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Thread: Cary Growth Slows

  1. #1
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    Default Cary Growth Slows

    This story ran on WRAL...



    Posted: Oct. 16, 2008

    Cary, N.C. — New development in Cary – where the number of new homes soared from 2005 to 2007 – is taking a direct hit from the economic decline.

    Last year, plans for more than 4,000 residential units were submitted. This year's monthly average of 131 home permits is much lower than the last two years. In 2007, the town issued 193 and in 2006, 164.

    "Right now, we're seeing a slowdown," Cary Mayor Harold Weinbrecht said. "That's OK. It allows us to do a lot of things, including catching up on our infrastructure."

    But some developers say all the blame shouldn't be put on the economy.

    "Certainly, the economy isn't helping anything, but what I consider to be exorbitant fees are just killing a lot of small builders and big builders," said Michael Dean Chadwick, who's been developing homes in Cary and the Triangle for the past 13 years.

    In July, the Town Council raised impact fees – what developers pay to help cover growth costs – by 75 percent.

    Compared with other areas in the Triangle, Chadwick says it is up to four times as much in Cary.

    "(Cary's fees) can be $15,000 to $20,000 in the building permit process before you ever stick a shovel in the ground," he said. "And that's a tremendous burden on a lot of builders, right now."

    Weinbrecht, however, said impact fees are playing a small part in the slowdown of development.

    "In the whole scheme of things, it's just a small percentage of the cost of development," Weinbrecht said. "I think the biggest indicators are the economy and the ability to borrow money."

    Fewer new homes would eventually reduce tax base revenues, but budget officials say it might not be felt until the next fiscal year.

    Commercial development is also slowing in Cary. Plans were submitted for 3.1 million square feet of non-residential space last year. This year, fewer than 1 million square feet were proposed.

    Weinbrecht says he does not expect the economic viability to negatively affect the town's operational budget.

    "I don't think we'll have to make major adjustments," he said. "The only adjustments would come if the economy remains unstable through January or February."

    Cary plans to sell approximately $35 million worth of bonds in Spring 2009 for its capital projects, such as a planned downtown street scape. Town officials say they don't anticipate problems selling them.


    I think this is deja vu all over again. In last fall's campaigns, we heard that Glen Lang crushed the real estate market in Cary during 2001-2002 by raising impact fees. The people making these accusations failed to mention that our whole country and real estate market were in a post-9/11 funk. Major RTP employers were laying off people by the thousands. That is what caused the slowdown.

    Fast forward to today. Unless our Town Council members have some pretty highly-placed friends in Fannie Mae and Freddie Mac, I don't think they can be credited with causing the housing bubble and sub-prime lending which led to the nationwide collapse of the housing market. After being increased, Cary's impact fees are in line with Apex, Holly Springs, Raleigh and Morrisville (there was a long thread on CP earlier covering this). Housing starts are down in those towns as well. We must also remember that a huge number of housing starts were permitted before any change in impact fees, and those homes were not started either.

    Fast forward again to three years from now. Some candidates will challenge for office, and they will credit this administration with singlehandedly crushing the housing industry, conveniently leaving out the fact that the whole nation is down and we're faring better than most.

    I'd comment further, but gotta get up early tomorrow to go vote some more.
    "Those who would give up essential liberty to obtain a little temporary safety deserve neither liberty nor safety" Benjamin Franklin

  2. #2
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    Default Re: Cary Growth Slows

    Joe --

    We all enjoy your thoughtful op-ed pieces in the Cary news. Perhaps you should write a new one about the infrastructural challenges we face in Cary today and impact fees.
    We occasionally stumble over the truth but most of us pick ourselves up and hurry off as if nothing had happened.

    Sir Winston Churchill

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    Default Re: Cary Growth Slows

    During the 2001-2 bust, I was on a trip San Jose, CA. and visited a friend of mine from Cary who was also on a trip to the left coast. He commented (with sarcasm so thick it could almost be seen) "That Glenn Lang--he screw up the economy so badly that he not only crushed the Cary real estate market, he managed to crush it all the way out here."
    Last edited by johnshaw; 10-24-2008 at 01:52 PM. Reason: correct an absolutely stupid and embarrassing typo.

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    Default Re: Cary Growth Slows

    Quote Originally Posted by JoeCiulla View Post
    This story ran on WRAL...



    Posted: Oct. 16, 2008

    Cary, N.C. — New development in Cary – where the number of new homes soared from 2005 to 2007 – is taking a direct hit from the economic decline.

    Last year, plans for more than 4,000 residential units were submitted. This year's monthly average of 131 home permits is much lower than the last two years. In 2007, the town issued 193 and in 2006, 164.

    "Right now, we're seeing a slowdown," Cary Mayor Harold Weinbrecht said. "That's OK. It allows us to do a lot of things, including catching up on our infrastructure."

    But some developers say all the blame shouldn't be put on the economy.

    "Certainly, the economy isn't helping anything, but what I consider to be exorbitant fees are just killing a lot of small builders and big builders," said Michael Dean Chadwick, who's been developing homes in Cary and the Triangle for the past 13 years.

    In July, the Town Council raised impact fees – what developers pay to help cover growth costs – by 75 percent.

    Compared with other areas in the Triangle, Chadwick says it is up to four times as much in Cary.

    "(Cary's fees) can be $15,000 to $20,000 in the building permit process before you ever stick a shovel in the ground," he said. "And that's a tremendous burden on a lot of builders, right now."

    Weinbrecht, however, said impact fees are playing a small part in the slowdown of development.

    "In the whole scheme of things, it's just a small percentage of the cost of development," Weinbrecht said. "I think the biggest indicators are the economy and the ability to borrow money."

