People vote not only with a ballot, but also with their bucks. A Carrboro apartment owner (Tar Heel Companies of North Carolina or “THC”) has just voted to remove its capital from Carrboro's municipal jurisdiction after being villified by the town elected officials.

The “good news”? By selling out, about 255 affordable housing units are being created in Carrboro by the Boa's latest innovative affordable housing policy, unequal enforcement of property rights. Town government distaste for non-pal property owners can be combined with their taste for affordable housing for people of the right diversity.

Last July, the Pulp told the Abbey Court story, an apartment complex of about several hundred units located off NC 54 in Carrboro on Jones Ferry Road. Boa members very publicly intervened with the ability of THC to control who parks in their privately owned apartment complex.

Near to Abbey Court is a makeshift day worker pickup location. The complex is also near a bus stop and has been used as an unofficial park-and-ride lot. The Abbey Court manager has been facing problems with cars in the complex that don’t belong to renters. In response, the manager has made the mistake of enforcing parking rules that included requiring official parking stickers issued by the complex and enforcing the parking rules by towing away offending vehicles.

In most towns in North Carolina, such enforcement would be no cause for government intervention. But Carrboro isn’t like most towns. When a car owner facing his car being towed in Carrboro endangers a child by stuffing them into the hooked up car, neither Mayor Chilton (who was present) nor the police intervene for the safety of the child.

In response to this incident, the Boa met in a highly unusual summer recess meeting on 31 July 2008. After much breast beating over the apartment complex owner’s exercise of control over a situation ignored by town officials, the chaotic state of parking at Abbey Court, the Boa was constrained by home rule limitations on their authority to passing an ordinance limiting towing fees to $50 in Carrboro. The ordinance also limited retrieval fees to $100 and $20 a day for storage.

On 4 August 2008, the carnage at Abbey Court continued with renters continuing to endanger towing truck operators who are complying with the law. Mr. Jesus Sanchez Basurto, 25, claimed he didn’t realize that a tow truck driver had put a boot on his car. He got into his car and tried to drive it away from the tow truck before it could hook up his car. When the car wouldn't move, Mr. Basurto opened his car door to see why the vehicle wasn't moving. He left the car in reverse. It lurched backward and ran up on the curb. Somehow he was pulled under his own car, and the car ran over his foot. The towing truck operator did nothing beyond having already put on the boot.

THC got the message loud and clear. Don’t expect to have the right to maintain control over your apartment complex without the Boa strangling that right.

THC has responded by deciding to remove its investment from Carrboro. It's test marketing six Abbey Court two bedroom, one bath condominiums at prices ranging from $54,500 to $59,500 (“as is”) or remodeled units for $79,500. (See Chapel Hill Herald Abbey Court Sale Story.)

Showing Carrboro town government’s concern for THC, Mr. James Harris, Carrboro's ED guru, said ”I'm just hoping they will follow through”.

No word on the next apartment complex owner the Boa will chase out of town, creating more affordable housing.

No word on reaction from Mr. Robert Dowling on the creation of affordable housing units in southern Orange County that he doesn't control.

No word on whether or not Abbey Court will be renamed “Carrborini Green”.

What better way to grow and perpetuate a non-governmental, tax exempt organization (NGO) than to use the current chaos from the excesses of junk mortgaging to pull at the heartstrings of local governance officials. On 4 February 2009, Robert Dowling, the executive director of Orange Community Housing and Land Trust did so, bringing in an unfortunate person facing foreclosure this month.

In the words of Housing Lord Dowling, ”In these difficult times, our focus has changed. We are seeing more homeowners who are delinquent and looking at foreclosure.” Mr. Dowling’s answer to the current mortgage mess is to give more money to OCHLT. He wants an increase in OCHLT funding from the town of Chapel Hill from the current $201,386 to $230,000, or an increase of about 14%. How this increase paid for by Chapel Hill town taxes will help a person in foreclosure distress is unclear.

Not to be outdone, Ms. Delores Bailey, director of Empowerment, Inc., yet another non-governmental, tax exempt organization, asked for $200,000 in federal block grant funds to purchase more property for Empowerment, Inc..

