult to finance (80% max. period) for a buyer plus the HOA capital requirements (10% set aside per year), and hence dues, are also higher. My understanding is also that a bank will only finance 50% of new condo construction so there is a lot a builder equity here too (post crash anyway…not sure if anything has loosened up since then). Having said all of that I think the increased price for these is a simple as a newfound understanding of the market for modernist architecture in Raleigh and particularly in eastern downtown.

Mark,
The point about the desire for Modernist homes is right on the money. I personally would love to see a proliferation of such homes near downtown. Raleigh’s already known for it, and we should build on that legacy.

I’m a fan of them for sure. It’d be cool if we had so many that we almost became a tourist destination for them. I was roving around both east Austin and north Missoula Montana recently and both of those areas a chocked full of them. Made for awesome strolling around during the day. We are lucky to have the NC State School of Design here (and the resident grads) plus folks like Gensler, New City, Cherry Huffman, Frank Harmon, Raleigh Architecture et.al.

Check out this home at Realtor.com
$1,393,280
3beds · 4+baths
226 St Marys St, Raleigh
http://www.realtor.com/realestateandhomes-detail/226-Saint-Marys-St_Raleigh_NC_27605_M53429-73513

@Thenighthawk. Too damned expensive but at least they look like they have double car garages. For this kind of price, I expect a much better digital marketing package. Those elevations are very, very basic renderings and don’t tell you enough about what you’re getting. I do have to say that I like the interiors renderings better. I wonder if they’ll have elevators?
Like Hargett Place, I think that this is too high for the market. That said, this townhouse is gigantic and appears to be priced lower per square foot than Hargett Place.

For those interested in the nearby 8 acre lot at the corner of New Bern and Swain, the NCOD trumps the Neighborhood Mixed-Use zoning that exists there. This is from the city’s planning department.

“The NCOD regulations trump any regulations in the NX district where there is duplication. As such 4,000 SF of land area is required per dwelling unit, new lots must be 30’ wide, new structures have a 10’ minimum front yard setback and a maximum front yard setback of 25’. Side setbacks can be 0’ when no-build easements are secured on adjacent property assuring a 10’ separation in perpetuity. Lastly, building heights are limited to 35’ to the peak of the roof.”

This is a bit disappointing for a planned BRT route and wonderful site to actually provide a mix of uses rather than adding more single-family homes. (and towhomes as mentioned in this post)

@Leo, that’s really, really disappointing. 8 acres that close to DT proper is not the sort of parcel one comes by regularly. @4000 ft2 per unit, this parcel is only allowed 87 units. To put this in perspective, 87 units is approximately what the Paramount has but it sits on only a little more than 1 acre of land. This is huge missed opportunity.
Of course, since the land will be expensive and the units allowed highly limited, don’t expect anything short of ultra-expensive townhouses or, perhaps, more of those narrow modernist single family homes.

We weren’t going to get significantly more density there anyway. Honestly, I’d be extremely happy with 87 townhomes. That’s a nice medium-density development and it would probably integrate well into the BRT line. If BRT extends out to the Hospital, there are plenty of underused strip malls that can be redeveloped.

Not sure any real estate DTR will ever be affordable unless the market crashes and/or everyone leaves for the suburbs again. The bigger Raleigh gets the further out you will have to go for affordable housing.

I noticed on Maywood Ave (South Raleigh by Farmers Market) they are not building a shopping center across from Trophy but rather row homes like those on Dorothea Dr off Western. So even that far out the real estate is showing signs of density like DTR.

Well, I guess that a base hit is better than striking out but it’s still not as good as a double, triple or home run…mwah, mwah.
It beginning to look like the city’s dense urban core won’t move east. I suppose that’s okay but I’d prefer to see more mixed use neighborhoods emerging to extend the DT experience in all directions possible. The east side of DT with its basic street grid “intact” and generally flat terrain really teased me there for a while. If higher density isn’t going to be allowed on its main artery (New Bern), how in the heck can we expect that it will happen elsewhere? Downtown is really boxed in at the moment at almost every turn. I suppose I have to hope that the South Saunders and Lake Wheeler spurs heading out of SW downtown and S. Wilmington can live up to their potentials.

