Radical Change – Not Affordable or Green

By Jan Sorby

The Hamilton Administration’s plan to reintroduce multiplex housing into Bloomington’s core neighborhoods is being accomplished through a complex remapping of the city’s core neighborhoods — radically redefining what types of housing can go where.

All the core neighborhoods (areas that were Ground Zero during last year’s UDO revision controversy) are converted from R3 to R4 (except, oddly, McDoel Gardens).

Why do this? What is this all about?

City planners say they applied an esoteric algorithm to decide where to locate R4 zones. In public outreach sessions, planners have attempted to explain this complex formula, which had to do with clustering small lots and drawing a 50-foot “buffer” around the cluster, and then shifting to the closest public right-of-way. Honestly, it left residents baffled.

Planners stated that the formula is not the only component to the decision about where to put R4.  There is a subjective component, having to do with where increased density would “do the most good.” They did not elaborate.  But I wonder, “do the most good” for whom?

What, actually, can a developer build in an R4 zone?

– Duplexes with 6 bedrooms (permitted use/by-right);

Triplexes with 9 bedrooms (permitted use/by-right);

– Quadplexes with 12 bedrooms (permitted use/by-right);

Maximum building height of 40’ (3- to 4-stories) (permitted use/by-right);

– Multi-family apartments buildings with up to 8 units and 24 bedrooms (conditional use).

Planners made it clear they prioritized higher density close to amenities. However, the definition of “amenities” changes depending on the context, which makes matters very confusing. If planners want to make density about environmental issues (to justify putting more density within the core), “amenities” means streets, sidewalks, sewers, storm sewers, water, gas, and public services such as police and fire. In other cases, “amenities” means places of employment, parks, shopping, and restaurants.

This is perplexing because newer subdivisions have better streets, new sewers, city gas and water, newer storm sewers and contiguous sidewalks. Core neighborhoods lack many of these essential and basic “amenities.” On the other hand when defined as centers of employment, shopping, etc, one thinks of centers other than downtown with these amenities, such as, East 3rd Street near the College Mall and West 3rd Street near Whitehall and the factories. Will more density be needed near the new hospital?

City planners noted that they “looked into” the practicality of fitting plexes into the “building envelope” of a typical small R3 lot and found it would be difficult to fit in larger plexes. So, rather than tailor-fitting multi-family units to smoothly fit the current building envelope and to blend with existing housing stock, they change the zoning. The new rules allow:

  • aggregation of lots;
  • decreased side setbacks (without extra with added stories);
  • increased heights;
  • increased bulk; and
  • increased impervious surface coverage.

No wonder residents are upset.

It would have been easier to just rewrite the setback rules for R3, instead of changing the entire zoning typology in the core neighborhoods. But making it easier for developers to shoehorn huge plexes on to the smallest lots in the city seemed to be a primary goal, regardless of the definition of amenities.

What can developers do in an R4 zone?

As originally created last year, the R3 zone allowed single-family houses and Accessory Dwelling Units (ADUs), also know as granny flats. Proposed changes to R3 now include:

  • Duplexes with 6 bedrooms (permitted use/by-right);
  • Triplexes with 9 bedrooms (conditional use);
  • Quadplexes with 12 bedrooms (conditional use);
  • Maximum building height of 35’ (3.5 stories).

Conditional means a developer applying to build a quad would have to go through a public hearing before the Board of Zoning Appeals,  although an application meeting certain criteria could be approved by an in-house Hearing Officer with the public process taking place during the workday.

Permitted use/by-right means if all the requirements for setbacks, impervious surface coverage and height requirements are met, developers have a green light to build without a public hearing.

By contrast, in R4 the uses include:

  • Duplexes with 6 bedrooms (permitted use/by-right);
  • Triplexes with 9 bedrooms (permitted use/by-right);
  • Quadplexes with 12 bedrooms (permitted use/by-right);
  • Maximum building height of 40’ (3- to 4-stories) (permitted use/by-right);
  • Multi-family apartments buildings with up to 8 units and 24 bedrooms (conditional use).

If the UDO amendment and the remapping are passed, in a neighborhood like Bryan Park or Waterman, a very small house with an allowed capacity of three unrelated people could be purchased and replaced by a three- to four-story, 12-bedroom fourplex with up to 12 unrelated adults, by-right. Or the house could be replaced by a 24-bedroom, eight-unit with up to 24 unrelated adults if the developer gets a variance.

An eight-unit plex is difficult to fit within the building envelope of a typical core neighborhood small lot. But there is no regulation preventing developer’s buying two or three adjacent lots and combining them to make room for the big apartment building. Many landlords in the core neighborhoods already own side by side lots.

Will developers really build big plexes in Bloomington?

In public meetings, planning staffers have suggested plex development is likely to be slow and incremental, and thus unlikely to change the character of neighborhoods significantly. They base this assessment in part on the city’s experience with ADUs, which have been allowed by-right in all residential zones in the city since December 2019.

Staffers point out that only eight ADUs have been started in 2020. An ADU is essentially the same thing as a duplex which is a second dwelling unit sharing a lot with a primary structure. However, there is one crucial difference: City law stipulates that the owner of the ADU must live in one of the units. It is thought that the owner of the ADU will monitor renters to ensure increased density will not be detrimental to the public welfare or permanently impair the use of adjacent properties. The owner-occupancy requirement means an ADU is unlikely to represent an attractive opportunity for real estate investors. It only makes sense for a homeowner.

Also, when the ADU program was rolled out, the ADU was a conditional use that received the scrutiny of the Board of Zoning Appeals to ensure the additional density would not cause harm or be a burden to residents. 

The UDO updates make it much easier for developers to build plexes. Duplexes, triplexes, and quads are proposed to be by-right with no BZA oversight required. By contrast to the ADU, the plex conversion is a very attractive option for real estate developers. A developer identifies an “underperforming” unit — an old house on a small lot in an area where house prices are appreciating but are still relatively low. The developer enlarges or replaces the house with a luxury plex suitable for rental by students, professional couples, or small families with means.

For the developer, this process has turned a single monthly rental stream into as many as 12 or more  if the lot or lots will accommodate a six- or eight-plex. While the once affordable house is gone for rental or homeownership.

Of course, investors will do this. Countless conversions and teardowns happened before the “three unrelated people per unit” law went in to effect in the early 1990s. Bloomington has a shockingly small number of historic houses compared to towns across the state and county because of past tear-downs and conversions to parking lots. Bloomington already is recognized nationally as a small but hugely attractive investment real estate market.

City planners acknowledge that out-of-town investment in Bloomington already is taking single-family detached houses out of the city’s home ownership inventory. The city’s recent housing study acknowledges that out-of-town investment scenario is creating a shortage of affordable home ownership opportunities that needs to be addressed—and that’s without plexes as a permitted use tossed in. Why is Bloomington making it easier for developers to acquire, convert or destroy its most affordable housing stock?

With plex conversions on the table, the lure for the private equity-backed development companies who are today pouring hundreds of billions of dollars into funds to buy up small properties across the US for rental apartment conversion will be irresistible.

The recent Bloomington Housing Study makes it clear that protecting the core housing stock from conversion or destruction will further the environmental and affordable housing goals of the city when it states:

“A city’s existing housing stock is its best source of affordable housing. Removing older housing often results in the removal of an affordable unit but also adds to the city’s carbon footprint. The most environmentally sustainable housing unit is the one that does not have to be built.”

This begs the question: Why are city planners increasing opportunities for developers on the smallest, most affordable lots in Bloomington and taking away home ownership options for the city’s residents?

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