Which then brought to the town feed trough yet even another non-governmental, tax exempt organization. Showing her considerable marketing skills, Ms. Susan Levy, executive director of Habitat for Humanity in Orange County, asked for $450,000 in federeal HOME and CDBG funding for Phoenix Place, a “green” development of approximately 50 homes. (See Chapel Hill Herald Housing Feed Trough Story.) No explanation is given as what makes a “green” development, but it sounds nice.

Multiple requests for more NGO feeding begs yet another question be asked of the Chapel Hill governance board. Why are you funding these NGOs when the town has its own housing empire backed by 18 full time town employees?

Extent of the Town Public Housing Empire
Chapel Hill is a town of less than 75,000 with an above average regional median income. Yet, it maintains an impressive public housing infrastructure of 336 units. Tenant rents (about $403,000 or about $100 per unit per month) are subsidized by federal housing grants to the tune of $1,161,069 per year (or about $288 per unit per month). In that manner, local residents aren’t aware of the true cost of public housing. A federal tax increase isn’t the same as a local tax increase to most citizens.

To maintain this public housing empire, Chapel Hill employs 18 full time employees, in addition to private contractors. The town pays housing employee salaries of about $1,000,000 annually, or about $55,000 per employee. For the actual housing units, the town pays $127,000 for utilities, $52,000 for liability insurance, and $282,000 for maintenance. That’s a total operational cost of $1,640,629 per year or about $4882 per housing unit ($406 per unit per month).

If you do the math ($100 plus $288 per month in, $406 per month out), then you can see that the town subsidizes each housing unit to the tune of $18 per month. (All numbers are based on the reported Town FY 2008-2009 Housing Budget.)

What the town doesn’t report on is the value of such housing. The town owns public housing units in the following locations: AMP 1 - Lindsay, Craig Domains, Trinity, Pritchard Park, Church/Caldwell, North Columbia Street; and AMP 2 - S. Estes, S. Roberson, Colony Wood, Eastwood, Oakwood, Rainbow Heights. However, it doesn’t report on the variety and average size of each unit. That way, you can’t tell if the private rental marketplace is more efficient or not.

Extent of the Town Housing Loan Trust Fund
Chapel Hill contributes “feudal tithes” annually to Lord Dowling’s empire, along with the town of Carrboro and Orange County. In FY 2006-2007, the town was budgeting $106,180 for the loan trust fund. By FY 2008-2009, the town had increased that amount to $201,386, an increase of 89% in two budget cycles.

Extent of the Town Block Grant Largesse
In addition to supporting Lord Dowling’s empire and running its own housing empire, the town dispenses federal block grants to “rehabilitate” certain neighborhoods. The town’s 2007 project ordinance budget provided $596,282 to rehabilitate public housing, assist in home ownership, and revitalize the Northside and Pine Knoll neighborhoods. Nowhere does the town report on the actual number of residents benefited by these grants. By not doing so, the town makes an assessment of program effectiveness and efficiency impossible.

One of the Orange progressives mantras is that housing is just plain unaffordable for “too many” locals. That phrase “too many” isn’t quantified, but rather is felt in one's progressive heart in a progressive way.

Pulpsters know that the progressive answer is to create a non-governmental, tax exempt organization that becomes self-absorbed in perpetuating itself. (See Peeled & Sliced Affordable Housing.) The local hallmark tax exempt, government grant institution for affordable housing (yes, there’s more than one) is the Orange Community Housing Land Trust (OCHLT).

The OCHLT business model is to get government money to pay salaries, pay expenses, and also to buy houses. Maintenance? Oops, OCHLT now needs government grants for that too! These houses are flipped to less than 80% median income buyers, with the retention of a ground rent by OCHLT.

What’s a ground rent? The buyers never own the land their house sits on. They own the building, not the land. This is the favorite mechanism used by the landed gentry of English cities to maintain control and power. Most of central London is based on the wealth and power building of feudal ground rents.

OCHLT goes one better. They include a restriction that prevents the owner from selling to anyone except someone approved by… you guessed it, OCHLT! They also include a restriction as to how much equity the owner can realize, despite what the moves in the housing market. OCHLT “serfs” can only get 1.5% gain per year of “service”.