I’m glad the developer will still build on that site, even after the council no-vote. The actions of council seem meaningless since in this regard. Residents of the NCOD wanted to keep the character of their neighborhood, but it’s going to change anyway,so what did they accomplish?

@tino. I submit that they accomplished two things: 1) that only rich people would move into the periphery of their neighborhood and 2) that, by association, their property values would rise.

Correct me if I’m wrong, but doesn’t some form of 3 story mixed-use zoning extend from Tarrboro to Raleigh Rd along New Bern? Couldn’t that area be developed as a new “Main Street” area? It would lack high rises, but it could still be fairly dense. I could see the BRT linking downtown proper with a new “destination” on the east side.

Steve, I happen to live almost on the corner of Pettigrew and New Bern…squarely along the stretch you mention. It’s an overlooked area with a ton of potential. It sits on a nice hill with a view of downtown to boot. As an aside, the original Trolley route that served the baseball field at the time (pre Devereux Meadows) came down Martin, and up Pettigrew to stop almost at New Bern (interestingly while digging a garden bed I found a short railroad spike…like 5 inches long…I assume this is a trolley spike that somehow ended up in my yard). So anyway, way back then, the urban framework did in fact come out this far. http://www.legeros.com/ralwake/photos/weblog/images/2010-06-06-map2.jpg

The TBJ reports funding for 2 temp bus routes from Garner and Clayton to dry up. Says was used temp for the fortify project which is almost nearing completion on that end.

Ave of 22-27 ppl per day take those routes to downtown.

Cost was almost 400,000.00 per year. Fees from ridership brings in a little under 40,000.00.

A deficient of around (390,000.00.)

Numbers above may be a little high but ratio the same.

Thank god they are being cancelled.

@Al, Do you know what the cost is for the entire Fortify project? I ask because we never seem to care or question how much we spend on road construction but we are always quickly to analyze and discredit public transportation. I say “we” meaning the entirety of the country. While the ridership of the temp buses was certainly dismal, we have likely made all sorts of very expensive temporary accommodations for cars without batting an eye.
We don’t have ridership on the buses because we don’t build our cities in a model that works for public transportation. When we do offer public transportation and people rely on it, we are often overly critical of it instead of fostering development and comprehensive land-use models in support of it. At the end of the day, we wonder why traffic gets worse and sprawl continues to expand at an alarming rate.

John,

Yes, I do and I don’t like it. Seems like we have replaced that thing a couple times since I have been here in 1999.

I keep seeing property taxes rise and bonds being issued for roads parks and schools and at some point it will be as expensive as where I grew up but who cares.

Point being this tiny microcosm of the fact of the results should not be ignored.

We will need mass transit, but timing is critical. Too early and it is underused, it can’t be maintained and the tax payer sucks it up.

Too late and we have gridlock.

Atlanta for example did not do the best job at it. The roads are still a nightmare, people do not want to use it.

Yes I pointed out the mass transit part, I won’t ignore it even though I support mass transit.

It may have cost a ton to redo I 40 but it’s ridership just my justify the cost.

People in Raleigh proper may use mass transit, maybe, but in the outlying towns and cities it will be a challenge, especially if it does not pick them up where they live and drop them off where they work.

No worries, I just wait for the next tax or bond to come down the conveyer belt and keep slogging to work on my horrible 15 min commute of 13 miles.

AI,
I lol’ed at your last comment. That’s essentially how I feel every time I hear someone complain about “traffic” in Raleigh. 440 can get a little backed up at rush hour, but having spent part of my youth in DC, I always giggle at the histrionics of local anti-traffic crusaders.

