The Missing Middle

Barry Bialik [0:00] So there's one word. It's called fear. It's what the neighbors are afraid of what might go in next to them. It's the fear of city council that if they make a change that people don't like, that they're not gonna get reelected.

Rodrigo Afanador [0:15] Welcome to AVLmeetup. Really excited to have our... This is gonna be our third annual meeting on affordable housing. Since Zach and I started this. We did everything August. It was gonna be a panel conversation on just getting into affordable housing. So here's our roadmap of how we're gonna get there. Got a couple of minutes of housekeeping that we're gonna go over. We got a get up and move networking activity we're gonna work through. Then Zack's gonna come up and give a quick talk on Zack Enomics. He's gonna help us set the stage for a really good table conversation that's gonna prime us for the panel on affordable housing specifically, the missing middle, zoning laws, et cetera.

And then we're gonna wrap it up, like always, with an audience Q and A. If you're doing the math, all of these things add up to 7:30, and so our commitment or our goal is to get you out of here at 7:30, we just need one thing from everybody in the audience is, when somebody starts talking on the stage, go ahead and give us your attention and we'll keep on rolling, we don't have to do any awkward pauses while we wait for things to settle down. All right. So, who's AVI meter? Our goal at AVLmeetup is to bring together the movers and sakers in the actual real estate world. If you're curious about what a mover and shaker is, you can just kind of look around the room.

If you're here, you qualify as a mover and shake it, just somebody who's out in the community, doing business and connecting with people. So thank you all so much for being here tonight. My name's Rodrigo, and co founded this with Zach, and you'll hear from him in a little bit. So, my night jive, or my night job is being coast here at AVLmeetup. But day job is run a property management company called Vesta Property Management. And that leads us to the net profit philosophy. So, at AVLmeetup, we believe in three different things here, kind of as our core tenants, it's the networking, education, and transaction. So, the networking piece is relatively easy.

Everybody's been doing that for the last 20 to 30 minutes. Show of hands, though. How many realtors do we have in the room? Keep your hands up if you have multiple hats, right? And the investor, any lenders, any service providers, couple, and then the last category we call the N reps, non real estate person. So just, you're interested in the topic, you might not be in real estate directly. So you got how many, two, three, thank you guys so much for being here. So, as you look around, you guys had some volunteers, there's sound, there's a lot of moving pieces that we use to bring these events together.

If you're interested in volunteering, please email Ray Ray, volunteer at AVLmeetup.com, or if you look in the back, she's raising her hand, and you guys can connect with her in person, and be like, Hey, I'm interested in volunteering. If, for whatever reason, you're too shy to talk to Ray Ray, you can choose to volunteer online, we have an application. So once you RSVP for an event, you find the event in the upcoming events, and you'll see, you click the box, you get an option to volunteer, we got a couple of different things you can choose to opt into as far as how to volunteer, and then we will look forward to working with you. The education front.

The education front is the panel conversations. Last year, we did the net profit summit, earlier this summer, we did a two hour lunch and learn with Mary Hart. That's the education piece of it. If you guys look down here at the bottom right hand side. or at my right, you'll see we've done about 4,349 hours of education in networking over the last three years, and the way we calculate that time is from all of the RSVPs. So when you sign in, then we calculate, you know, one sign in is be two hours for tonight. So we've had about 1,500 plus sign ins, and 79 different speakers over the last three years.

And that's just a, you know, testament, a commitment for everybody who keeps showing up, so once again, thank you for being here. All right, transactions. Well, everybody's here for that, right? So if we did the net profit philosophy, we call it that, because focusing on your growth is just gross, right? And so how do you do transactions? You look around, you do the networking, and that's how you start working with people. So, who here has done a deal with somebody inside of AVLmeetup? Show of hands. So I don't know what it is, maybe 30 ish percent of the room, maybe a little bit more.

And on that note, you know, as far as working together, the topic of affordable housing has a lot of moving pieces. There's a lot of strong opinions when it comes to this, and so we want to just remind everybody in kind of setting the stage a little bit. If you guys remember the sign in, if you look on the right hand side here, when you're looking at the screen, there's about 30 to maybe 40% of the people who, when they signed in, said that they didn't think they could be part of the solution for affordable housing.

Hopefully, by the time you guys leave tonight, anybody who's checked in and said that no, they couldn't be part of the solution, you'll hear enough compelling evidence to understand why you can be part of the solution. In February, we had a topic, and it was similar by accident, not by design to what we're talking about today, but it was, we'd be building buildings. And Micro Romero was on the panel, and he had a soapbox moment, I just wanted to shine some more light on. And he basically challenged that crowd, and he said, Guys, we have a decision to make about what type of Asheville we want to have.

Ten years from now, the affordability of Asheville is gonna be contingent on the rules and the zonings and the regulations that get voted in today. And so, there's a choice to be made, whether it's gonna be an affluent city with everybody living on the outside, or if we have the right infrastructure and the right zoning and the right rules and regulations that allow for more development, then we can have a Asheville that includes everybody who wants to be here. So just something to think about and consider. And because this is a topic that has a lot of different opinions. Here's our five minutes of networking.

Please stand up and sit next to somebody you don't know, or you haven't talked to in a long time. So if you're sitting in your group, got your clique, you know everybody, and you feel really comfortable at the table, this is an opportunity to feel a little bit uncomfortable as we delve into a different topic, all right? Five minutes and we'll come back, you guys. We had a sneaking suspicion. A sneaking suspicion that people may not move. So we had a question for you. Is anyone sitting next to someone that they previously did not know? Yeah, I don't know. I'll believe you. We're going off the honor system. But, uh... Okay, fair, fair. Sorry, I was scowling at people.

All right, so if you guys can hear me in the front, and you're watching, if we could just get a round of applause for the people in the back who haven't come back yet. All right. Awesome. Awesome. Cool. So, my name's Zacharies. I run this thing called the Ruiz Report. It's been going for 53 months now. Our mission is twofold, right? So, basically, we make these data reports, and we try to make sure that you are the local economist of choice by explaining them in a way that you can explain them to other people. But we're not gonna do that this month. We're gonna do something a little bit different.

So if you want to get the latest report, RuizReport.com, hit latest at the top, pick your favorite county, and there it is, all right? So you're gonna have to get your market data on the site this month. Because this month, we're gonna do Zach's Economics 101, part three, but round two. So we've kind of covered this. We covered this in February is about supply and demand, and we're gonna go over it just a little bit differently this time. with a little bit more context. So buckle up, right? It's gonna be grass. There's gonna be numbers. It is gonna be multiplying. It is gonna be fun, all right? I'm gonna walk you through it. Everything's gonna be great. So let's talk about supply and demand.

That's kind of the topic for tonight that's leading into our panel discussion. And we're gonna start with demand. So as we all remember from our economics class, this is our demand line. I like to remember it, my demand goes down, right? So the interpretation of this is that the price consumers are willing to pay decreases, right? As the quantity of houses in our case, increases. Right? This is why the demand curve slopes down, so we'll just look at it, right? So when you got 50 units, you find your curve, you find that the price is 700. Add more units, 125, find your curve, find that the price is $550. You will notice that $550 is less than $700. And then, finally, $175, $450, right?

So, conceptually, that's what demand does, demand down. Now, let's add in supply. The way I remember this, is supply to the sky. All right, so there's your demand graph. And the reason that this chart is important, The reason that the supply and demand chart is important, is because it illustrates the idea of an equilibrium point. And that, that is a big focus of what we're talking. about tonight. So in our graph here, the equilibrium point is when the supply and demand lines intersect. Right? And that tells us some special stuff. It tells us the equilibrium price and the equilibrium quantity.