So who can qualify for an OCHLT ground rent home. In a recent sales pitch on the wonders of the OCHLT in a Chapel Hill real estate advertiser ( Chapel Hill News OCHLT Promotion), OCHLT executive director Mr. Dowling puts forth that a family of three with an income of $51,350 in Chapel Hill or Carrboro needs government help in buying a home. Of course, the help he has in mind is buying a home owned by the OCHLT in perpetuity, giving Mr. Dowling a job, in perpetuity.

Is a local family earning about $51,000 in trouble? According to Mr. Dowling, a former New York City banker and above median income earner, it is. That family earns less than 80% of the local median income.

So what can this economically disadvantaged family buy without Mr. Dowling’s help? What can they buy where they get all of the equity value increase over the years? According to a web based real estate database ( Trulia) the median home price in the Carrboro 27510 zip code area (historic Carrboro) for July to September 2008 was $182,500. (Half the homes sold for less than $182,500.) According to standard mortgage guidelines that family can afford at least a $150,000 mortgage. With a ten percent down payment, they can afford at least a $165,000 house.

Amazingly, local governance boards don’t ask the OCHLT how they qualify the $50,000 economically disadvantaged family. Are two potential income earners in the family? Has one simply elected not to work? Has one simply elected to earn less than their income potential because the OCHLT program is available? What is the net worth of the potential income earners in the family? Are any trustafarians (receiving money now or in the future) in the family? According to Mr. Dowling, it’s first come, first served… in perpetuity. All paid for by local taxpayer grants to OCHLT… in perpetuity.

No word from Mr. Dowling as to why local institutions will pay living family wages if they know the OCHLT stands ready to support a family on non-living wages?

In particular, no word from Mr. Dowling on why the hundreds of local tax exempt organizations would pay a living family wage if they know the OCHLT stands ready to support a family on non-living wages?

In March 2008, the Pulp reported on the Boa providing a cornucopia of monetary gifts to Roberson Square, one of the many developer pal groups concentrating on densifying the Carrboro historic district.

The developer pal party continues with an even denser project.

On 26 August 2008, the Boa approved the Butler project off Brewer Lane. As approved, the current 3400 square feet of commercial use (sf) will balloon to a lower floor of 22,170 sf of office space capped by four residential floors, totaling 57 units in 76,793 sf (for an average size of about 1350 sf). Underneath will be a two story parking garage with 136 spaces, thus adding another 40,000 sq ft to the project total (about 140,000 sq ft). Pulp readers should remember that the Roberson Square project approved in February 2008 had more commercial/retail space (about 32,000 sf) but less residential space (only 18 units in about 33,000 sf for an average size of about 1800 sf).

Of course, an affordable housing component has been leveraged out of the developer for the yet another southern Orange tax-exempt organization, the Orange County Housing and Land Trust empire that continues to grow. Mr. Robert Dowling, head of OCHLT, having recently received a 25% salary increase in bad economic times, approved by the Boa and paid for by local taxpayers is not happy with the gift of five units.

The Boa reduced the originally proposed nine units (total of 6750 sf) to only five units, so long as the developer pays $100,000 to the OCHLT town fund for each of the four units not built. At 750 sf, Mr. Dowling considers the originally proposed affordable housing units too small in size, likely to attract young single people, not the true low-income residents Mr. Dowling wishes to attract. In Mr. Dowling’s words on young single people,”They're not bad people, but they're temporarily low income. And as a result this is transitional housing for them.” So four of the five units to be built will be upped to about 1000 sf each.

As with the Roberson Square project, The Butler ”virtual children” will play in the courtyard used by the ground floor businesses in lieu of real recreational facilities. Again, this project is designed to retail at a nominal $250 per sf.

Again as with Roberson Square, the Carrboro Developer Service Department (aka town planning staff) orchestrated a plan to change the “rules” for The Butler. According to the town planning staff, there’s no problem with The Butler being built (all almost 140,000 some sf) on the existing about .9 acre site without additional area logistical staging and construction parking. Supposedly, historic business district parking and traffic flow will not be adversely affected.

More importantly, the infamous town zoning PILOS (”payments in lieu of”, see were brought out in full force. Town staff recommended granting the developer PILOs for a reduction recreational facilities, as well as for the need for affordable housing from 9 units (comprising about 7000 sf) to five units comprising about (5000 sf). (See Pulp PILO Virtual Affordable Housing Debate.).