I do think the Wake Transit plan is going about this the right way. Start by increasing service on existing bus routes, with emphasis placed on the most popular routes; identify transit corridors and zone them for dense development (take a look at the explosion of density along the light rail extension in Charlotte); build a commuter rail connecting the region’s three largest employment centers. The impacts of these are respectively: immediate, near-term, and long-term. Commuter rail will struggle to attract lots of riders in the beginning, but as RTP urbanizes and DT Raleigh and Durham expand, it’ll eventually make more fiscal sense.

Steve,

Funny you mentioned DC and what really needed to be addressed in that area was Northern VA.

So far after adding the mixing bowl in Springfield and extending the HOV lanes up to Quantico and in the future Fredericksburg has made a huge difference in that area. I lived and worked in that area and by adding more roads and extending HOV it has made a huge difference.

The best part is that it is self sustaining, if you use it, you pay for it, it is actually on target to turn a profit.

We will have a hard time making mass transit profitable at this point, we do not have a large enough population, we will eventually.

It is good to start collecting and banking the money for the next 10-15 years before its needed. Plan, plan and plan for the best outcome and have it paid for before it starts or else we will be chasing this thing forever.

Then you just keep dumping cash into a never ending black hole of underused transit.

Well, I think the system’s immediate needs are probably enough that Wake will have trouble ‘banking’ the money at any point. There’s an immediate need for more buses, bus shelters, etc. Basic things that should have been addressed years ago. The BRT will take a lot of money to plan and implement (and BRT is sort of like an HOV lane). If done right, BRT will encourage higher-density (that’s a relative term) development along Western, Wilmington, and New Bern, and extend the urban footprint outside of DT proper. I really hope the city encourages buildings of at least 12 stories along Wilmington and Western.

Steve,

Agree with all you said. Not every tall building has to be in downtown. You can see how great that works in other areas of the city outside of downtown and it works pretty good.

Strange to see in Mid Town but I have sat out at all times as I am around it a lot and somehow the traffic in and out of that high density area flows OK except for rush hour but still not overwhelming.

I just want to thank for and reiterate John532’s point about the ‘land use models’ being part of the transit discussion. The DC mixing bowl is awe-inspriring anger for me every time I drive through it (back to that in a second). But really every green-parcel-development post WWII has been some version of a mixing bowl. Cul-de-sacs. Looping interstates. 1000 resident subdivisions with like 2 outlets. It’s crap. Even new-urbanist stuff is nothing like actual old urban street grid urban buildout. They are always far flung out on some country road, disconnected from the original urban center. (looking at you Southern Village, Meadowmont and Carpenter Village). All of our best options are limited in effectiveness because of the built environment since WWII…..and nobody, absolutely nobody seriously discusses changing that part of the equation. Certainly Raleigh, and its pseudo progressive tilt, will not ever start such a discussion for it might scare off the developers. I suppose this is an aside, but I’ve made upwards of a hundred trips to DC myself since the early 90’s, and traffic there seems worse than ever. You’ll never HOV lane yourself out of it. 3am, 11pm, 10am, into, out of the City, from the north, west, south….I’ve only one time…and I know its one, because it was. just. one. time…..didn’t get caught in a standstill in the last ten years. DC, among others, will continue to tread water until the day most people don’t need to commute to an office to work …that being the only actual solution here. The idea that you must be in an office to work is about as outdated as the idea that you must work or be condemned to starve (another conversation of course…)

Mark,

I think my point initially was if we are going to spend money on rapid transit reengaging the cost for the two bus routes that are temporary would be stupid as it does not even come close to serving its intent (move a busloads of people past the traffic snarls caused by fortify). I don’t think that 22 seats a day, 11 per bus if they only went back and forth twice a day should cost nearly a million bucks to US tax payers. That kind of spending will kill the system. Use that money to serve other more in demand routes or for other trans costs.
It appears from the reports that people don’t mind sitting in traffic as opposed to sitting on a bus.

You are correct, working in an office is old school but a lot of regular joe’s don’t have that option.

Went to DC for a race 2 weekends ago, coming and going in the morning and afternoon, no problems.

