Fort Worth’s proposed ordinance to restrict the number of unrelated adults who can live in a single-family home from five to three in TCU-area neighborhoods — and the possibility of not grandfathering existing properties — is facing stiff opposition from investors, Realtors and developers, who say it is a break of trust with the city.
Not grandfathering in some properties to allow the practice to continue, as some City Council members have proposed, is an infringement on property rights and is an economic hardship on the owners, said a group of investors and Realtors representing over 300 properties in the overlay. The investors, many of whom also live in the proposed overlay area, have pooled funds to hire an attorney to represent their concerns in the zoning case.
“We did it how they said to do it,” Kyle O’Keefe, an investor and resident in the overlay, said of the homes they built. “If they go back and change it, that is a break of trust. That is saying, ‘Hey, you guys come in and invest in our city make it a great city and then we are going to screw the hell out of you in a couple of years.”
O’Keefe, who has three young children, said the investment properties are his livelihood and reducing the occupancy without grandfathering will greatly reduce his monthly income and negatively affect the property value of his houses.
The overlay is an attempt to curb what some call “stealth dormitories” — large, five-bedroom houses built by developers in the historic neighborhoods that typically rent to college students — and other neighborhood concerns like traffic congestion, crowded parking, noise complaints and trash.
Dana Burghdoff, deputy director for planning and development, said only a minority of residents are OK with the existing properties being grandfathered.
Greg Jackson, president of the Berkeley Place Association, said area residents are “overwhelmingly in support of the overlay” to protect the historic integrity of the area.
“We have a concern that as the university grows and as there are less options for housing, that either more of the existing homes within our neighborhood would start to be leased to students or have a situation where an older home is torn down and one of theses stealth dorms built it their place,” Jackson said.
“We want to prevent what has already happened to some neighborhoods near TCU from happening,” he said, referring to neighborhoods like Frisco Heights, which has had 66 residential demolition permits issued by the city since May 2004.
All the neighborhoods surrounding TCU were included in Historic Fort Worth’s Most Endangered Places list for 2014 because of the rapid development, which has knocked down entire blocks of homes.
Jackson’s neighborhood association voted unanimously against grandfathering.
“If those properties were allowed to continue to operate as is, those exceptions are going to swallow up the rule of this being in place to protect us,” he said.
A ‘lose-lose situation’
The proposed ordinances being presented to the Fort Worth Zoning Commission on Wednesday include options for grandfathering with no time limit, grandfathering expiring in 2029 and no grandfathering, which would require existing properties to come into compliance by June 2016.
All of those options are a “lose-lose situation,” said Jon Samson, executive vice president of the Greater Fort Worth Builders Association, who said both grandfathering and not grandfathering is “dangerous one way or the other.”
Not grandfathering “tramples on individual property rights” and leaves the city exposed to legal suits, he said, while grandfathering creates an unhealthy real estate environment, throwing home values out of whack within the same neighborhoods and limiting rental competition, which could drive up rents.
Samson said the builders association is against the overlay because it is largely unenforceable, is discriminatory in targeting a small area of town and creates a disparity, but said if the city moves forward with the occupancy restriction it should be citywide and not allow grandfathering.
The overlay — which currently encompasses the single-family zoned neighborhoods of Frisco Heights, University Place, Paschal, Bluebonnet Place, Bluebonnet Hills, Westcliff, Westcliff West, Colonial Hills, Tanglewood, University West, University Place, Park Hill, Park Hill Place and Berkeley Place — would just force the development to the outer rim of the boundary, Samson said.
“It doesn’t solve the problem. It displaces the problem to other communities,” Samson said.
Federal search and seizure laws will also limit the city’s ability to enforce the occupancy restriction, he said. And he is concerned the habit of college students keeping their parents’ addresses on their official identifications will make occupancy restrictions even more difficult to enforce in the overlay than in other parts of the city.
“We believe there needs to be more engagement with the stakeholders, that this is a good start to trying to find a resolution to this, but we don’t think this is a practical solution to address concerns,” he said.
Mayor Betsy Price, who lives near the proposed district and said she has TCU students living behind her, has “sympathy for the neighborhoods.”
“But I don’t know how we would legally go in and take away that livelihood,” Price said.
“I believe we are going to have to have some type of grandfathering. We have done a lot of listening and we still have a ways to go,” she said.
Investors speak out
Many of the investors not only followed the city ordinance, which does allow five unrelated people to live in a house together, but many were also given tax abatement agreements with the city for building in a Neighborhood Empowerment Zone.
The agreements include information like how many other properties the investor owns, if the property will be a rental or owner occupied, how much money the development will cost, and how many bedrooms and baths are included.
“The city went even further than just saying you can build the properties,” O’Keefe said. “The city put in Neighborhood Empowerment Zones and said, ‘We want you to build. We are going to encourage you to build. We are going to give you an abatement.’ And now they are turning around and saying, ‘Wait a minute, we don’t want you to do this anymore.’ That is just criminal.”
In addition, the ordinance does not accomplish the goals of protecting the neighborhoods, said Tom Diamond, a Realtor in the TCU-area. It does not address why types of structures can be built, which means older neighborhood homes can still be torn down and replaced by a home that does not fit the character of the neighborhood.
“This doesn’t curb development. If a developer wants to come in and build a three-bedroom property that is a monstrosity, they can still do that. This ordinance hasn’t done anything to address the development,” Diamond said.
Jerre Tracy, executive director of Historic Fort Worth, said the overlay is a good start to protecting the neighborhoods, but historic overlays or historic districts would better protect the character of the neighborhoods.
The other neighborhood concerns, like excessive noise from partying, trash in the yards and illegal parking, are all code compliance issues and are the city’s responsibility, O’Keefe said.
“It is also not a big surprise that you live next to a college campus,” O’Keefe said. “The university was here before any of us were. The deal is, if you move here you should know there are going to be college kids. It should be an expectation.”
Diamond also worries about the city’s ability to enforce the restriction.
“Code Compliance has already said, ‘Hey, we can’t even go look at the exterior of the properties.’ And now they are asked to find leases, property inspections, identifications — how is that going to work?” Diamond said.
Case moves forward
Still, most neighborhood residents say the overlay is a good first step in protecting their biggest investment — their homes.
“They [investors] knew they were bringing an unwelcome dormitory-type house into an existing single-family home neighborhood. The homes they built were single family in name only. They were fully intended to house five or six students,” Jackson said. “It is a little disingenuous for them to take the stance they have taken.”
O’Keefe and others want the city to do an impact study before imposing the restriction, to look at how it would affect home values, the rental structure and how it would affect development on the outer rim of the overlay, but Burghdoff said the city does not intend to conduct such a study.
“I expect we’ll hear from property owners and residents on their experiences after the overlay district is implemented, and that may influence City Council action in the future,” she said in an email.
That worries O’Keefe.
“Why wouldn’t the city do their homework? Why wouldn’t they due the diligence to find out what the real impact would be?” O’Keefe said.