And I'll throw them up there, if you'd like to read, but it's basically like, Hey, when supply meets demand, this is how much we'll pay for it, and this is how many, you should make of it. That's the gist of it. That's basically what we're trying to say here. All right? So far it's so good? Everyone's cool. We're tracking? All right. So, what happens when demand exceeds supply? So let's go here. So we've got 50 quantity, 50 supply, which you'll notice is less than that equilibrium. So we climb up, we find our demand line, and we get to 700, right? So what that's telling us is that the price is 700, when there are only 50 units.

Now, let's do that with the equilibrium, because our equilibrium tells us that if we were to hit this 120, we'd get 560 as a price. That's all that says when you go over there. All right? So you put them together, and what do you get? Anyone in the audience. What does this mean? What is the area under the curve? What is that telling us?

Unknown [10:01] Pardon?

Rodrigo Afanador [10:02] Things are too expensive. That is exactly right. Higher prices due to limited supply. Okay? So the price that consumers are willing to pay increases if supply is too low. Has anyone tried to rent or buy a house lately? That may have something to do with it. Right? So this is what's happening across the United States. Everywhere. We are in a housing glass. There are not enough homes for the people that we have. So I will boldly say that Asheville, we're on this side of the graph. We're on the undersupplied side. There's a whole talk about oversupply, but we're stuck in under supply. So the one slide we're gonna talk about from the Ruiz Report is home prices. So, there are two lines here.

There's red and green. The red line is the average price. Across all homes that close, residential homes that close in July in Buncombe County. If you added up all the clothes price, divided by how many there were, you'd get $660,000 for July. That was the average price of a home in Buncombe. The medium price is where you can take those same homes that close, but you line them up from the least expensive to the most expensive. That middle number, the median, that's $485. So half full, half empty, your choice, right? But I would say that that means 50% of all the homes in Buncombe County are at least $485,000. All right? So, why do we care about this?

We're gonna start adding some numbers here. We gonna keep a lot together. The median home price in Bungumbe County 45. So, let's go to some government data. If you were to hit North Carolina, Buncomb County, we find that the median family income is $90,310. All right? It's a medium family income, Buncombe County, $90,310. Keep on going. Let's assume there's an FHA loan with 3.5% down. Our price was 45. Take out the 3.5, you're left with $468, property taxes, blah, blah, blah. Right? So you got a monthly payment of 32, 33. Let's keep this in mind. I'm going to bring it back. Don't worry. The FHA recommended limit for a DTI, your debt to income ratio, is 43%.

So if we take 43% of your before tax income, that's a fun way to calculate things. Uh, 90,000 divided by 12, right? You get 3,236 numbers. This is an important number. So farn't so good? Everyone gets it, right? All right, so, we got a monthly payment of $3,233 for our median home. 43% of income before taxes is $3,236. And that leaves us $3. That leaves us $3 to pay everything. What might that $3 include you'd ask? Well, it doesn't include the mortgage or the real estate taxes or homeowners. We already included that, right? But maybe you have in a car. Maybe you have to drive, right? Maybe you have student loans, maybe you have a credit card, maybe.

Personal loans, child support, alimony, coast, anything else. Kind of, right? That's not true. Talk to your lenders. But a lot of things that you can't live without are included in that $3 and $3, if I were to make a bet, probably not enough money to cover these bills. Right? But wait, there's more, right? So no one ever sees their pre tax income. That is not real. So if we go to North Carolina, you're married, 'cause this is family income, right, withholdings, et cetera, your actual take home is 664 as a family, right? And now let's do that. That's 53%. So no longer, like, in real life. They want 43%, you're at 53% in real life, 'cause let's talk about the net profit, the net money you get.

Right? So, uh, let's put that another way, and here's a fun statement for the night. The median family income cannot support the median home price in Buncombe County.

Unknown [13:37] All right?

Rodrigo Afanador [13:39] So, I did the math, can't afford the cat. That's it, right? Add some levity, add some levity to this situation. Now, this is fun, right? We're not talking politics here, but this is the median family income. I tried. I tried, all right? Look, so, apparently, 38% of people in Asheville are from the census state and everything are considered married. I have no clue what they mean by family income. I looked into it. It's not household income. I don't know how it's defined, right? But the point is, with so many people not being parts of a family in today's world, I highly doubt the median income of any one is 90 right now, right? Living here with the jobs that are here. Right?

So, well, there's one more graph, right? We got a couple, one more graph. So how do we lower prices, all right? We can shift the supply curve, which is important. It's not going across it. It's shifting it. Right? So isn't this fun? You just take the craft, you just move it, right? And that's it. Lower the prices. So, where the supply curve used to be, our price is up there. When we shift it to the right somehow. It's lower. Done, all right? Vote for me. Over. So we reduce the price, and I know what you're thinking. How do we do this? So shifting, actually, involves some special moves here. So we could change the production costs. If things were cheaper, then you could build more of them.

That's not just normal stuff going on, right? But I can't actually do that. I highly doubt you can, either. So let's cross that one off. Technological advancements. For example, when they were building homes previously, and they didn't have drywall, or they didn't have plywood, or they didn't have power tools. When they had those things, they could build more than they could before. That was an actual technological advancement that shifted the curve. Probably, I probably can't do that. Economic conditions. I don't know if anyone watches the news, but the economic conditions are, uh, interesting right now, and they probably will be for the next couple months. Let's cross that one off the list.

Land availability. Maybe you've noticed there are mountains around here, and so we will not be getting more land. Right? So let's cross that one off the list. Government policies and regulations. Oh, man. You guys came to the right meetup tonight. 'Cause that's what we're gonna talk about. All right? We're hitting government policies and regulations tonight. Zoning laws, all right? Restrictions on land use can limit wear and what type of housing can be built, affecting supply. And we just saw how that affects prices, right? Loosening these restrictions can have the opposite effect. Building codes.

More stringent building codes increases construction costs, while simplification and relaxation could boost supplies. Tax incentives, right? For the developers to build in certain areas, for certain types of housing, let's call it multi unit housing. That could increase supply, too, right? Specifically for tonight's discussion. We can't get more land in Western North Carolina, but we can use the land we have more effectively. We can. We can. All right? So here, I'm gonna do my best here, but we have vanilla coming up. He's going to explain it much better. So there's flag lots, ADUs, and backyard lots. As of right now, we've already passed this. flag lot and an ADU.

So an accessory dwelling unit, that's what ADU is. Flag lot is, you have your existing lot, you break it off a little bit, you have another lot behind it, kind of sort of, right? We're going to get into that. Who has benefited from a flag lot or an accessory deli? Buy one, sell one, rent one, own one. There should be more hands, right? We need more hands. We need more people doing this. Increase supply. Good for you, good for me. Right? But then there's the backyard lot. Now, the main distinction, I'm gonna do my best here, is that on a flag lot at the front there, you've got road frontage, that lot has to own in a fee simple term, right? Like, part of the road, frontage, right?

The backyard lot, you can just give them an easement. And as long as they can get there, then you're good. We'll have a better explanation, I'm sure. Right? This one hasn't passed yet. Very important. If you look at a lot of the lots, there'd be called, like, locked in. Like, you can't just get to the road. The flag lot's not an option. This kind of solves that. Right? So backyard lots have passed planning and zoning commission. Yay. However, the city council still needs to review, hold public hearings, maybe, I wasn't sure, and adopt, and then or deny, right? But, like, hopefully not deny, right? They still need to adopt that one. So here's a little graphical representation.