Indeed Al, and I agree with the basic monetary conclusion. But here’s a thought….I don’t think anyone really thought people in Garner or Clayton would ride a bus to Raleigh. I think the real purpose of the routes (and defense of the costs) is 1) it was a preemptive defense of the traffic criticism…”see, we gave you guys an option!” and 2) it was sort of a chance to research and see, *if* transit would be used by people in those far flung places….if nobody will sniff the bus, it provides useful data for any musing about running commuter rail out those directions. So that million bucks very well could have been a combination of propaganda and research and not just straight up getting 22 people to work and back every day. Or not. I wasn’t in the war room on that one.

Mark,

Makes sense to me, war rooms are amazing places.

Actually, there’s a third piece to the puzzle, which validates Mark’s theory (I think). Fuquay also got a bus route for the Fortify project, and got more than twice the number of riders as the other two combined before Fortify even started (most recent stats I could find were from 2015, when it was moving 50 people a day). Because it has decent ridership, it’s going to continue.

Steve,

Does it pay for itself? Even with 50 riders a day your talking 80k of the 360k it costs to run.

Honestly, I don’t really care that much about the money as the nation, state and city poops it away every year.

I want people to get to work and have the option.

I am just trying to figure out long term on a much bigger scale if this micro trend becomes the norm that it will never pay for itself. At that point it’s a never ending black hole.

I can see being at a red light and watching empty lite rail going by complete empty like I see 2 miles outside of CLT when I visit my kid.

It will be interesting.

Al,
As far as I know (and please, if you have data, feel free to prove me wrong) the only mass transit systems in the world that pay for themselves are in Asia. And, even that metric only covers operating expenses, (meaning it doesn’t cover capital expenditures). So, this “microtrend” as you call it is actually the norm already. Granted, there SHOULD be some minimum for ridership and revenue, so it’s probably good that the other two were cut for low ridership.

Steve,

You are correct. Virtually no mass transit system ‘pays for itself’ based on ticket sales, etc. Then again, neither do roads. Mass transit naysayers always leave out one key economic aspect to their ‘anti-transit’ arguments and this is the tax base that is created around mass transit stations. When one factors the tax base, sales revenue, lowered impact on highways, etc, all of a sudden mass transit DOES start to make economic sense………unlike roads.

Uncle Jesse,
You’re 100% accurate. That’s why ridership, rather than revenue, should drive decisions about routes. Losing money at the farebox on a route that moves lots of people is beneficial, but losing money on mostly-empty buses, when other routes need investment, is bad policy.

Also, bus routes typically don’t spur the kind of development you mentioned, but hopefully the BRT will. It has fixed stations, and much nicer buses, and feels a lot more like a train than a bus.

Uncle J,

OK, I get it, As long as it’s not a business its ok to run it into the ground, or maybe we just ignore the operating deficit so we can just keep raising taxes on the same people that will use it and the people that will never set foot in it. We can continuously raise fares on the riders so since they use it while it will still never pay for itself anyway.

Makes sense to me, since its not a business it will never fold.

Then when it starts to break, its not on time, dirty, trashed and otherwise unavailable for service the riders will be up in arms and want better service.

Hey just raise more taxes and bonds, what the hell why not.

I think that everyone wants mass transit but we have to look long term.

I use many of these “mass transit systems” in cities, and yes it shows very clearly on the employees faces just how wonderful the deficits have on moral and facilities.

They are always in need of repair, the employees are miserable, they have retirement programs that are in debt.

A system that pays for itself will be state of the art, updated, modern, employees productive and if done right could actually make a profit by moving more than people around.

Just because everyone else runs a crappy system does not mean we have to, we have a ton of smart people around here, I am sure we can do much better.

Why don’t we change the same old same old.

If not this thing will be on the front pages every week.

Can’t wait!

Anyway

Well, it’s not so much that other cities run ‘crappy’ systems, as much as making a profit isn’ the actual purpose of a mass transit system. These are public services meant to serve everyone, but especially those on the lower end of the income ladder. If we charged a market price for bus ridership, it could price out most of the current ridership. Again, this is why ridership, rather than revenue, should drive route choices

my point being, it should be or it will be a crappy system. What would the ridership level be to make it profitable. Why shouldn’t the goal be to make it profitable?

