Don’t Be Dupe-plexed

By Jim Rosenbarger

The Mayor and some City Council members continue their push to open doors to new multi-family apartment development in single family neighborhoods. Having been rebuffed in 2019 during the debate over the UDO revision, the Mayor passed the intervening months without discussing a middle ground approach. Instead he came back in 2020 with a more radical proposal. Was it a bargaining ploy? We’ll see. Revisions have just been released.

Multi-family apartments — plexes — are buildings with two or more dwellings. Each dwelling can have three bedrooms. A quadplex could have four units, twelve occupants, twelve cars, and four exterior air-conditioning units. The cars will fill adjacent streets and the AC units will sit within inches of your next-door property line. 

The updated proposal, released over the President’s Day weekend, dials back the original concept. Quadplexes are gone from the prescription for core neighborhoods; it’s duplexes only. By comparison, a duplex sounds innocuous — still noisy, but with mathematically reduced impact. That’s probably what the Mayor and his helpers want you to think.

Instead of a quad, consider having duplexes for both of your next-door neighbors. You’d still be adjacent to twelve occupants, and four AC units, but they’d be in stereo.

Why would a rental company invest in duplexes instead of tri- or quadplexes?   

  • Duplexes will fit within many existing houses with little exterior remodeling.  Buy one, get two.  
  • Historic districts control exterior appearance, not occupancy.  Historic homes, especially subdividable larger ones, will be attractive to well off students.  Greeks anyone?
  • Duplex construction, new or remodeled, falls under the Residential Dwelling Code.  Tri- and quadplex construction is governed by the Commercial Code, which carries more expensive building requirements.   The rental property manager’s usual team of remodelers will be able to handle much of the duplexing.
  • Additions are typically significantly less expensive than demolition and new construction.  Addition options include building out, up or down.  Some additions will allow the original tenants to remain and pay rent while the addition is being built. New construction usually takes longer to build and start collecting rent.
  • Many rental houses have been rented for years and the owner’s debt is paid off or down. Investment in duplexing the house probably requires little additional debt load, freeing up capital for another rental investment. Buying an existing house, tearing it down and then building a new tri- or quadplex requires much more up-front investment and financial risk. 
  • With a much lower investment required for a duplex compared to a tri- or a quadplex, many more investors will qualify to invest in duplexes, either through all new construction, a new addition, or simple remodeling. 
  • Costs will vary from site to site, but profit percentages will probably be quite a bit higher and have a quicker return for duplexes than for triplexes or quadplexes.

Core neighborhoods at risk

It’s no surprise that new multi-plex zoning has been shown to immediately raise property costs. The generous increase in rental income potential from plexing gets baked into property cost, raising property values for both existing rental houses and homeowner houses. This effect could be devastating for owner occupancy.  As plexes begin to replace owner-occupied houses, the neighborhood’s desirability to current and prospective owner-occupants drops.  A tipping point toward a student monoculture will come sooner in areas such as Elm Heights, where transitions from owner-occupied to rental are outpacing rental to owner-occupied by three to one.

Existing homeowners will be doubly encouraged to move out:  They’ll want to find a more livable neighborhood, and they’ll be able to sell their house for more money. Prospective homeowners will be doubly discouraged by the higher prices and the neighborhood’s visible transition to rentals.  You won’t see a real estate ad targeted to prospective homeowners extolling the charming student plex next door.

The slide toward all rental has been played out in other university towns.  Once a street reaches a tipping point (50% rental?) owner occupants bail and don’t come back. Many students like living with many other students, reinforcing the monoculture. In Bloomington, prior to occupancy limits, the same pattern occurred.  Examples include Hunter Avenue and E. 2nd St.   

A previous mayor, Tomi Allison, placed a high value on owner occupancy and historic neighborhoods. She recognized that the survival of homeownership required rental occupancy limits.  Her leadership initiated those limits and saved the culturally valuable and diverse core of Bloomington. 

Today the primary risk to our core neighborhoods is the current mayor.  His simplistic goal is to increase the number of apartments in core neighborhoods — the more the better.  The presumption is that, with new supply, other properties somewhere lower on the housing food-chain will become available, and more affordable (“filtering”).