Ordinarily, existing zoning laws would require a project of this magnitude to have 149 parking spaces, and not the approved 136 parking spaces, a difference of 13 parking spaces. These missing spaces would require (even in the newly downsized parking space limits approved recently by the Boa) the developers to convert an additional 5100 sf of the about 140,000 sf total project developed area from what is now revenue producing area into parking. At a sales revenue value of $250 per sf, the Boa approval of reduced parking is worth about $1,275,000 to the developer.

Perhaps more interesting is the parking algorithm in existing zoning ordinances. The table below compares the physical attributes of Roberson Square versus The Butler. Even though The Butler has three times the number of residential units found in Roberson Square, parking spaces are barely doubled. Such is the genius of the Boa. Such is the “parking plan” of the Boa. (See Pulp Parking Values Story.) If the residents of The Butler don’t cocoon themselves in Carrboro without a car, then an additional 30 parking spaces should have been required, carving out from revenues an additional $2,947,500 of footage.

How much do the $400,000 PILO fees “cost” the developer? By paying these fees, the developer can free about 2000 sf into full revenues. That space will yield (at about $250 per square foot) $500,000. The developer gets more.

No word from the Carrboro Developer Service Department on who will pay for the public parking garage needed for yet another dense growth limited parking jewel.

PILOs are the social engineering tool de jour in Carrboro for attracting “the right kind of people”, i.e., those who agree with the Boa, and reducing the reality based population in Carrboro. But if you’re not a stenographer, then the nuts and bolts of PILOs portends fatter profits for developers… with ordinary citizens, aka financial mules, getting the screws.

After the Boa passes the The Butler CUP building permit, Alderman Gist is reported by the Chapel Hill News to say, ”What I'm sensing now is 'community as commodity'. People build community and then other people come in and profit from the community that others created and built.” However, one is touched by Alderman Gist's concern with protecting Carrboro residents with which she agrees, it must be balanced by her lack of interest in protecting the neighbors of intrusive developments such as Pacifica or Winmore. In those cases, her sense of concern was dominated by her not liking or agreeing with those financial mules who also built their communities in Carrboro.

No word from Mr. Dowling on the real “bad people”, those who can afford housing in Carrboro without his assistance.

Like the proverbial camel poking its nose ever deeper into the desert tent, a tax supported, local non-profit bureaucracy keeps pushing further into the public purse in order to fund affordable housing. The Orange Community Housing and Land Trust (OCHLT), through its 25% annual pay increase executive director, Mr. Robert Dowling, recently attended the Fall 2008 “Assembly of Government” meetings, aka the local turf battle and catfight for Orange Progressive politicians.

Pulp readers know that the affordable housing crisis is based upon the the declared belief that the inability of “lower income” people to live near median income residents creates an imbalanced society that hurts Orange County, not financially, but psychologically. For OPie purposes, someone making 80% of the median income is “lower income”. OPies do not take into consideration if that person's income is ascendant. For example, perhaps they are beginning their career path and will make more than median income during the term of their occupancy, or they are trustafarians living off trust incomes without really having to work, or they have made life choices temporarily reducing a two income family status to a one income family status.

Creating Your Publicly Funded Lifetime Job
After declaring a crisis loudly to the “stenographer pool” (aka the local media), crack, local, wannabe, tax exempt bureaucrats swing into action.

The first step in creating your lifetime job is to announce that government is not equipped to manage an affordable housing program.

The second step in in creating your lifetime job is to advocate in front of each local governance board for the adoption of a zoning requirement for developers to provide for a percentage of smaller size housing in a development, the smaller housing being equated to less expensive housing for lower income residents.

The third step in creating your lifetime job is to advocate for funding yet another tax exempt (read non-profit) non-governmental organization in southern Orange, in this case the OCHLT, to assist “lower income” (less than 80% of the median Orange County income) residents in finding housing.

The fourth step in creating your lifetime job is to get appointed to the OCHLT at a modest salary, with testimonials from local OPies.

The fifth step in creating your lifetime job is to advocate in front of the local governance boards for funding to support your bureaucracy’s operational costs.