How can we make it profitable?

1. Sponsorship
2. Advertising
3. Deliver goods and services (business to business) small package service
4. Make it go to where people really need to go
5. Part of the airport transportation system
6. Part of the RTP transit plan, prepaid by employers
7. Partner with FEDEX/UPS/DHL for roll on off delivery pods at certain stations

Anything but putting the most burden on us taxpayers.

I sell to the government, when I go to meetings they always pound the table and tell us how they are trying to be good stewards of the taxpayer dollar and they want the best price.

Knowing this is a losing game from the start is not good stewardship right from the get go.

Unfortunately we don’t have data to inform this conversation, but here are my responses.
Why shouldn’t the goal be to make it profitable? Because, that’s not a practical goal. The city isn’t dense enough, for one. The goal should be to maximize revenue wherever possible, without pricing too many people out of the service.
To your suggestions:
1 and 2. The city already sells ads (and I’m not sure what the difference between advertising and “sponsorship” is).
3. There’s no way a city bus system will ever compete with FedEx or UPS in package delivery.
4. This is exactly what I was saying, by using ridership numbers.
5. The city already incorporates the airport into the system, and long-term plans call for a rail link as well.
6. RTP doesn’t have it’s own transit plan. Durham and Wake Counties have transit plans, and RTP is a focal point.
7. This idea might be worth exploring.

I agree that the system should maximize revenue where possible, but (again, I don’t have numbers to back this claim) the city is already doing most of what you suggested, and it’s far from turning a profit.

Why shouldn’t the goal be to make it profitable? Because, that’s not a practical goal. The city isn’t dense enough, for one.

Then is should not be done, drive or take the bus until we surpass the minimum population required.

The goal should be to maximize revenue wherever possible, without pricing too many people out of the service. What people, 25 or 50 at the current rate.

To your suggestions:

1 and 2. The city already sells ads (and I’m not sure what the difference between advertising and “sponsorship” is). It was just a suggestion

3. There’s no way a city bus system will ever compete with FedEx or UPS in package delivery. It’s not competing, its complementing there service saving them multiple trips.

4. This is exactly what I was saying, by using ridership numbers.

Not enough riders to make a difference. People outside of Raleigh are not going to use this, you can’t service enough locations. Dead on arrival.

5. The city already incorporates the airport into the system, and long-term plans call for a rail link as well.
I am suggesting that you make them a strategic partner, not another stop.

6. RTP doesn’t have it’s own transit plan. Durham and Wake Counties have transit plans, and RTP is a focal point.
I am suggesting that they be included in it as a partner.

I looked t the initial planning of routes, not enough POOR people. Wasting time going to the affluent areas, they won’t use it.

I don’t think we have enough human beings here.

I give, just raise more taxes and make this place as expensive as the places everyone else is moving from because its too expensive.

Almost all government provided services *don’t pay for themselves….which is precisely why government steps in to provide them. But!….it depends on how wide you draw the circle around a particular something. TIFs are a great example of widening out the circle….we provide this thing, which likely increases the surrounding property value, and the increase in value is directed towards the bond payments that made the thing. So in that regard as long as the economy is growing, perhaps virtually everything is paying for itself. Medicaid? Cheaper than emergency rooms. Drug treatment? Cheaper than prison. Etc etc. Most capital planning processes entail an ‘alternatives analysis’. Running net present values of 1) build this here transit plan 2) build more roads 3) do nothing, and see how that butterfly effect cascades out into the local, regional and Statewide economies, is how this stuff should be looked at. Treating transit as an enterprise fund is an unfair and short sighted way to consider transit’s effects and determine ‘is it worth it’.

