Overlay uncovers complex issues

By late Wednesday evening, agreement on the contentious issues surrounding “stealth dorms” and the proposed TCU-area zoning overlay seemed possible, if not likely.

That’s a far cry from where the matter stood only a few weeks ago, when residents, builders and investors were locked in a heated debate over whose property rights would reign supreme.

Residents have rightly argued that the five-bedroom, five-bath houses built ostensibly for students in neighborhoods zoned for single-family homes violate the spirit of the law. And that the transient and sometimes unruly student dwellers damage the character of the quaint old communities and reduce residential property values.

But investors and developers, who contend they followed the letter of the law, have said changing it mid-stream infringes on their property rights and causes economic hardship.

The dispute prompted the city to assemble a mediation group of neighborhood leaders; TCU students and administrators; investors, builders and Realtors; and other stakeholders to hash out a controversy the Zoning Commission wasn’t quite prepared to handle.

On Wednesday, many in the group appeared close to consensus not just on the overlay — which would reduce the number of unrelated adults allowed to live in a home in single-family zoning from five to three — but also on the question of whether existing rental properties will be grandfathered under current zoning laws.

Its expected recommendation is that the overlay should go forward with complete grandfathering. That means properties currently housing five unrelated individuals will be able to retain that privilege in perpetuity, unless the property is deemed nonconforming for two years.

Compromise is a good thing and a testament to the skilled leadership of city staff as well as the thoughtful nature of those assembled to sort out the problem.

But the proposed compromise uncovered several other thorny issues surrounding the overlay, many of which break in favor of the investors.

City staff explained how with a typical overlay, some properties become nonconforming — either by suspending rentals or by renting to fewer unrelated adults than were occupying a home when the overlay was proposed. They would lose grandfathered status and be subject to new zoning requirements. Over time, most properties would come into compliance.

But this proved problematic for several investors, who argued that the threat of nonconformity (renting to a family instead of five unrelated students, for example) incentivizes them to continue renting only to the maximum number of students. That might force them to discriminate against families or smaller groups of unrelated adults and open up owners to fair housing complaints.

That’s a serious issue, and one city officials said they would try to address in zoning language to protect investors.

Discussion on Wednesday also suggested that the grandfathering compromise might be over-broad — also to the investor’s benefit. While many TCU neighborhoods have shared concerns about the stealth dorms, they have manifested themselves differently from block to block.

Some communities, like Frisco Heights, have a large number of tear-downs, replaced by large five-bedroom homes built exclusively to house students. They would be incompatible for family use and too expensive for three instead of five students.

In other neighborhoods, owners have built additions to make homes more suitable for up to five adults. But they could still accommodate families. Those neighborhood leaders who still believe that grandfathering should have an expiration date have a good argument here.

Then there’s the issue of enforcement. Currently, the city relies on complaints to enforce zoning ordinances. Fortunately, both residents and developers agreed that rental registration would be necessary if grandfathering were to pass.

But if the proposed compromise is presented to the Zoning Commission as it currently stands, the investors and builders seem to be making fewer concessions than the residents.

Complete grandfathering will protect the investments of those who rent their property. It will also reduce competition, by restricting new five-person rentals from entering the market.

Setting an expiration on grandfathering is still worth considering. Thus far, most neighborhood residents have exhibited a willingness to be accommodating. The investors can give an inch, as well.

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