The sixth step in creating your lifetime job is to advocate in front of the local governance boards for capital funds to buy housing and to rehabilitate into managed lower income housing, the right to own the property being retained ultimately by your bureaucracy.

The seventh step in creating your lifetime job is to advocate in front of the local governance boards for yet more funding for your bureaucracy to oversee developer-built affordable housing.

The eighth step in creating your lifetime job is to advocate in front of local governance boards for the adoption of a PILO (payment in lieu of) financial structure for developers. PILOs enable developers to give money to the town instead of building lower income housing mixed in with higher income housing. Effectively the raison de etre of an affordable housing crisis has evaporated (the need to mix socio-economic classes), leaving only the solution to a different crisis (the need to fund your lifetime job).

The ninth step in creating your lifetime job is to ask local governance boards to funnel PILO moneys to your bureaucracy to buy yet more bureaucratically controlled housing. (See Pulp Right to Shelter Story.)

There is no final step, as bureaucracy is never ending.

Flawed Program Bureaucratic Job Insurance
Even in the current depressed local housing market, there is one constant. Averaged over a long enough period of time, all maintained housing goes up in value. Apparently, OCHLT and its abetters (the local governance boards fo Orange County, Carrboro, and Chapel Hill) forgot to include this constant in their collective wisdom of funding the OCHLT housing empire. Four two bedroom, affordable housing units in Vineyard Square in Chapel Hill went up for sale in the Summer 2007. Under the terms of the OCHLT created program, homes that were bought by lower income residents for about $92,000 had increased in value to about $100,000 over several years. OCHLT can buy back the housing at the $100,000 price.

There’s only one problem, OCHLT can’t qualify lower income homebuyers at that $100,000 price. According to Mr. Dowling, by the time you figure in higher tax rates, home owners association dues and a stagnant median income standard, Mr. Dowling says, “many potential owners are priced out”.

Put simply, the OCHLT is in a financial mode of negative cash flow even with regards to selling its permanent stable of OCHLT owned housing. It can only sell the units it bought about five years ago at a loss of about 10% of capital because median income isn't increasing apace with housing costs.

Compounding a failed business model is the fact that OCHLT puts lower income residents into housing that they cannot afford to maintain. Only after having established an empire requiring his lifetime assistance has Mr. Dowling included the cost of maintenance by lower income homeowners into the model. He now estimates that over the next 25 years (taking him comfortably into retirement) OCHLT will need at least $1,500,000 in maintenance grants to OCHLT borrowed homeowners.

PILOS of Cash to the Rescue
No need to worry. Here’s where PILOs come to the rescue. Mr. Dowling wants local governance boards to fund the maintenance grants through PILOs, in yet another local, financially imbalanced, Ponzi scheme.

Chapel Hill Councilor and public micturator defender Mark Kleinschmidt says, “I think it speaks better of us when we find other ways of taking care of our affordable housing non-profits that don't take away from the ultimate goal of putting units on the ground.,” He’s also concerned that PILOS interfere with ”getting units on the ground, having a place for people to live.”

Showing continued trouble in adopting a “facts optional” approach to governance, Chapel Hill Councilor Matt Czajkowski counters Mr. Kleinschmidt’s visions by saying, ”My notion is, we've got a problem, we don't see any other source of funding and therefore we should try to fix the problem right now by accepting payment-in-lieu.” See the Herald Sun PILO Sory.

Failure Is Its Own Reward
No word from the Assembly of Government on the causal relationship between the failure to include maintenance costs in a funding program and the awarding of a 25% annual pay increase for such failure.

In a continuing series of incremental moves designed to shelter the end goal, the town of Carrboro edges closer to a de facto citizen’s “right to shelter” from their government. On 9 September 2008, the Boa adopted changing the town affordable housing policy to permit homeowners to seek emergency repair grants (not loans), from the town of Carrboro.

The first step in a right to shelter was the declaration of an affordable housing crisis. The Boa declared that the inability of “lower income” people to live near Carrboro median income residents was said to be creating an imbalanced society that hurt the town, not financially, but psychologically. For Boa purposes, someone making 80% of the median income is “lower income”, even if that person's income is ascendant, e.g., they are beginning their career path and will make more than medan income during the term of their occupancy, or they are trustafarians living off trust incomes without really having to work, or they have made life choices temporarily reducing a two income family status to a one income family status.