This is from the... You'll see my head is covering the consulting group that put this together. Basically, what it is in the same land usage, more or less, where you could have three houses, you could do eight housing units. So that's shifting the curve. That's actually doing more with what you currently have. We got to get there, right? We haven't even mentioned the local economy. All right? Housing is inextricably linked to the local economy. This is a picture of Adam Smith's invisible hand. All right? So outside of zoning and policy, affordability is determined by strong businesses paying strong wages, right?

So strong businesses pay above average wages, which allows their employees to support other businesses, tip your bartenders, buy drinks here tonight. Thank you. But assuming their paycheck isn't all going towards living expenses. And you see how that circle keeps going? Right? So, the economy needs the housing, the housing needs the economy, so on and so forth. We're all in this together. We can make a difference. Right? But that's another meetup. So I will land this plane. That's what that giff's about. We're coming to the enter. All right, so what can you do? We can vote people in who will make a difference. Vadilla gave me a great line on the phone. Simple question.

If you're asking someone and choosing to vote on them or not. Do you believe in creating more housing supply? People will answer no. You need to know about that, all right? You could participate in local government yourself. You could be motivated after this talk and be like, I'm gonna be the change I want to see. Right? Or this is what I like. Hopefully these people are in this room, right? You can build more, missing middle housing. I used to just have houses, but, like, now it's three words. So build more missing middle houses, right? And that's me getting off my soapbox. So, to recap. Supply and demand continues to prop up prices. How do you know this?

Because all you have to do is go, Look, if the interest rates are still higher, and the prices are still higher, and they're still buying them, that's supply and demand, telling you that the demand exceeds the supply, that people want to live here, and that's just what it costs. Right? More supply? That's more better. That's how I like to say it. And then you can make a difference, all right? So, we're gonna give you 10 minutes, and you're gonna come back as respectfully as you did last time. And here's the table question to talk amongst yourselves, right? These total strangers that you're now sitting next to.

Uh, do you think that we can add density while protecting what makes Asheville, Asheville? Because, obviously, there's a lot of resistance to this, right? Everyone's heard of, like, nimbies not in my backyards, there's a lot of resistance of this. And we have to overcome that resistance in order to achieve our goal here. So that's the question. Do you think it can happen? See you in 10 minutes. So we're gonna... We're recording this for the live studio audience at home. So we're just gonna keep rolling. Maybe we'll try the applause trick again. There you go. Yeah, if we get a round of applause for... our panelists. There you go. Thank you.

All right, so kind of, by way of introduction, our first question will allow the speakers to kind of introduce themselves, you know, like that? So we'll just kick it off right now. So each of you has taken a unique path in addressing affordable housing in Asheville. Can you walk us through your journey and explain what motivated you to choose your specific approach? Kelly will start with you. What motivated you to choose your specific approach to tackling the issue of housing affordability?

Speaker 3 [20:56] It was actually very personal. Perfect. So, our friend who I actually met in my real estate class, Jarius, Jarius Smith, was in some type of housing, and I thought, Oh, my gosh, that's so expensive. That's terrible. You should rent my little basement apartment at my rental house up here. I'll rent it to you. It's in Montfort. It's a basement studio apartment. I'll rent it to you for $500 a month. And I love him. So now he's family. He's had a kid. I'm the adopted grandma, and they wanted to move upstairs, and my husband said, Well, we should really get Jay into home ownership. I said, Okay, let's go. Police. I said, Greg, you're gonna have to give him a raise. That didn't go over well.

So for a whole year, we were looking, looking, looking. That's when I got into Korea, and I started looking for off market properties. No luck, no luck. And so, it was very personal, and then I was writing a class for continuing education, and really started to do a deep dive on, on, uh, supply, demand, zoning, so on and so forth. So that's how I got into it. Beautiful.

Rodrigo Afanador [22:08] And we'll expand on that, isn't it? Sorry. Quick. How long ago was that, Kelly?

Speaker 3 [22:13] Uh, 18 months? So we did move Jay upstairs after not being able to find him a house. Because... Beautiful. If he were to move, he'd have to go to Marion or Marshall, and I'd never see that baby, and that is intolerable.

Unknown [22:29] Very.

Barry Bialik [22:31] Hey, there. So, my name is Barry, and I grew up in affordable housing. So, I grew up in the largest subsidized affordable housing complex in New York City. It's called Sterrett City. So I went to nine different schools in eight years. And then once I, um, had my, like, once I was old enough and bought my own home, I was able to actually have housing stability, and the housing stability is kind of what brought me to where I am in life. So, kind of much of what I do is my give back of, like, having housing has been able to create, like, the stability in my life. And now what I do is work so hard to be able to give back that feeling to others, 'cause I know what it feels like to not have it.

Um, and I come to it from, you know, I'm a builder, I'm a realtor, um, and then, y'all, who know me, I own the thirsty monk. So so much of what I come to is his balance that I know how much my thirsty monk employees make, and I know how much it costs for me to build a house, and everything I do is to work in that balance, to make sure that thirsty monk level employees can afford to live in our city. So that's where I come from.

Rodrigo Afanador [23:44] Round of applause for his round of applause.

Vaidila Satvika [23:51] Hi, everybody, my name is Vadilla. Um, I, uh... Well, I went to graduate school in New York City. at NYU, and got a degree in urban planning, and so I feel like I just sort of fell into this. I worked in New York City for 10 years in development, on a city level, but doing more transportation planning. We had this really cool program, not related to housing, but I'll tell you about it for a second, where we took back underutilized streets and redesigned them to make pedestrian public spaces, to make mini parks throughout New York City, so it was really cool. And that was right at the crash, 2008. And so I was there for a few years more. And then my wife and I decided to get out of Dodge.

It was right after Hurricane Sandy. It was a mess in where I was working in Lower Manhattan. And we kind of found different places and decided to land in Asheville, and one thing or another eventually led me to the city of Asheville, and I've been focused primarily in long range planning kind of regulations. So if you have any questions about zoning or regulations, and you want to understand something, feel free to email me or call me or let me know.

Rodrigo Afanador [25:08] Awesome. Thank you guys so much for that. Badilla, we'll start with you, actually, setting the stages or talk about zoning and regulations. Do you remember, or do you recall it was, like, the first moment that you started to see the correlation between housing affordability and zoning regulations? where you're like, Oh wow, like this is something that we can work on here?

Vaidila Satvika [25:27] Not so much the, um, affordability, but when I was right after I was hired here, I saw there staff pointing me to the code, and they're like, Can you do something about this? And I looked around and just saw a lot of problems in the code, and, you know, Barry's been looking at the stuff for many more years than that, and we still have a lot of problems. It's not rocket science. You know, the way that city codes work, and really, most cities are the same. We've all inherited regulations that were developed in the '50s, '60s, and they kind of just copied and pasted in lots of different cities.

And it takes a lot of courage to change something that's been on the books, because people get the sense that, well, it's been there for a long time, so it's important, right? Or the people, 30 years ago, knew what they were doing, right? And that's not the case. And that's the world we live in. And so I think the first thing that I found was, I was tasked with updating accessory dwelling unit regulations. So we made some changes to make them more flexible, and we're currently working on it, to make them even more flexible. The planning and zoning commission recently adopted changes to allow for ADUs to be 1,000 square feet. So that's something that's coming.

It hasn't been approved by council, but, um, fingers crossed, that the political, uh, process can make it happen and allow it to happen in the very near future.

