City introduces first-ever incentive for workforce housing, closes mixed-use loophole

Arboretum West, a new development off Military Cutoff Road that replaced a mobile home park, consists of mostly residential development mixed with 4.5% commercial use. Like other recent apartment projects, the development took advantage of a loophole in the city’s development code. (Port City Daily photo/Staff)

WILMINGTON — Wilmington City Council voted 5-2 to introduce new requirements to its Commercial District Mixed Use (CDMU) development option in an effort to close an 18-year-old loophole.

In doing so, the city passed its first-ever affordable housing incentive.

Related: Developers latch onto 18-year-old loophole, city aims to close it


CDMUs now must include a minimum of 20% commercial development, with certain exceptions; before, there was no minimum.

The loophole allowed developers to build residential apartment complexes along major thoroughfares, with no limitations on density, so long as some portion of the property was commercial.

Because the city previously had no requirement for how much commercial space was required in a CDMU, recent developments featured between 1% and 4.5% commercial. Plus, apartment density tended to exceed what would have been allowed in a multi-family zoning district — the city’s intended district for this type of development.

CDMUs are permitted by right in three of the city’s zoning districts: office and institutional (O&I), commercial business (CB), or regional business (RB).

Given the lack of open space and commercial development requirements for CDMUs, developers pursued CDMUs for dense multi-family projects instead of seeking to rezone land to multi-family. Thus subjecting the projects to more oversight and city approval.

Developers may dip below the new 20% commercial minimum to 10%, if one quarter of a property’s perimeter fronts an arterial street. If a site is located within a quarter-mile of a full-service grocery store, commercial square footage may be reduced by up to 20% (for example, a 10,000 square-foot project required to build at least 2,000 square feet of commercial space may instead build 1,600 square feet, if it’s located next to a grocery store).

The new rules introduce a residential density cap of 17 units per acre — on par with requirements in the medium density multi-family zoning district.

This cap can be lifted entirely if at least 10% of residential units are designated as workforce housing, defined by U.S. Department of Housing and Urban Development’s high home rent ($776 for a one-bedroom and $966 for a two-bedroom in the Wilmington area). Workforce housing must be provided for at least 15 years.

This provision marks the city’s first incentive on the books to encourage affordable housing.

Councilmembers Neil Anderson and Charlie Rivenbark voted against the code change at the city’s regular meeting Tuesday. Anderson said the requirements imposed by the city did not adequately consider current market conditions developers face in Wilmington.

“I think we sit and look at these things, we analyze them in some world that does not exist. What about the real world?” he asked at the meeting.

Rivenbark said the requirements were too onerous. “Everybody puts the onus on the back of the developer. And it just doesn’t work. I think this is wrong,” he said.

Councilman Kevin O’Grady described the new requirements as an imperfect compromise. “We’re not going to see 20% commercial. We’re going to see something more like 10[%] after all of these reductions. But at least it’s better than what we’ve been seeing,” he said.

View the new rule below, with proposed amendments in red, and changes passed by the city Tuesday. Changes not adopted are reflected in strikethrough text:

CDMU – new rules on Scribd


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