    Fewer new homes would eventually reduce tax base revenues, but budget officials say it might not be felt until the next fiscal year.

    Commercial development is also slowing in Cary. Plans were submitted for 3.1 million square feet of non-residential space last year. This year, fewer than 1 million square feet were proposed.

    Weinbrecht says he does not expect the economic viability to negatively affect the town's operational budget.

    "I don't think we'll have to make major adjustments," he said. "The only adjustments would come if the economy remains unstable through January or February."

    Cary plans to sell approximately $35 million worth of bonds in Spring 2009 for its capital projects, such as a planned downtown street scape. Town officials say they don't anticipate problems selling them.


    I think this is deja vu all over again. In last fall's campaigns, we heard that Glen Lang crushed the real estate market in Cary during 2001-2002 by raising impact fees. The people making these accusations failed to mention that our whole country and real estate market were in a post-9/11 funk. Major RTP employers were laying off people by the thousands. That is what caused the slowdown.

    Fast forward to today. Unless our Town Council members have some pretty highly-placed friends in Fannie Mae and Freddie Mac, I don't think they can be credited with causing the housing bubble and sub-prime lending which led to the nationwide collapse of the housing market. After being increased, Cary's impact fees are in line with Apex, Holly Springs, Raleigh and Morrisville (there was a long thread on CP earlier covering this). Housing starts are down in those towns as well. We must also remember that a huge number of housing starts were permitted before any change in impact fees, and those homes were not started either.

    Fast forward again to three years from now. Some candidates will challenge for office, and they will credit this administration with singlehandedly crushing the housing industry, conveniently leaving out the fact that the whole nation is down and we're faring better than most.

    I'd comment further, but gotta get up early tomorrow to go vote some more.
    Agreed..sn

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    Default Re: Cary Growth Slows

    Wow, Joe, Stan and I agree. See finding common ground is possible.

    Perry

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    Cool Re: Cary Growth Slows

    I would argue that it was a combination of bad public policy (extra-high fees and cost of doing business), plus a weak economy, that slowed growth in Cary.

    When growth returns and businesses have a choice of where to expand or build, they will look first at how expensive it is to do business in each jurisdiction. Cary may be at a disadvantage b/c of it being one most expensive places to do business.

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    Default Re: Cary Growth Slows

    Quote Originally Posted by RCS View Post
    I would argue that it was a combination of bad public policy (extra-high fees and cost of doing business), plus a weak economy, that slowed growth in Cary.

    When growth returns and businesses have a choice of where to expand or build, they will look first at how expensive it is to do business in each jurisdiction. Cary may be at a disadvantage b/c of it being one most expensive places to do business.
    Cary fees are in line with surrounding communities, see the excellent thread that Don Frantz posted. What exactly is the extra-high "cost of doing business" you refer to? Do you mean the high standards Cary has for look and feel of new buildings?

    The overwhelming majority of remaining undeveloped land in Cary is zoned residential, so if we are at a "disadvantage" then that means less homes, less traffic, less runoff to Jordan Lake.... I'll take that disadvantage every day.
    "Those who would give up essential liberty to obtain a little temporary safety deserve neither liberty nor safety" Benjamin Franklin

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    Default Re: Cary Growth Slows

    Quote Originally Posted by RCS View Post
    I would argue that it was a combination of bad public policy (extra-high fees and cost of doing business), plus a weak economy, that slowed growth in Cary.

    When growth returns and businesses have a choice of where to expand or build, they will look first at how expensive it is to do business in each jurisdiction. Cary may be at a disadvantage b/c of it being one most expensive places to do business.
    I am not sure of what you mean by Cary being one of the most expensive places. Many of the "pro-growth" towns like Morrisville have seen projects come to a halt. Cary will be a good place to do business due to favorable demographics. I agree with Joe in that we can do without additional CVS, Dollar General type stores.
    We occasionally stumble over the truth but most of us pick ourselves up and hurry off as if nothing had happened.

    Sir Winston Churchill

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    Default Re: Cary Growth Slows

    Quote Originally Posted by RCS View Post
    I would argue that it was a combination of bad public policy (extra-high fees and cost of doing business), plus a weak economy, that slowed growth in Cary.

    When growth returns and businesses have a choice of where to expand or build, they will look first at how expensive it is to do business in each jurisdiction. Cary may be at a disadvantage b/c of it being one most expensive places to do business.
    So this would explain why Cary's growth slowed so much more than all other Wake/Triangle communities during this downturn.

    Oh, wait, it didn't.

    Cary will continue to be an attractive market.
    - Brent Miller

    "The job of a citizen is to keep his mouth open" -- Gunter Grass

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    Default Re: Cary Growth Slows

    Quote Originally Posted by RCS View Post
    I would argue that it was a combination of bad public policy (extra-high fees and cost of doing business), plus a weak economy, that slowed growth in Cary.

    When growth returns and businesses have a choice of where to expand or build, they will look first at how expensive it is to do business in each jurisdiction. Cary may be at a disadvantage b/c of it being one most expensive places to do business.
    If you go to the home page of Cary Politics... scroll down a bit.... you will find an article that Fortune magazine cited the Town of Cary as the 3rd fastest growing city/town in the nation. While that period of time was from July 2007 to July 2008, the point is still the Town of Cary was the 3rd fastest growing city... with a vast majority of it in District "A" and "C".

    Also, make no mistake that with the construction of the 540 toll road, NW, W and SW Cary will be ground zero for growth. In today's Cary News, the town is considering annexing 39 acres for 166 homes (4.25 units per acre). Location - Chatham County, next to Amberly.
    Matt Danielson

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    "Too often we… enjoy the comfort of opinion without the discomfort of thought." - John F. Kennedy

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