Rodrigo Afanador [26:58] And just to chime in on that, please correct me if I'm wrong. Currently, it's 70% of the primary dwelling, right? Right. So that's a big deal. If you already own a small home, we'll get some questions at the end there. So if you already own a small home, then your ADU is gonna be even smaller, which isn't exactly marketable. Right.

Vaidila Satvika [27:14] I was talking to somebody today. Their primary home on the front is 700 square feet, so they're only allowed 70% of that, so they can build a maximum of 500 square feet in the back, right? So what's coming, the thousand square feet, is potentially double, or a lot more than most of what's currently allowed.

Rodrigo Afanador [27:32] How about you, Barry? you kind of ran into this the first time you tried to be like, I'm gonna build something. Yeah.

Barry Bialik [27:38] So the first house, one of the first houses I built in Astral is across from where New Belgium is now before New Belgium was there. It was a lot that, on Craven Street, that we found for a client for $17,000. I built a house for $68,000. The house is still there. It's that green one across from New Belgium. So the total, the total, you know, package is under $100,000. And I got a little attention for that, and so mountain housing reached out to me and said, Hey, you know, like, we have some land, we want to find some land, and maybe do a project with you. So we identified some land, mountain housing, bought it. And as we took it through city steps, We realized, Well, wait a minute.

This rule says that no piece of this land can be more than 15% in grade. Like, wait a minute, we're in Asheville. Everything's like this. So then deeping, you know, going deeper into it, realizing that the code was lifted from Raleigh. And it made me think, like, Wow, we're just lifting land use, like, legislation from other places without adapting it to hear. So that was my first piece of realizing, like, how land use really changes price. So we changed the rule. I applied to actually change the UDO. It changed. It was called the cottage development ordinance, which is what we're applying to change again. But it actually wiped away some of the rules that don't make sense for our area.

So that's how that was my first, like, experience with that. Awesome. Cool. How about you, Kelly?

Unknown [29:08] No on button.

Speaker 3 [29:10] I might be coming at this from a little bit of a different perspective. You want to hear? Are we talking about, like, our experiences with zoning?

Rodrigo Afanador [29:19] I think maybe the first time you just realized the impact that zoning has, um, when it comes to housing affordability, for, I mean, obviously, you've been teaching us for a long time, so... you're coming from a different perspective, and...

Speaker 3 [29:34] Okay. So, yeah, totally different perspective. So I built a course called crunched zoning in the housing crisis that's built off of another, um, course on fair housing or unfair housing. And that's when I first became aware of a term called exclusionary zoning, and I had never heard of that before, and I didn't know what it meant. So when I get curious, I go deep. I go deep. So I went all the way back. I was like, well, zoning, we kind of take it for granted, like, it's always been with us, but is that really true? Has it really always been with us? And if it hasn't always been with us? When did it start? How did it go?

And I found the origins of zoning and land use controls and the origins of urban planning in 1898, so on and so forth. So, what I discovered, unfortunately, is that zoning at its very root, if you go all the way back, is exclusionary, typically at that time, based on race, national origin, and religion. And moving forward, those pieces. Mm. I mean, I guess you have to make up your own mind about have those pieces stuck, have those ideas stuck, you know, they've had staying power, about keeping people separated, either by race, which you can't do anymore, or now, by socioeconomic classes, where it really is.

Rodrigo Afanador [30:57] Awesome. So, I'm gonna touch on the last question, and tying the new question all at once. All right, so here's the new question. In your view, is the affordability crisis in Asheville primarily due to a lack of high paying jobs, or are there other underlying factors? So how I'm gonna tie into this is, I feel like I know a little bit about what's going on, and it wasn't long ago that I figured out that I'm currently building a duplex. right now. And it was during the decision to build the duplex where I learned that I can only have one cutaway for two parking spots. That's not ideal, right? Generally, more than two people live in a duplex. How do you solve this, right?

So you've got to have all sorts of tricky, totally not normal ways. We had previous panelists talking about building sidewalks to nowhere for tens of thousands of dollars that they obviously have to eat and then pass on to the consumer. Right? So that's kind of like, I started learning about this for a bunch of reasons, but recently, very personally. But so, um, I guess we'll go backwards then, so starting Kelly, and ending in Fidilla, do you think it's just, right? The lack of high paying jobs. So going back to New York, when you make New York salaries, you can afford New York rent, and generally, you're good with your four roommates. But, um, uh, right?

So, like, is it high paying jobs, or are there more to it, like, kind of this zoning and law that make it almost impossible to build this affordable housing? Not to lead the question, but...

Speaker 3 [32:16] From the research I've done, it is such a complex topic that I always open up a class saying, If it were easy to fix, it would have been fixed by now. So all the factors that you named, certainly, are playing a role in what's happening currently. And then you look at, what are they calling it now, a rate lock or locked rate, some such thing, where you've got people who were able to get that two, 3% home loan, and they're not gonna let go of that and trade up for 7%. That's not happening.

So you've got, normally, when people are going to retire or scale back the baby boomer generation, of which we've got 70 million of them right now across the country, which would make room for the millennials to move up. We've got 80 million millennials currently, but we're all just kind of stuck in this bottleneck until something gives.

Barry Bialik [33:15] Um, so... Let's see. No. So... So I charge $19 for a hamburger at Thirsty Monk. My employees make about $50,000 a year after things. There's no reason they can't afford to live here. Everything I do, based on, you know, I was looking at what you presented earlier, Zach, is about, let's see, change in production costs. We've created a housing factory here in Asheville, the Marines. down. Technological advancements. We have framing equipment to automate what we do. Economic conditions. Here, we're paying people $50,000 to bartending, for working here. So, really, the connection comes down to government and land availability. And they're very connected.

So, the government has the control to make more land available, and that's the one that's the one variable that we need to focus on, because that can make the difference, because there's so many people, you know, there's so many people trying to do all of the other levers and pulling, but we need the help of the government, and we need big, big, big help. And unless y'all want to pay $27 for your cheeseburger, then we need to kind of work on the housing so that the workers who live here can really afford to help with the life that we have. So it's not just our economy.

Rodrigo Afanador [34:38] I would have clapped, but that was good.

Vaidila Satvika [34:45] Yeah, I fall in that same camp. I was gonna say, you know, global capitalism is outside of our control, and it plays a big part in what we're seeing here in Asheville. A lot of people want to come here because it's an attractive city. And so we have money coming from all over buying houses, cash. We don't control that, but we do control what the zoning says. And today, two thirds of residential property in Asheville disallows most housing types. That's something that is, that is really outrageous, and we should change immediately. We should have changed yesterday. And I feel ashamed to be part of a city bureaucracy that hasn't adjusted this yet. But we really need to do a better job.

That's one of the problems that we need to change, but we should, regardless of the problems, we should focus on what we have control over, and zoning is a big part of it.

Rodrigo Afanador [35:44] All right, so it seems like there's consensus as far as where we should focus our attention and where the conversation should go. Playing the devil's advocate, I guess, if you can, like, where is this resistance coming from? Why haven't these changes happened? Badilla, is it just a simple of, like, it's bureaucracy, and things move very slowly, or, like, I'm assuming, you know, there are people who don't want to see zoning change, and are concerned about that? Like, where does this tension line? What are the counter arguments for why we don't free things up a little bit?

