Competition for housing helps drive Chapel Hill rent up to highest in state

Chapel Hill rent prices are rising — in February, the town saw a 6 percent jump in rent, according to a recent report on rental markets around the country.

The town of Chapel Hill currently ranks as the most expensive rental market in the state. The rent increase is particularly alarming for students and blue collar workers in the area.

Gina Turner, property manager of Town House Apartments, said Town House’s income has doubled since 2010 due to rising rents.

“Rents have gone up significantly in keeping up with the market,” Turner said. “If you’re too low, people question why you are so cheap.”

Chapel Hill Mayor Pam Hemminger said about 50 percent of the student population of UNC lives off campus, which drives up housing prices close to campus.

Turner said the steep jump in rent is due to high demand for luxury housing options.

“Competition has driven rates up,” she said. “The properties going up are geared towards luxury.”

Hemminger said the town of Chapel Hill didn’t build multi-family homes or apartment complexes for almost 30 years, and is now suddenly allowing for the development of new apartment complexes.

“New construction costs a lot more and land prices are very steep,” Hemminger said. “The brand new ones can keep a very steep price because people like new.”

Turner said these luxury apartments don’t seem to be geared toward the student population because of the steep prices, nor toward families because of their location along Franklin Street.

“People with families are not gonna come here and pay that kinda rent with two kids and a dog, long term,” Turner said.

Hemminger said big growth for the Durham area has also made rent more expensive for everyone, not just Chapel Hill residents.

“It’s easier for developers to get investors’ interest when they’re building luxury versus when they are building something more affordable,” Hemminger said.

Many students have been attracted to Northside, a historically African-American neighborhood, because of its lower rent and location near campus. Northside has been experiencing a mass loss of home ownership due to an increase in demand for student rentals.

C.J. Adisa, a retired resident of Chapel Hill and house owner in Northside, said the neighborhood used to have families, but now it feels like a neighborhood split between families and students.

“We can’t actually blame the students,” Adisa said. “It’s a lack of housing for the students, but it’s taking away from having neighborhoods instead of bedroom communities.”

UNC sophomore Reilly Gallagher said she is planning on living in the Northside neighborhood next year because it was an affordable option closer to campus.

“I actually decided to move off campus because of how much it costs to live in the dorms,” Gallagher said.

Adisa said she is concerned that African-American families are no longer able to buy in the neighborhood.

“I’m concerned that Chapel Hill is not looking out for the people who are not upper-middle class people,” Adisa said. “Blue collar people deserve to be able to buy houses in the area.”

Hemminger said town staff have continued to look for sites for affordable housing and are planning to help purchase homes in the Northside neighborhood to provide relief for the community — a process called land banking.

Adisa said she wants to see housing for both students and families, but not one at the expense of the other.

“I’d like to see neighborhoods remain neighborhoods where people interact as opposed to becoming bedroom communities for students,” Adisa said.

Hemminger said the town of Chapel Hill hired more people to work in the affordable housing department at town hall to start planning to increase affordable housing.

“We’ve been assessing and trying to figure out a plan,” Hemminger said. “First you have to figure out where you are before you can figure out where you’re going.”

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