Chapel Hill Town Council sees fewer proposed developments, meetings to start year

So far this year, the Chapel Hill Town Council has only held three regular meetings. Multiple business meetings have been changed to work sessions, and the council has not heard any new development project proposals since the start of 2024.

Meetings have largely focused on ongoing projects such as funding for the Rosemary Street Parking Deck and the North-South Bus Rapid Transit project.

Council member Theodore Nollert said the lack of new development proposals is likely due to high interest rates. 

He said, right now, projects will likely not yield the returns that investors are looking for. Nollert said some aspects of the Town’s rules make the development procedure sightly more expensive, compared to other areas.

But, he said a slowing rate of housing development can lead to a higher demand, which drives up rent and sale prices in the community.

Ernie Brown, the founder of EB Capital Partners, is currently leading the development of 30–40 townhomes and 36–50 apartments on Old Chapel Hill Road. He said developers often do not own the sites they are looking at for certain projects, and a long approval process can complicate development.

“We do have a situation of a little bit of a disconnect of sellers not fully understanding the time and financial commitment that it takes, not only putting a site under contract, but also going through the full process of getting titled so that your project could be viable,” he said.

The proposal process has become less convoluted recently, which has been helpful for developers. Now, Brown said, developers submit an early-stage plan to Town staff and then create a presentation for both the Town's planning commission and town council.

Nollert said the Town currently has a reputation of pushing back on development and making approval processes long and uncertain.

To encourage more high-quality projects, the council is trying to be more proactive in explaining what projects they want by creating relevant designs and broadcasting them to developers, Nollert said.

“The clearer our messages and signals, the more types of builders will be willing to build here, and the more likely they will be to build here,” he said.

Brown said this guidance has been beneficial, and that the Town’s rewrite of its Land Use Management Ordinance is an important move in the right direction.

The Town's current LUMO was adopted in 2003 to outline regulations governing development, including the height of builds, stormwater infrastructure and street designs. Minor updates have been approved by the council over the years, but it has not been comprehensively updated for nearly 20 years.

Town Manager Chris Blue said the Town receives feedback about their development process being difficult, particularly for those unfamiliar with it. He said the Town hopes the LUMO rewrite will make the process smoother for developers.

“It needs to be simplified,” he said. "That doesn't necessarily mean shortened. Doesn't necessarily mean that things will be easier for developers, but what it means is it can be more predictable and intuitive.”

Blue also said this rewrite will help to fulfill the goals of the Town’s Complete Communities Strategy. The plan includes creating more diverse housing, increasing access to public transit, developing more green spaces and creating more employment opportunities in the area.

Blue said the Town hopes to have a draft of the new LUMO completed by the end of the summer and approved by the council by the end of the year.

“The town council is working to ensure that when it grows, it grows in high-quality ways,” Nollert said.

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