Vaidila Satvika [36:18] Good question. I think, um... it's difficult... I think... you have to remember that the changes, at least to the regulations, happen from our legislators, our elected legislators are the city council. They're the ones who decide what is reviewed and what is passed. And so, to be as broad in my speech as possible, you know, that's the place to begin, looking at our legislators and seeing whether or not they are passing regulations to support more housing supply. Now if it's not happening, The question is, why? And I think there is, you can, you know, if you follow politics, you can kind of make your own assessments. I don't really want to go there, but that's where we need to begin.

Rodrigo Afanador [37:12] So just on that out, if you don't mind me jumping in, right? So Vadilla has graciously joined us tonight as a private citizen, and is not speaking on behalf of the city of Asheville. So I very much appreciate his candor. If we can give him a round of applause. for representing the city so well. Thank you. Appreciate that.

Barry Bialik [37:31] So there's one word. It's called fear. It's what the neighbors are afraid of what might go in next to them. It's the fear of city council, that if they make a change that people don't like, that they're not gonna get reelected. And that's what really rules our city. And I know that from chairing, you know, from trying to build here, from trying to work here, from tearing city committees, we rule by fear, meaning the loudest voice in opposition is what gets all the attention, and that is what our elected officials are the most afraid of. So the way to counter that the most is y'all need to be the loudest voice, because the loudest voice is what wins.

And here, the loudest voice is the people that are against, and that of fear. And it's up to us to kind of give the counterbalance to that. So, that's where I leave you fear.

Rodrigo Afanador [38:30] So, in our please, don't let me interrupt the applause, if that was gonna happen.

Vaidila Satvika [38:34] And if I can chime in, when Barry talks about fear, I think I want to call out one neighborhood that sort of, in my mind, encapsulates the changes that we're talking about, which is Montford. Right? Montford has single family homes next to a triplex or a small apartment building, how many people fear more of Montford? Right? Like, Montfordization is middle housingization. And so I think we need to realize that more diversity, more housing choices, don't lead to something that anybody really would be fearful of.

Barry Bialik [39:10] Except I have to say that if I build in Mumford, we build in Mumford, it costs us thousands of dollars more because of the restrictions specifically in Monford. So it comes back to, like, the fear of letting us letting people build housing that they choose, not what other people choose.

Vaidila Satvika [39:27] They do have a historic district. Right.

Rodrigo Afanador [39:29] So on that, a rough estimation is 33% of the people who checked in today, said, No, I don't think I can effect change. False. 33%, you're wrong. You just have to lean in. We can do something about that. Unless you're, all right? A non voting age, I guess, an exception, but... Well, Kelly, how about you? Where do you fall on this side of this?

Speaker 3 [39:50] So many directions, but I've got to, I have to take it back to, I'm gonna build on what Vadilla said, and move it from a historical perspective. Again, if you're looking at zoning, when it became, um, when it became constitutional, which was in 1926. So it became constitutional to zone in 1926, due to Euclid v. Ambler, Supreme Court ruling. Part of that Supreme Court ruling, Justice George Sutherland showed his, from the Supreme Court, the highest court of the land showed his bias against apartment dwellers. So, has this apartment dweller, this other ring, that some of us might be familiar with, this other ring, have its roots, again, way back from when zoning became so generalized.

And Justice George Sutherland would call, um, apartment dwellers, parasites. This is part of his opinion that he wrote, parasites, nuisances, apartments should be kept far away from single family detached homes. John Nolan, who was an urban planner here in 1922, in Asheville, said the same thing, said that Beaver Lake area, the Parkview neighborhood, as well as built more forest, which was a newfangled thing called a large land subdivision, needed to have protection. They needed to be protected against what? Apartment dwellers.

So these ideas that, I think, are really entrenched in culture moving forward that a lot of us don't know the background of, and maybe if we did, we might, I don't know, be more open to changes. Vadilla's 2017 YouTube presentation, I can't say enough about it. I use it in my classes, where he shows, in the 1950s, the code, how much it changed, in terms of land required to build a duplex, a triplex, aquad, et cetera. Just... what's up with that? So, what's up with what happened in 1950.

What was going on in the 1960s, where we were trying again to utilize a way to keep people separated, to make it more expensive, to build duplexes, triplexes, so that wouldn't happen, that would prevent people who could now move into other neighborhoods, where perhaps they couldn't in the past. Lastly, to build on vadilla again. If you take a walking tour of Montfort, practically every other house you see is middle housing. My family is so sick of me hearing saying it. It's middle housing. Look, there it is. There's an example. I mean, you just will see it everywhere. So, somewhere, there was some type of a shift, and I have my ideas where it came from.

After the 1920s, that people really started to frown upon multi family dwelling units.

Unknown [42:38] No, thank you, guys.

Rodrigo Afanador [42:43] All right, so, neighborhoods naturally evolve over time. Given that West Asheville used to be known as worst Asheville, and is now one of the hottest neighborhoods in Western North Carolina. How should this inform our approach to encouraging or strategizing for positive change in other areas? Right? 'Cause, obviously, I love the Montford examples. anyone, does anyone not want their... I don't know. Let's not ask such a broad question. But I feel like more Momford, more better, right? Back to More Supply, more better. Um, I guess, if you want to go backwards again, or, yeah, let's jump in. All right, Badilla, sir. Boom. How come we...

Vaidila Satvika [43:18] I think neighborhoods change all the time, you know? Like, there are neighborhoods in even Manhattan that we're really shady, and that now are good. I think the movie Do the Right Thing is in Bed Sty, Brooklyn, that now is, you know, expensive housing. And so it's, like, they're changing all the time. Um, I think, in my mind, neighborhoods in our communities are getting better, or they're getting worse. It's that simple. And what are we doing to support them, to be better, or are they a real allowing them to go the other direction? And, I mean, that's really simplistic and kind of stupid to say, but, um, at the same time, you know, it is that simple sometimes.

And I think zoning, I think allowing people to invest is a key thing that leads to neighborhood improvement. And at least from, you know, my world is, like, zoning, I think we need to do a better job of figuring out how we can help people to be better able at making changes, to make investments, because we need people to invest in the community, so that that money goes to making homes better, and people see that others are investing, and that they invest, and that's what you know, makes the neighborhood flourish.

Barry Bialik [44:43] I think West Asheville is a good example of what organically comes as different communities grow. So West Asheville definitely has the abundance of new construction going on, but West Asheville also has the abundance of people who have owned their same houses since the '80s. And we recently got a one star Google review from a neighbor who we're building next to who said, Compact cottages is the destroyer of children's playground equipment in trees. And it's because we are taking a vacant piece of land, and we're putting housing on it, so the workforce can live there.

And I think that's, there is, like, it's uncomfortable to go through this process, but the city of Asheville is growing, and we need to admit that. And I have some quick statistics here that my staff shared with me. I thought it was pretty interesting. So here in Asheville, we're 45 square miles. Population 95,000. We have a density of 2,080 people per square mile. Carborough is the densest city in North Carolina, population 21,000, density 3,288 per square mile. San Francisco. Same size as Asheville. of density side, 46.9 square miles. Density is 18,000 people per square mile.

So it doesn't mean we need to get to that, or maybe we do need to get to that in our downtown corridors, but we do need to be open to allowing more people to come to our city, because they're coming. And just us saying no and writing bad reviews about us being destroyers of children's playground equipment isn't gonna stop the people from coming. So we need to adapt. and be open and not as fearful.

Rodrigo Afanador [46:35] So, just... Different question, but kind of on the, you know, maybe seeing West Asheville and Monford as positive example, like, I can't, off the top of my head, think of any examples in Asheville, where there's been, like, a negative effect over the last 30 years from zoning regulations being loosened up or not, and wanted to see if you guys agree or disagree on that. Is there a situation where we've seen it play out negatively in our backyard?