Ah, ok. Well, I’m not sure we’re talking the same language.
1. No city in North America, including New York, which has the highest ridership and densest population, runs at a surplus. Again, this isn’t a practical goal for a transit agency.
2. RTP and RDU are both on the board of the Wake County Transit Plan. They’re both heavily involved in the process.
3. Raleigh will never be nearly as expensive as New York, Boston, DC, or any other expensive place, regardless of tax rates. Tax rates are a minimal factor in cost of living.
4. We’re talking about the bus system. People can’t “take the bus” if we eliminate the bus system.

Let’s revisit this on Leo’s blog again in about 10 years, we will all see some things become very clear and it won’t be pretty.

Peace out.

Other than affordability downtown and traffic, I think almost everything else about Raleigh will be better in 10 years.

Steve,

I agree, it will be incredible.

I remember downtown in 1999. Whoa, what a change already.

I don’t ever want to go back to that.

I was out on Saturday night, just listening to people talk at bars and its funny to hear them bitch about needing reservations, parking and so on, I will take that any day compared to the past.

It mat be so unaffordable that the people that need to use the bus to get downtown wont be able to afford to come downtown, lol.

What kind of buses were they using for the route, the bigger city buses or the smaller jitneys?

Al wins the award for most confusing comments of all time… If you’re going to quote someone’s comments, I suggest using some quotation marks!

Jake,

Thanks so much. It’s a blog not a paper. It’s just talk, exploration and discussion.

If you would would like I can submit my comments to you for editing, censorship and have them approved for posting.

It’s meant to be confusing, evoke different view points and counterpoints even if by the same person.

Not posting to argue and push any point of view to any particular person or group.

Could just skip over my posts and you can make it through the day with less suffering.

Al,

I think you have mistaken this site for Facebook. I’m guessing there are more of ‘your people’ over there.

Lol,

Uncle Jesse I have been reading your insane musing about unrealistic baseball, soccer and whatever the next stadium dream you have each night. Ugggggg

Hey guys, I haven’t heard of this downtown Raleigh development called Facebook or Ugggggg. Let’s keep it on topic. I encourage commenters to also swap email and meet face-to-face over coffee to debate the finer points of DTR.

Thanks Leo, keep up the great work!

FWIW worth Al (and others), I like discussing and rolling around in my head different points and points of view. While our venn diagrams don’t overlap 100%, the central coordinates are the same without a doubt. I prefer these discussions to just simply cheerleading stuff. I too have been in the area a long time, and started my downtown ‘career’ if you will, in 1992, my freshman year at State. I bring to the table a civil engineering background and capital project implementation, some knowledge of State and local government, and strong opinions about urban function and form (including environmental components, and historic preservation). Outside of that, my knowledge is cursory at best….so feed me..and correct me when I am wrong. (sorry folks didn’t mean to go full monty with the bio….maybe some introducing is in order…?)

Mark,

That is awesome, just the kind of people I can learn from. I am a software developer and just have an interest in this awesome blog is all.

So just trying to listen and learn and ask questions.

No harm.

Mark,
I think we all do. I certainly enjoy reading critical thoughts of my posts. But, personal insults and trolling are a pretty constant threat in any online message board. That’s the bit that’s concerning.

Also, I work in insurance and I was 3 years old in 1992.

Yet another reason to organize a reader meet up. It’s something I’ve always wanted to do but never get around to it.

@Leo – great idea! I would definitely go to that!

Alright. Sunday at The Dillon on West st. at 12:30pm.

Leo can be standing there waving a DTR flag haha

DTR Flag….yes!

Evan, are you being serious? If so, I’ll be there.

And to address Mark’s comments about government services: Yes, some of these services don’t make money, but that’s not the purpose, as you stated, and should never be the focus. The true purpose of government is to provide things that we as a community desire, or see as necessary, to maintain or progress in however we, as a community, see fit. And by pooling our money together through taxes we can create and provide things which we as individuals can’t.

But if it’s a failing venture that takes a constant influx of money and it doesn’t get the best value for dollars spent, then the money should be better utilized in a different areas. Failed programs shouldn’t be continued and propped up due to a sense of civic duty – that’s what non-profits are for.

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