GROWTH & DEVELOPMENT
By Adam Powell
Correspondent
CHAPEL HILL – On Nov. 19, the Chapel Hill Town Council unanimously approved an amended conditional zoning proposal for a segment of the proposed Hillmont residential project along Stancel Drive, adjacent to Barbee Chapel Hill and N.C. Highway 54.
“The modification that is requested is to the existing conditional zoning district,” explained Chapel Hill Planning Department staff member Anna Scott Myers at the Town Council’s November 12 session. “(The developer’s proposal is) to amend the affordable housing plan section of the ordinance.”
Hillmont, initially approved for construction in the fall of 2023 for up to 500 market-rate and affordable rental residential units, has faced a few financing challenges since that time.
Developer offers reduction in affordable units for $1-plus million payment
Northwood Ravin, the project’s developer, came up with a compromise that will allow them to secure the necessary funding for the project, while giving Chapel Hill leaders what they desire – more affordable housing units throughout town.
The amended zoning will allow for a specific block of the project – Block E, or 146 Stancell Drive – to include at least 20 affordable housing units.
Northwood Ravin proposed to offer the Town of Chapel Hill a $1.15 million contribution to the town’s affordable housing funding program, in exchange for modifying the minimum number of affordable housing units within Hillmont from 43, or 10% of the originally-approved allotment of housing units, to the figure of at least 20 units, or 23 fewer than originally approved.
According to town staff, a subsidy of $1.15 million is typical for a 48- to 50-unit Low Income Housing Tax Credit (LIHTC) project.
“When we saw the gap in funding that was needed at the town, we studied this and kind of crunched numbers and if we were to take 23 of the units, or let’s call it half of the current affordable number of 43, and convert that into a one-time voluntary donation or payment that we would make to the town, it would enable us to make a payment that I believe would enable, at least on the funding that was shown on the 2026 needs, to fill that gap (for the town),” explained Adam Golden, representing the Charlotte-based Northwood Ravin before Chapel Hill town leaders.
“Where it would help us significantly is it would help us secure the financing,” Golden added. “Because right now, we are, you know, this is a traditionally financed project, and traditional financing is, in essence, like when you’re buying a house. We have a certain amount of equity that we put in, and then there’s a loan. We are not using the more specialized financing that is used with LIHTC and tax-exempt bonds. That is a much more complicated lender. Those are different banks. That is not who we are financing this project with. And in this crazy environment to keep this as easy to understand as possible, we came up with this idea.”
While the reduction in approximately half the number of affordable units in Hillmont is not ideal for town leaders, the compromise did mean not only that the town could move forward with some of its other affordable housing goals through its affordable housing funding program, but it also means that Hillmont could finally get moving with vertical construction in 2026.
“I’m just thinking about specifically what came before us (previously), with two (affordable housing) projects that we weren’t able to fund, and those needs there. So I just want to elevate in terms of thinking about affordable housing and the spectrum of the needs that our partners have. I think these funds would help to stretch in that way as well,” said Town Council Member Paris Miller-Foushee, a strong advocate of local affordable housing.
Golden indicated that the town and the development team saw an opportunity for a win-win compromise with this project.
“I think it was September 10 when we saw the affordable housing funding program report for 2026,” explained Golden. “When we saw that, I guess there were four projects (for affordable housing) proposed (throughout Chapel Hill), and only the funding for two projects to go forward.”
“When we saw that, it actually coincided (with our construction efforts on the Hillmont project),” Golden continued. “We are in the process, as you know, we’ve been under construction with the site work at the Hillmont project for about seven months now. And are in the process, as we speak, of sourcing a loan to move forward on the vertical construction.”
“The financing environment today remains very challenging, and there’s still a lot of uncertainty, and this is a large project,” he added. “So when we saw the (town’s affordable housing) funding needs in September, and we looked at where we are with the project, we kind of had an idea that could be a win-win for both us and for the town.”
Project calls for 468 units, mixture of floor plans
The previous zoning approval, issued in November of 2023 for Hillmont, included an affordable housing stipulation requiring 10% of the market-rate units to be affordable.
“We have a 468-unit project. We have an approved zoning compliance permit, which translates to 43 units. So we have 43 units that are currently part of the affordable housing condition. Half of those units, 50% are at the 60% AMI (Area Median Income) level. Half of them are at the 80% AMI level.”
Block E, located within 146 Stancell Drive, includes the five largest buildings within the proposed project, assuming 375 of the 468 total units.
“The clubhouse, the majority of the units are on block E, and that’s where all of the affordable units would be located,” Golden explained. “And the unit mix would follow the unit mix of those. So there’d be one-bedroom, two-bedroom, and three-bedroom units available. We have 43 units in the current proposal. Again, half at 60% and half at 80% of the AMI.”
According to Scott Myers, a zoning compliance permit was issued in August of this year, requiring that 43 units within Hillmont be affordable. Still, a newly modified compliance permit will allow for a minimum of 20 units.
“The applicant already explained, but 50% of those units will be for households earning 60% AMI, and the other 50% for 80% AMI, and those numbers are not changed. The affordable housing plan specifically calls for the affordable units to be in that (E) block. Staff recommends that the modification is aligned with the complete community goals and comprehensive plan, and we recommend that council consider this modification.”
After debating the project at their Nov. 12 meeting, the Town Council voted unanimously in favor of the modified plan on Wednesday evening, November 19. Once Northwood Ravin secures financing for the project, upward construction should begin sometime in mid-to-late 2026.
Adam Powell has been a correspondent for The Local Reporter since 2023. A 2001 graduate of UNC-Chapel Hill, Powell has served as managing editor of multiple local publications, including the News of Orange County, the Mebane Enterprise, the Caswell Messenger, and the ACC Sports Journal. Powell has won more than 20 North Carolina Press Association Awards throughout his journalism career for Excellence in Education Reporting, Excellence in Sports Columns and Features, and Excellence in Video Production. He has also been recognized by the North Carolina School Public Relations Association (NCSPRA) for Excellence in Education Writing and for his newsletters representing Rockingham County Schools and the North Carolina Cyber Academy. The author of four books. Adam currently resides in Mebane with his wife Julie and children Colt and Jenna. This reporter can be reached at:Information@TheLocal Reporter.press
Do I understand correctly that the developer has already cut down all the trees but doesn’t haven’t funding to build? (And how is 10% of 460 only 43 units?)
I just don’t understand why the town council keeps on allowing developers to change their plans and reduce the number of affordable units. If the current financial times are tough, maybe wait a few years until times change. Then they can build what they planned. Or maybe build something other than overpriced rental units.