Vaidila Satvika [47:03] I might chime in that, you know, West Asheville has been really organic and dynamic, and it does tend to have more multifamily zoning, so it permits a lot more housing opportunities. You can not only build a single family house, you can choose to build a duplex or, you know, a second home in the back. So there's a lot more flexibility. And so I think that's probably part of the reason why you see that organic nature. And in my mind, that's what we need all of our city to be like. We need, like, when you go to the grocery store, and you can choose, you know, 100 different cereal brands, if you could just choose two, you would go somewhere else.

But currently, our regulations make it so that in most of our residential land, 66%, you can only do one thing, single family house. And that is limiting. It may not look decrepit, because, you know, people keep their properties up, but it does stagnate, and it does have a lot of downward pressure on housing in the city, and the dynamism of what neighborhoods are like.

Rodrigo Afanador [48:15] So, we didn't get the presentation was wide ranging, and there were so many areas I wanted to go to. So I've lived in, like, downtown LA, downtown New York, downtown DC, downtown Miami. Like, I've moved a lot, right? And when I was in Santa Monica, I lived in a little cottage apartment type thing. Nine blocks from the ocean, I could just walk to the little Santa Monica Pier in the ferry. Impossible. Couldn't do that. I couldn't afford that house. If it wasn't for that type of housing. I lived on 86th Street, in New York, and could walk, 80 streets as a thorough street, I could go right to Central Park, all the time.

No way I would have been able to afford, like, you know, a house there that would be insane. They don't even exist. But, like, so, like, anyone who's experienced this firsthand knows that these things solve workforce conditions. If you need a population to live there with a tax basis, and, okay, there's a whole other talk, right? They need somewhere to live. So, I love hearing all this. I just wanted to chime in there. Did you have, did you want the last minute? I was just, Barry, do you have an example of this playing out negatively, I guess? I just wanted to. So, I mean, go full circle.

Barry Bialik [49:15] I mean, we always I mean, we always have to be respectful of the communities and the people who have lived in their neighborhoods for a long time. To be careful that what we do doesn't force them out of their neighborhood. So we do have to respect that. And we have to be careful about that. But we can't let that not move forward, because that's where we're at right now. I mean, kind of, you know, bringing it full circle back to our missing middle discussions. The reason missing middle is not moving forward in city council right now, is because they're afraid of what it will do to displacement.

So they're basically saying, Well, we need to exclude all of the previously red lined areas from taking advantage of these opportunities. So it comes full circle. So there's a bit of, we need to be respectful. We need to be careful. But again, where I said, this fear, if we run out of fear, nothing happens. So we need to be careful, but we can't be that fearful. But.

Vaidila Satvika [50:16] And I'll add a little bit to this, that, um, we need to be careful where we exclude more housing opportunities. So what Barry's talking about, there's this concern that we don't want to displace people from, um, changes in regulation that may precipitate more development, right? So, you allow now, you allow, let's say, let's just, I'm just throwing this out there. You allow triplexes everywhere in the city, and maybe your neighbor decides to tear down this tiny ranch to build a triplex. And so that person who's there and their family, they're out. So that's the concern, right? It's a legitimate concern.

But if you carve out neighborhoods now and say, you're not going to be able to take advantage of more housing opportunities, what does that lead to, right? So I'm not saying I have an answer, but I think it's just as potentially threatening to disallow more housing opportunities, especially for those people who most need it. Which makes it a complicated problem. Amen, brother.

Unknown [51:25] Yeah. Yeah.

Rodrigo Afanador [51:31] All right, thank you, guys, for speaking on that. That is definitely a murky topic. Um, maybe a simpler question. If there was one zoning change that you would advocate for, what would it be and why? Kelly, do you want to start?

Speaker 3 [51:51] I had two, so I was trying to pick the... Which one?

Rodrigo Afanador [51:55] You can do two. Two's a lad.

Speaker 3 [51:56] Um, reduce the mandatory parking requirement. And... reduce the minimum lot size requirement. So, in Houston, Texas, to speak to your point, Vadilla. Apparently, in 1998, the city of Houston, Texas, they were a growth minded city council, so that's something to watch out for as well. So who are the representatives, and are they a growth mindset, group, or are they anti growth? So Houston, Texas, was growth. And in 1998, they took their minimum lot size from 5,000 square feet down to 1,400 square feet, and they applied it across the entire city. There were no carve outs, anything like that.

And so, Houston, while, of course, they're experiencing a crunch as well, but they've remained fairly affordable in the midst of every other large city, and they say that because the zoning change applied to all the whole city, that it didn't lead to displacement, like, is a concern that a lot of people have right now.

Rodrigo Afanador [53:06] Thank you, Kelly. Barry?

Barry Bialik [53:08] I feel like Barry's very prepared for this. Trying to figure where to bring it in. So I'm gonna read you a headline from the city of actual website that says, Asheville City Council to consider code changes that support small scale residential infill housing. It goes into describe a bunch of stuff. Mr. Vadilla is quoted in this. Stated August 17, 2017. That's the last time we did any zoning changes to help support housing. So now is the time. We've done nothing since then. So there's lots of things.

I mean, the missing middle package is kind of moving forward, but honestly, I mean, I think some of y'all know, like, what I've proposed is very tactical little sliced dice changes with the flag lots in the cottages, and the reason why those are so important is because that's where their infrastructure is, and forget about zoning. Forget about anything else. What really makes a difference, and our city is infrastructure. And infrastructure is for shit. West Asheville doesn't have water lines, doesn't have sewer lines, doesn't have storm order. So what you need to do is look at where it meets the most, where do you have sewer lines? Where do you have water?

Where can you possibly put storm order? And that's the only place it should be. So, going with the most tactical slice and dice, which is, like, kind of the flag lots, 'cause it's existing houses and the cottage developments, 'cause you currently need to do 5, Why not do two? But I think it's slice and dice. It's not zoning discussion. It's an infrastructure discussion. So that's what we should be talking about.

Unknown [54:42] Yes.

Vaidila Satvika [54:50] If I were in charge, I would, uh, tomorrow, drop single family zoning, and make all residents, all residential zoning just one, or kind of a spectrum of districts that allow different types of housing units, um, and they would go from kind of a lower intensity to a higher intensity, based on their location, that would be based on a sound rationale. Like, if you're very close to the central business district, downtown, you are allowed to build, say, 20 units on your parcel, as long as you fit within a certain envelope that most people can agree is not egregious, you know, something like 50 feet wide, 100 feet long, maybe, you know, four stories tall, something like that.

And then it would sort of go down in tears to the most suburban part of the city of Asheville. So I think I think that would be that would be big and basically making zoning all about the size of the box. If we can agree to, say, 3 or 4 stories and a certain box, why should we care whether somebody chooses to make that, a single family house, or a five plex. Like, the look in the feel is okay, so we shouldn't care as much. Um, that'd be my big, my big takeaway.

Rodrigo Afanador [56:18] All right, so, lightning round, so we can get to the audience questions. We know we have at least one question coming. Paul disappeared. Never mind. All right, so, lightning round, in one sentence, what's the most important takeaway you want people in the audience to remember from today's discussion? And Badil will start with you and go back to Kelly. Um...

Vaidila Satvika [56:42] The most expensive housing is single family housing. If we don't move in a direction that incentivizes duplexes, triplexes, and everything above, we're failing in the affordability argument. That was a great sentence. That was a good sentence. Barry.

