PRESS RELEASE: March 30, 2007
Storm-water proposal may carry hefty price tag
Charlotte Business Journal - March 30, 2007
by Collin Brown, Guest columnist
If you're involved in real estate and you haven't been keeping up with Charlotte's effort to control storm-water runoff, it's time to start paying attention.
The Federal Clean Water Act is forcing local governments to reevaluate their permitting processes and adopt regulations to lessen the potentially negative environmental impact of land-development activities.
Unlike current storm-water detention requirements that focus on controlling the volume of runoff, the new standards would seek to improve the quality of storm water. The proposed ordinance is also broader reaching. Its standards will apply to single-family residential development as well as redevelopment projects.
The draft ordinance is the result of many months of work by public employees and a Post-Construction Stakeholders' group made up of citizens and representatives of interest groups ranging from the Sierra Club to the Real Estate and Building Industry Coalition. It will soon be considered by the Charlotte City Council.
Although the draft ordinance has yet to be adopted, the rezoning process can give a glimpse of what's coming. Most rezoning petitioners receive a memorandum of requests from the Charlotte-Mecklenburg Storm Water Services department.
Those requests have unfamiliar language such as "Construct a BMP to achieve 85% TSS removal for the entire post-development runoff volume for the runoff generated from the first 1 inch of rainfall."
For those of us who aren't engineers, that means the department would like the developer to build a miniature water-quality system on its property. The system should be engineered so that when it rains, storm water running off buildings and other hard surfaces such as parking lots and sidewalks is routed through this system, which is referred to as a best management practice (BMP).
The system will filter out sediment, pollutants and other matter that's carried by rainwater and would otherwise flow into nearby streams.
The staff requests the system be engineered to remove 85% of those floating particles, or total suspended solids (TSS), from the amount of runoff generated by the first inch of rain.
Once the rezoning petitioner has translated the jargon of the Storm Water Services' request, the next question is always: "OK, what will that cost?" That's when the screaming starts.
The final report from the stakeholders' group had an analysis of the costs of implementing the ordinance. That report, issued in September 2005, estimated a cost of $16,000 to $33,000 per acre to implement the recommendations for most land uses in Mecklenburg County. The analysis included the cost of required open space, operation and management expenses as well as design, engineering and construction.
In Charlotte, compliance with those standards is voluntary, but within a matter of months some version of the standards will be mandatory. The impact on the real estate community will be sudden and profound. By some estimates, the cost of land development will increase 10% to 20% overnight as a result.
Mecklenburg County's Land Use and Environmental Services Water Quality Program has done a commendable job of attempting to estimate the costs that will be borne by the development community. Staffers recently conducted case studies on several sites to determine how a site's layout and development costs would change.
The research revealed impacts varied greatly depending on the presence of streams, undisturbed areas and existing storm-water systems.
Some financial impacts were relatively low. In fact, one project would have incurred no additional costs. However, the results on the other end of the spectrum were alarming.
One of the most striking cases involved a 24-lot, single-family residential development. The project had 12.8 acres, and homes in the community averaged $300,000.
Under the ordinance, enhanced streamside buffers would be needed, which were the greatest contributor to the increased cost. Under those conditions, the number of developable lots fell to 17 from 24. The analysis factored in the opportunity cost of the seven lots and the costs of the required storm-water controls. It concluded compliance would cost $32,500 per acre, or $24,500 per lot.
The estimate, though, didn't include long-term costs associated with management and operation of the systems.
Anyone thinking higher costs are only a problem for developers should consider the impact on housing prices. In that example, the average home price would increase to $325,000 from $300,000.
Such a cost increase may be palatable in higher-end developments, but consider the potential impact on work-force housing.
It's hard to argue against the benefits of adopting standards that are intended to improve the health of our watersheds and streams. City and county staff members are passionate about that effort, and their concerns about the environmental impact of inaction seem credible and persuasive.
But the costs of implementation may have a crippling effect on the real estate community and related industries.
It's up to City Council to decide whether the benefits of the proposal are worth the impact on the private sector. We can only hope that our leaders can find the right balance.
Collin Brown is an attorney at Horack Talley and can be reached at (704) 716-0804 or cbrown@horacktalley.com.
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