Despite the thousands of new student apartments built in recent years, the needle of housing cost hasn’t moved toward affordability.  Now the mayor is ready to risk core neighborhoods to do what those thousands of apartments couldn’t. Elm Heights and Bryan Park could become all-rental and still not tweak the needle.  

Our core neighborhoods were built a century ago to embody patterns of development we now want for much of Bloomington: higher density, a mix of homeowners and renters, walkability, and varied house sizes and costs. The core’s growing popularity should serve as an example to be replicated. Eradicating the core’s homeowners will make density harder to sell where it’s needed.  

Violating the Comprehensive Plan

Adding density to Bloomington is a worthy goal, and our community’s policy plan, the Comprehensive Plan, tells us where to do it and, very specifically, where not to do it.  (Hint:  We don’t need to sacrifice, or even risk the core neighborhoods.) Unfortunately, the mayor sees the Comprehensive Plan as a loose-leaf binder, and somehow he’s purged some very important pages.

The Comp Plan is intended to guide zoning.  (See page 1, “Introduction” of the UDO.)

Instead of complying with the Comp Plan, the mayor’s plex zoning flagrantly violates its specific language:

“It is important to protect the existing single-family housing stock within this district.  The conversion of dwellings to multifamily or commercial uses should be discouraged… Safeguards should be considered to hinder or reverse the conversion of owner-occupied residential units to multifamily.” (my underline)

Mixed Urban Residential, p. 84

Tossing the Comp Plan and moving ahead with higher density in the core neighborhoods has been rationalized by saying that it gives contradictory recommendations which required making choices.  That can be true about some policy plans, but in regard to our current Plan inserting higher density in core neighborhoods is very specifically ruled out with no wiggle room.  

 “Most core neighborhoods are stable but are trending towards a lower percentage of new single-family homes.” …” Existing core neighborhoods should not be the focus of the city’s increasing density.”

Chapter 5, Housing Trends and Issues, p. 60

Another way to dismiss the Comp Plan is to label the use of this kind of specific language as “cherry picking.”

With this core neighborhood issue the Plan has a basket of ‘cherries’, enough to make a pie. (See more cherries on pages 61, 62, 63, 64, 65, 82, 84, and 85.)

No Off Switch

The Mayor’s spokesperson has said that if a problem emerges with plexes, changes could be quickly reviewed by the Plan Commission and the Council, and easily resolved. What she is referring to is, in the revised proposal, a system of “buffering” — a 150-foot-wide zone around each new duplex in which no additional plex could be built for two years. The intent is to slow proliferation of duplexes to “avoid concentration and allow ongoing evaluation and monitoring,” according to the city’s February 11 press release.

After giving developers a green light, watching them buy and buy, then build and build, city planner swill decide that we’ve had enough and a decision will be made to simply switch the light to red?  After trying repeatedly to force plexes in unlimited numbers, the Mayor will rediscover the missing Comprehensive Plan pages and change his mind, just when plexes are starting to rock?  Here’s a likelier scenario: A new mayor saddled with a wave of unwinnable developers’ lawsuits.

Writer Notes

My wife and I have lived in Elm Heights for 30 years.  In 1989, I walked the streets looking for a house to remodel.  I wanted to live in a place where my early teen sons could get around on foot. We lucked into a vacant affordable lot, candy for an architect.  Most of our neighbors still lived in the houses they had built new in the late 1940s.  My wife still walks to work, and I work at home, sometimes in and on the house.  We’ve shared one car for decades.  

Over the years we’ve bought and remodeled three nearby houses, partly to save them from becoming student rentals.  Two of them were sold to owner occupants. One is our rental, and though it’s across the street, we think of it as our accessory dwelling unit.  Tenants have been families and grad students, staying two to six years.    

This second round of plex debate has been doubly disheartening. I’d rather be contributing to improving the parts of town that need attention, instead of having to defend our rare treasure of a neighborhood.  Again, we find it is necessary to protect the neighborhood we love.

We get along with our two next door undergraduate occupied rentals, but we have our limits.  It would be sad to leave the trees we’ve planted, the house we’ve carefully built, and our neighbors, but we could do it.

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