Unknown [57:00] It's up to you.

Barry Bialik [57:02] Oh, the, uh, the, the voice of the counter is so strong, that the only way change is gonna happen is if our, if, is if our leaders listen to people like you, and the only way they're gonna do that is if you show up, and you gotta go up kicking, screaming because that's the only thing that they listen to. So I leave it with you. We want change. I want to see you at the next council meeting. I want to see you September 10th, when we're going to be in front of city council with two changes for the UDO to create more housing. I need every one of you there.

Speaker 3 [57:39] Amen to that. Let's get involved. Get involved. It's a complex topic, and who better to really put their brain power behind it than people who work and live and breathe, real estate all day long. So get involved, let your voice be heard. Barry's absolutely right. We'll be there.

Rodrigo Afanador [57:57] All right, Kelly, we'll start with you and go backwards. This is a mic drop, right? If you could describe Asheville's housing future in one word. One word. Uh, what would it be? Expensive.

Unknown [58:12] The future?

Speaker 3 [58:13] No, no, no. The future. Okay, all right. The short future. Short future. Uh, I think it's still gonna be attractive.

Barry Bialik [58:22] Diverse. It's gonna be single family houses, multi family, small, single family, but diverse.

Unknown [58:29] Expensive.

Rodrigo Afanador [58:31] Oh, no. All right. Chiles. Well, we're gonna get into the Q&A. If we can get a round of applause for the speakers, please. All right, um... Really quickly, while we have everybody's captivated attention. We've tried multiple times throughout the years to get people who have been running for city council to join us for an AVLmeetup, and, uh, this is just a very public request. If you know anybody who's running, who might be interested in joining us. We would change our programming to have them on the stage, so we could maybe get this conversation going with the people who will be, you know, voting on council. So if you know of anybody, please let us know. We'd love to bring him on stage.

Hopefully everybody who's running, but we'll take whoever's willing. All right, questions. This gentleman has a question here. So we got this newfangled thing. If we could toss this over to the guy in the back standing up, I'll see how far. You got this? Yes. There you go. Keep going. Crom's ready. Boom.

Unknown [59:28] There you go.

Rodrigo Afanador [59:30] Do I speak into...?

Unknown [59:32] Oh.

Speaker 5 [59:32] Hey, all right. Wow, this is, like, some weird... Yeah, okay. Uh, thank you, uh, for the input from everybody on stage. I appreciate that. I think I'm what you would call a skeptic. for much of what you all stand for. And so I like coming to these meetings to come and hear, because I appreciate dialogue. I appreciate input. And so, Barry was the first one all night to mention infrastructure. And I've been here 25 years. I live in West Asheville, in the Horny Heights neighborhood. I'm curious where other folks live, too, if you'll be affected by certain development, because that's one thing that we don't know. But infrastructure is crucial around here.

And as Barry said, I believe the quote was, it is shit. Is that a direct quote? I think so. You can quote me on that, yes. Yes, yes. Now, you mentioned sewer and water lines, but also just basic road infrastructure. And I'll give you an idea of, kind of, one aspect that I'm thinking of. Near our neighborhood, we have the crossroads development that is now going in, which is Vadilla, maybe you can help me, is it, 600 units?

Vaidila Satvika [1:00:50] I don't I'm sorry, don't I don't know.

Speaker 5 [1:00:53] It was originally going to be 800, and now it's 600. So that's slated to be done shortly. And then there's another one that was just okayed by the Home Depot on Smoky Park. that's 300 units. So that's 900, possibly 1,000 new units. And we equate that to probably two cars per thing. So you know, about 2,000 new cars. The main lines into downtown and West Asheville are Sandhill Road and Smoky Park. Anybody been down Sandhill Road? Yeah. It was built for tractors. But not for that kind of traffic. So, what would convince a skeptic like me to get on board with you all?

Because I do see the need for more housing, and I do welcome density done intelligently, is if you had, in your plans, something very specific and complex that you are putting forward to city council that holds them accountable for infrastructure. I'll give you a quote from Maggie Ullman from the Hall Creek meeting. She said that it's building development, like they're gonna do at Hawk Creek now, that builds infrastructure. But if you ask any civil engineer, that's backwards. You've got to have it the infrastructure first, right? Quick example, and then I'm done. Sorry.

Rodrigo Afanador [1:02:19] Can you give a question versus the example first? Just so that everybody else gets a chance?

Speaker 5 [1:02:23] Sure, yeah, here's a question for Fadilla. Do you know the number of personnel in city that are responsible for filling potholes, Asheville Citywide?

Vaidila Satvika [1:02:33] I don't. There's a yearly budget for potholes. I have no idea what it is or how many... Okay, I do.

Speaker 5 [1:02:40] I just talked with Ben. Woody, the assistant city manager. We have two men and a truck. That is indicative of what we...

Rodrigo Afanador [1:02:51] This is not an open mic session. So if you have a question, we would love to field it. If there isn't a question, Mike's waiting for the box.

Barry Bialik [1:02:58] I think the reality is, we need to all start, stop thinking, and car math. We need to, like, yes, flushing the toilets is important. But we need to, like, stop thinking in car math, and I think that's what more densities do. And, you know, that's just my one answer to that is, like, car math needs to change.

Vaidila Satvika [1:03:16] And I'd say as we, as cities get more people, they get more resources to sort of tackle problems. Car traffic isn't going to get better. as it hasn't since the Middle Ages. And, uh, unfortunately, that's the way things go, you know, until we really can invest in, in the bus rapid transit, in certain things that may help to alleviate the problems in certain areas. But it may mean driving a lot slower and having to leave to get to your appointment a lot earlier. Unfortunately. That's cool.

Unknown [1:03:57] All right, Mike. Hey, y'all. What's going on, sir?

Speaker 5 [1:04:01] Thank you, guys, for all the insight. I appreciate it. I think the gentleman here was referring to impact fees. is kind of what I was... of what he's asking. He's saying, Hey, how is somebody going to developer yourselves? How are they gonna give back? And it typically comes in the form of an impact fee. Which is very common, right? Illegal in North Carolina? Sure, they are. Uh, sure, they are. Uh, to confirm my question. Uh, has anybody ever, uh, experience the, uh, variance of such zoning, so has anybody ever been to a variance hearing, and because I'm used to more of a neighborhood? Excellent. And I don't want to learn this process, because I'm relatively new.

So this might seem elementary to all of you or anybody here. But I just want to confirm, when you went to a neighborhood and or RCO, or variance hearing, what does that look like? Is that more of the board making a decision, or is there actually impact from the neighborhood? What does that look like? So, you know, if you wanted to increase your density for one particular project, Is it more of a board? Is it neighborhood? Can you explain that to me, just so I have reference, and everybody in the room does?

Vaidila Satvika [1:05:18] Let me start this just to set the stage for people. So impact fees. Some states are allowed to charge fees related to development that are very specific and outright that, say, you can charge so much per numbers of units that go to transportation. We can't do that in North Carolina. It's not permitted. It's not because we don't want it here in the city of Asheville. It's just, the state legislature doesn't allow it. So we're not allowed to do that.

There, we have what's called conditional zoning, that any one of you, if you want to change the property, because you're working for a client, and they don't like what they can do there, you can actually go to city council and say, I want something completely different. It's basically legalized horse trading. I want, instead of being allowed to only build four units, I want to build a commercial property. And through the conditional zoning process, you make your case to have counsel prove something different than is legally permitted under the existing zoning. And if counsel agrees, because you have a really good argument, they will pass it and your clients will be happy.