The second step in a right to shelter was the adoption of a zoning requirement (now 17%) for developers to provide for a percentage of smaller size housing in a development, the smaller housing being equated to less expensive housing for lower income residents.

The third step in a right to shelter was the funding of yet another tax exempt (read non-profit) non-governmental organization in southern Orange, the Orange Community Housing and Land Trust (OCHLT), to assist “lower income” (less than 80% of the median Orange County income) residents in finding housing.

The fourth step in a right to shelter was the funding of OCHLT to buy housing and to rehabilitate into managed lower income housing, the right to own the property being retained ultimately by OCHLT.

The fifth step in a right to shelter was the funding of OCHLT to oversee developer-built affordable housing.

The sixth step in a right to shelter was the adoption of a PILO (payment in lieu of) financial structure for developers whereby the developer could give money to the town instead of building lower income housing mixed in with higher income housing. Effectively the raison de etre of an affordable housing crisis had evaporated (the need to mix socio-economic classes), leaving only the solution to a different crisis (the need to create a right to municipally governed shelter).

The seventh step in a right to shelter was funneling of PILO moneys to OCHLT to buy yet more housing.

The current eighth step in a right to shelter is the granting of giveaways to lower income residents for housing repairs.

Under a cobbled together process that the Boa dare not have introduced in one fell swoop, government money funds an organization that can put people into housing they can’t afford to maintain, and then picks up the housing maintenance costs as well. As reported by the Daily Tar Heel, OCHLT executive director and 25% annual pay increase recipient, Robert Dowling, “What Carrboro is doing is recognizing that there is a need amongst low income people for funding to help make their homes habitable. With affordable housing, it’s not unusual for homes that are sold to lower-income people to fall into disrepair over time, because to maintain a home is expensive. It’s easier to get someone into a home … than it is to allow them to be successful in being a homeowner and maintaining the home.”

Under the adopted “process”, a resident simply asks the crack Carrboro Economic and Community Development department for a home maintenance grant, saying what the money will be used for and why they should get it. In the words of the ED head, Mr. James Harris, “We know about these situations but sometimes we just can’t do anything about it. All properties are priorities to somebody.”

Ultimately, the Boa will decide to whom to give money, apparently on a “case-by-are-they-my-voting-friends-case” basis, as there are no guidelines or objective criteria for determining who should get how much money.

No word on why the Boa didn’t offer low interest FEMA type loans for housing emergencies as opposed to outright giveaways that promote not maintaining one's home.

On 3 June 2008 the Boa voted unanimously to raise its property taxes by 5% for FY2008-09. Unreported by the local media, the budget also significantly increases town debt, and thus, future taxes. (See Pulp Carrboro Debt Story.) The approved budget will increase the tax rate to 68.63 cents per $100 of assessed valuation. The total expenses are $18,480,375.

Local affordable housing tax-exempt “non-profit” affordable housing organization (aka “Orange Community Housing and Land Trust” or OCHLT) is receiving an over 33% increase in funding from the Boa.

Even Carrboro town manager Steve Stewart wanted to cut that increase to only about 16%, complaining that municipal employees are getting a smaller raise than those in Chapelboro tax-exempt land. OCHLT Executive Director Robert Dowling advocated successfully for a 25% pay increase from $60,000 to $75,000, as opposed to the 2% increase for town employees. The Boa had no discussion on how the more affordable housing must is created that must be administered by local government through OCHLT grants, the more taxes will have to rise.

Anxious to show their financial acumen in an off economic year, the Boa also will spend $4800 on six waterless urinals in the town’s white elephant and former church, the Century Center. With projected water savings of about 5000 gallons per year, the BOA will save about $75 in water per year. On the other hand, they will spend about twice the normal capital cost and spend more than $75 a year on the maintenance necessary to keep waterless urinals from smelling like the Weaver Street lawn on a late Friday summer’s night. It's the thought that counts. Saving water for more dense development is gospel in the defrocked Century Center.

No word on what the justification was for a 50% increase in the Carrboro town vehicle tax.