2016 BoC Retreat Discussion Question

On the topic of overcrowding and high density construction in Corolla, there have been some chilling revelations.  Our volunteer fire department has excellent ratings for skill levels and responsiveness, but our infrastructure limits the size of fire that can be controlled.  It may be okay to allow a house to be built at a size above the fire-fighting capacity, as long as the owner explicitly accepts the risk.   

But should it be okay to allow that house to be close enough to the property lines to threaten its neighbors if it should catch fire?  

Are the recent multi-structure blazes in Whalehead, Pine Island and Corolla Light the start of a dangerous trend?  

Will the proximity of a large home or commercial structure have a negative effect on the sale prices of its neighbors?   

Will the last 20% of development in Corolla weaken, or enhance, our attractiveness to vacationers and investors?

Discussion Questions for 2018 BoC Retreat

2. REGULATION OF HOUSING DENSITY ON THE OUTER BANKS

Corolla’s rent-per-bedroom has slowly declined from 2002 to the present based on analysis of Occupancy Tax receipts per bedroom, adjusting for inflation and the 2005 tax rate hike.  Corolla’s weak rental market was first publicly noted in 2005 by the Chamber of Commerce during the Occupancy Tax rate hike hearing. By then the summer population density had already reached 7,000 people per square mile with more than 9,000 vehicles jamming parking lots and NC12 during the week.  Given that Corolla was as crowded as many of the vacationers’ home cities it is not surprising that the 2007 Tourism survey flagged crowding as a significant dislike for our vacationers.

To combat weakening rental rates individual owners added bedrooms or built “single-family homes” of ten bedrooms or more to increase their rental prices, only making crowding worse for all. Today there are 50,000 vacationers and 12,000 vehicles each week. My handout at the LUP November meeting included photographic evidence of the crowding. With 30% of Corolla yet to be developed it is only going to get worse.

Here are some solutions I hope you consider.  Please consider how these or other ideas might be best accomplished within the limits of the County’s authority.

Limit the “Occupancy” per acre for new development and remodeling– Property owners have a right to develop their property, but it is the County’s responsibility to ensure that development does not reduce the value of the neighborhood.  But County tax records show a trend to more than double the occupancy per acre for new development, significantly increasing crowding.  Consider setting the limit to the current average “Occupancy density” to cap the rate of crowding growth. 

Increase the setbacks required for larger structures – I think that the arguments over larger homes got us side-tracked over the last few years.  A large home on a large lot with “occupancy density” equal to the current average should be allowed.  (The infamous Black Stallion 20,000 SF home is on a very large 1.9 acre lot.)  The issues for large homes are the proximity to their neighbors and the nature of their commercial use.  In the past there have been several instances where a single large home caught fire, but the intensity of the flames and the proximity to neighbors caused multiple homes to be lost.  Increasing setbacks for larger homes reduces the radiant heat load on the adjacent homes and gives our fire department a better chance to at least save the neighbors. Larger setbacks also will mitigate some of the deleterious noise and traffic impact of large  “event homes.”

Limit conversion of COBX commercial property for residential purposes – Tax records show just over 400 acres of commercially zoned property, all in Corolla. This is the only commercial area on all of COBX and must serve 4,000 acres of residential area.  With half of the commercial area yet to be developed the focus should be on providing services and recreational options for our vacationer market.  Instead developers have taken advantage of the 60% lot coverage allowance on commercial land for high-density residential development making the crowding worse. Vacationers need more retail, restaurants and recreational services, not more bodies on the narrowing beaches or more cars on NC12 competing for the limited parking spots.

Impacts of New Home Construction or Remodeling Expansion

(2015 - presented to Commissioners and the Planning Director during discussion of Large Homes on COBX)

At the present time about 80% of residential area in Corolla has been developed.  The existing homes support a summer population of over 50,000 people resident on our 3.2 square miles of space, creating a population density equivalent to some of the most crowded cities in the US.  There are arguments that this level of crowding coupled with on-going beach erosion has weakened the natural attractiveness of Corolla as a vacation destination.  Thus, these effects have led to declining profitability for owners of rental property and been a major contributor to the sharp decline in property values.

As Currituck County government considers regulation of the remainder of Corolla development and future development of the off-road area they must consider two opposing factors and seek a reasonable balance. The first factor is the desire of a property owner to develop their land to their best economic advantage.  The second factor is the potential for a negative impact of that development on: adjacent property owners, the immediate neighborhood and the County as a whole.  

In Corolla the development trend is to build larger homes with more bedrooms and to build many smaller homes in close proximity on undeveloped lots. There is also a trend to add bedrooms to existing homes. Further, many rental properties are advertised and populated with sleeping occupancies in excess of their Health Department and Fire and Safety authorized limits.  These actions are aimed to extract greater rental income for the capital investment of their owners, but they also increase the population density with potential negative impacts to the rest of the community.  Most subdivisions have Restrictive Covenants (Covenants) that provide some regulation of development, but many of these Covenants date from the first platting of a community when many of these issues were not anticipated.  Given the high percentage of absentee owners in all communities it is difficult to make Covenant changes to impose limits.  Thus, much of the burden of keeping property values high falls on the County.

Given the important stake that mainland taxpayers have in the continued economic health of Corolla it is reasonable for the County to consider regulation to best protect taxpayer interests in any further development.  This paper is an attempt to capture the discussions of possible impacts of the trend and potential ways for the County to mitigate them.

The hypothesis is that development of the remaining 20% of Corolla and potential re-development of existing homes at densities above the current average density of occupants per square mile can further degrade the quality of the Corolla experience and thus further undermine the rental profitability and property values of other homes in Corolla.   Thus the positive impact of the increased taxes of new development may be more than offset by the decline in taxes from remaining properties.

The tables below describe the types of negative impact on adjacent property owners, the immediate neighborhood and the County as a whole; and the possible mitigation approaches the County might use to ensure net benefit of new development to the County as a whole.

Impacts on Adjacent Property Owners

The third area of the negative impact of higher density development in Corolla is on the County as a whole.   The County provides many services to this vacation community and over time has assumed responsibility for other services from developers.   It needs to be more widely understood that the provision of these services is very inefficient, and thus more expensive, for a community that has 50-60,000 residents for 3-4 months of the year and less than a thousand for most of the remainder of the year.

In particular, sewer and water service require expensive treatment facilities that must be sized to meet the anticipated peak demand.  Further, when the peak use reaches the peak capacity, either through over using existing homes, or by the expansion of the number of homes served, then additional capital investment is required to expand or build new facilities.   Some of these extra costs may be recovered through connect fees and pricing structures, but the County must invest first, deferring investment opportunities elsewhere in the County.