It must have been a rough weekend for our neighbors who continue to mangle basic economics and use convoluted logic to argue that we don’t need to build more housing in Chapel Hill.

Both the New York Times and Wall Street Journal released articles detailing the housing crisis affecting the nation as a whole, and most acutely places like the Triangle region that have a dynamic economy that continues to attract new residents.

Each article is worth a read, but below are some key takeaways as relates to Chapel Hill.

Whatever Happened to the Starter Home?

This New York Times article focuses on the decline in the construction of starter homes in America – i.e., relatively small and affordable homes that enable young middle-class families to grow and build wealth. Several factors have contributed to the decline:

This mix of good intentions (energy efficiency, tree preservation) and exclusionary ones (aesthetic mandates, minimum lot sizes) has pushed up the cost of building on top of the rising cost of land. Cities have also shifted more of the burden for funding public infrastructure like parks and sewer systems off taxpayers and onto homebuilders.

The result today is that a builder who can put up only one home on an expensive piece of land will construct a large, expensive one.

Sound familiar? In most of Chapel Hill, it is impossible to build anything other than single-family homes – an intentional and exclusionary policy choice that is baked into our land use management ordinance (and one that could easily be eliminated by Town Council if it chooses).

To build anything other than single-family homes in Chapel Hill, including relatively affordable townhomes and condos, developers must participate in a protracted costly development review process and try to accommodate the requests of various advisory boards and Council members for community benefits taxpayers want but don’t want to pay for, like parks, sidewalks, and dedicated affordable units. (No such demands are placed on developers of McMansions).

As the article suggests, under such a scheme for-profit developers have no incentive to build anything other than expensive single-family homes. Not only are starter homes difficult to build in Chapel Hill, I frankly would question the business acumen of anyone attempting to do so.

The U.S. Is Running Short of Land for Housing

A piece in the Wall Street Journal is similar to the New York Times article, but more tightly focused on rising land costs in the Sunbelt. For the latter half of the twentieth century, southern metro areas like the Triangle, Charlotte, and Atlanta remained affordable in spite of strong employment and population growth.

A seemingly endless supply of rural farmland was converted to sprawling but affordable subdivisions. If you could afford a car and were willing to endure a long commute to work, you could probably find a modest home to buy: drive until you can buy, the saying went.

In recent decades, our economy has shifted in ways that advantage proximity to urban centers, where workers in the knowledge economy swap ideas and build community over oat lattes and craft beers. Institutions like UNC fuel the growth of this economy.

Coupled with Chapel Hill’s resistance to building enough housing to keep pace with job growth, high-income workers increasingly compete for a limited number of homes convenient to major employers. As a result, cost for vacant land is increasing, with little relief in sight.

Most economists say municipalities need to relax zoning rules and other restrictions to bring down land inflation and build more housing. But these changes are often unpopular with homeowners, who benefit from rising land values and make up around 65% of U.S. households.

Adding more housing also often requires costly investments in roads and other infrastructure. People are still moving to Sunbelt cities, and zoning restrictions are unlikely to disappear soon. Remote work has given Americans more choice, but economists say most young professionals continue to flock to a small number of cities. Some think the Sunbelt could see the same kind of stubborn land inflation that has haunted New York and San Francisco for decades and made them among the country’s least-affordable cities.

Rents Drop for First Time in Two Years After Climbing to Records

Finally, a glimmer of hope is found in another Wall Street Journal article. According to several sources, rents in August declined by a small amount after increasing for two straight years. While the decreases are not enough to offset the recent increases, the is worth noting for one of the reasons it offers for the decrease: an increase in the supply of apartments.

It is not normally necessary to explain that when the supply of a good increases and demand remains constant, prices decrease. But opponents of apartments in Chapel Hill consistently argue that the laws of supply and demand do not apply to housing because… reasons. (My favorite being that greedy developers build luxury apartments that sit vacant because they only care about selling the building to others – others who presumably invest in unprofitable rental properties).

That housing economists and people who actually build housing for a living disagree is of no concern to the opponents.

Their arguments would be laughable if it wasn’t such an important and motivated voting block in Chapel Hill. And one whose leaders regularly and shamelessly peddle misinformation.

Fortunately, our Town Council is increasingly rejecting the housing opponents’ specious arguments – but the rancor and organizing around the future of the American Legion site suggests that the housing wars in Chapel Hill will be a long and costly slog.

Stephen Whitlow lives in Chapel Hill. Trained as an urban planner at DCRP, he works for a research, evaluation, and technical assistance firm and focuses on the areas of housing affordability, fair housing,...