Barry Bialik [1:06:30] So the closest thing we have to any kind of impact fee is that where the sewer and the water companies can reimburse to pay back for cooking up to the existing infrastructure. And that exists throughout the state, but impact fees for, like, paying the city for things does not exist. But, yeah, like, it costs $10,000 to pull a building permit here because you have to pay the water sewer. So we pay back for that stuff. The process for zoning changes you're asking for, I think the biggest thing is, like, is to work in, and our city has some of this.

There's density bonuses if you do certain things, meaning, like, if I want to build 20 houses in an acre, but if I want more, I can do some affordable. I can do some sustainable. So we do have these certain things that are built in, that you never need to go to a variance hearing. So, you know, I think the only things that really have to go to, like, conditional zoning, if there's more than 50 units in it, which was talk about changing, but we actually do have in our rulebook, a lot of things that you could do to get more dense, if you do some good things. Cool.

Rodrigo Afanador [1:07:36] Thank you, guys. All right, where's the box? Can you guys throw it over to...? Mr. Larson?

Speaker 5 [1:07:42] So, first off, thanks for everybody for putting this together. Thanks for your time for being up here, the three of you. We actually own four apartment complexes in Houston. He brought up Houston earlier, Kelly. And one of the things that we're doing with Houston Housing Authority currently is a tax abatement program. So, we come in, we buy an apartment complex, and we meet 60, 80% area median income levels for rent, and they waive a portion, a substantial portion of the taxes that are owed. So, we provided hundreds of immediate, affordable rentals. I know in the past several years, you know, Asheville has been one of the top rent competitive rental markets in the country.

That's not a good thing. if you're a runner. That's the opposite. So rents went up, what, 25% a couple years ago, another, you know, double digit gain after that. City council is a big part of this, you know, infrastructure, all this is tied in. But my question is, one, what is the city and this, the deal, this might be, oh, I'm saying that, right? What is the city doing with public, private partnerships? And, you know, for all three of the panelists, what else do you think that we could do to help encourage private investment? Because the government can't build affordable housing. That's just a fact.

Barry Bialik [1:09:12] Great question. So we do, I mean, the city does have what's called the Luigi program, which is similar to what you're saying. Like, if you take certain investment property and are willing to commit to some affordability standards, you can get your property tax abated. So the city has programs like that, especially to encourage for new construction, or I think even for acquisitions, it could work. So we have some of that, but, you know, the biggest thing is funding.

Speaker 5 [1:09:36] The problem with the new construction portion, Barry, is that it wasn't economically, it's not economically feasible, right?

Barry Bialik [1:09:43] No, it's not, and we don't have, you know, and the budget coming into Asheville. It's so limited, where other cities have grants, where Asheville of our housing trust fund, nothing is available as a grant, so the best the city can do for new construction is a low interest loan. So it's limited just because of the size we are and the money we have. But Luig, you know, the tax abatements are one of the big, you know, are more the more valuable tool. And I think there will be some, there's always been more discussion of how that can be used for preserving affordable housing.

Speaker 3 [1:10:18] Man, quickly make a comment about the government cows.

Rodrigo Afanador [1:10:31] Oh, here. Hello? Daniel. Can we get the speaker mics? Or they get... I got through the box. Hey. Drop the mic on that one.

Speaker 3 [1:10:42] Okay. Anyway, the government did build public housing, uh, for many years after the Great Depression. That was one of Franklin Delano Roosevelt's plans to get us out of the housing crisis that occurred after the Great Depression. So, the public support for that, of course, waned over the decades for a variety of, you know, what kind of reasons, and pretty much Nixon nicked that whole program when he became president in the 60s. So, could it come back if people were really all for it? I think it could, but it would take, again, collectively, all of us standing up for that.

Speaker 5 [1:11:18] Yeah, I just mean, I mean, just, I don't know of any examples in the last... five, six decades. San Francisco, you guys, does anybody know what the cost of one unit, the city of San Francisco built, affordable housing, or?

Rodrigo Afanador [1:11:34] No, it was like, wasn't it just shy of a million right around there, right?

Speaker 5 [1:11:38] It's over $800,000? We're doing it, we're doing it for, like, $150,000 to $175,000. So I guess my point is, Kelly, like, we can't, we could convert current... I guess I should, more accurately. We can convert current units to affordable housing at about 50% of the cost of building. So I guess that's my point is...

Vaidila Satvika [1:12:02] I'd add that we, although it's important to think about partnerships, like, we should maybe start by making sure that all housing types are legal, and that 1st people can build them. Like, we should open up the gates so that there isn't as much pent up pressure in the housing market, and to see how things may resolve a little bit. At least we should do that first before talking about partnerships when on the other side, we're in control, and we're disallowing a lot of housing types in the city.

Speaker 5 [1:12:38] That's fair. We're trying to solve a problem that current administration in Asheville has actually created from the...

Vaidila Satvika [1:12:45] Exactly, and perpetuating. Yeah.

Rodrigo Afanador [1:12:47] All right, so, we have unfortunate news, guys, it is 731. Hopefully, our panelists decide to stick around a little bit better. But we have a three year track record of getting out between 730 and 733 for three years, and we can't break that today. So, please, big round of applause for our panelists.

Unknown [1:13:12] Yeah, that's good.

Rodrigo Afanador [1:13:14] And just two quick things. One, if you know somebody who's running for city council, please put us in contact with them, we'll jump through whatever hoops we need to do to make that happen, and then two, next month, it's gonna be the second Tuesday of September, so September 10th, and it's gonna be about funding your next real estate deal.

Vaidila Satvika [1:13:31] And let's give a big round of applause these two guys for setting this up.

Rodrigo Afanador [1:13:41] Hey, guys, Rodrigo here. Wanted to say thank you for taking the time to listen into this month's panel conversation. We hope that you join us in person at next month's meeting. You can find out more at AVLmeetup.com. We primarily meet on the 1st Tuesday of every month, but be sure to check out our website, AVLmeetup.com. You can also watch this conversation on YouTube at AVLmeetup. Also, I have a quick announcement. We started a property management company called Vesta Property Management. So if you're looking for 3rd party management for long-term rental, we'd love the opportunity to talk to. Our goal at Vesta is to turn houses into homes and investments in 2 returns.

If you're looking to work with a third-party management company that will allow you to have peace of mind and experience freedom around rentals. Reach out to us. We can help make that happen for you. Best the PM.com. What's going on, everyone? Zach here to close it out before you sign off for the day. If you liked the data driven portion of today's meetup, then I'd love to take a moment to tell you about the Ruiz Report and REMC.co. If you're a real estate professional, then you know that you should become the local economist of choice, but you're probably unsure of how to learn the skills required. That's where the Ruiz Report comes in.

We offer customized marker reports to promote your business, training videos so you learn how to interpret the market data, and monthly quizzes to keep you sharp. Learn more at Reesreport.com and sign up for a free account to watch all of our training videos at no cost. If you're more interested in the live data and some data and analytics dashboards, then I highly suggest you check out ramc.co. REMC.co is the 1st of its kind, data and analytics dashboards for the real estate industry. Now you have to be an active participating member of the MLS in order to sign up, but it is unparalleled data on every market participant, whether that's an office, a listing, or one of the realtors.

Again, you can find out more about REMC.co at REMC.co. As always, thanks for listening, and we hope to see you at one of our next meetups. If you can't make it and you still want to be part of the movers and shakers, then sign up for a free account at AVLmeetup.com and get yourself into our member directory. Thanks again. See you next month.