× Expand Courtesy of Kane Realty

Developer John Kane’s proposed forty-story skyscraper seems to check every box for Raleigh’s downtown growth and density plans. The three-acre lot at the intersection of Peace and Harrington Streets sits along a planned bus rapid transit line with no single-family housing nearby. The tower would be anchored by first-floor retail space and include a parking deck, offices, and more than four hundred residential units.

It would loom over Capital Boulevard as the city’s tallest structure (the PNC building is thirty-two stories) and serve as a gateway to downtown.

But that doesn’t mean the city council will go for it, says council member Kay Crowder—even if Kane agrees to include affordable units in the project.

“They came and talked to me about it months ago, and I laughed,” Crowder says. “You always laugh when people ask for that much.”

The proposal comes as the council considers making affordable housing a bargaining chip for developers in rezoning applications, and could be the initiative’s first big test. State law prevents Raleigh from mandating inclusionary zoning—i.e., forcing developers to include affordable units as a condition of building—but what Raleigh is considering would be voluntary, at least technically: If you want to rezone, you can boost your chances by volunteering to build affordable units.

The city’s planning commission is reviewing Kane’s request to increase the height limit from twelve to forty stories, but the building hasn’t yet been designed, says Bonner Gaylord, a former council member and Kane’s managing director of operations.

While Kane would like to include affordable units, Gaylord says, it’s difficult to make that promise as part of a rezoning application. Kane needs the city to approve his application before he can start the multimillion-dollar design process. That, in turn, has to happen before Kane can approach financial backers.

Committing to an affordable component now, Gaylord says, could make it impossible to secure those financiers.

“It’s hard to commit to affordable housing before you get financing,” Gaylord says. “It could be a poison pill for a project that we don’t know we’re taking, but down the road, it ends up killing the whole project.”

Including affordable units could also drive up prices on the remaining units—“providing cheaper housing by making housing more expensive,” Gaylord says.

A forty-story project could have significant ramifications for utilities and traffic downtown, says planning commissioner (and former INDY columnist) Bob Geary. Adding an affordable component could be a way to mitigate those impacts, he says.

“I do think this is an appropriate case where we can have affordable housing units offered as a condition of approval, that would help it a lot in my mind,” Geary says. “If you’re going to allow that many people to live at one location, they should be at varying income levels. We shouldn’t follow the market here exclusively.”

Even so, he’s not sold yet on forty stories, and neither is Crowder.

While Crowder insists the council won’t use voluntary affordability as a “hammer” to force a developer’s hand—courts would likely view that as illegal—she says the council could take affordable units into consideration, along with things like traffic enhancements and parking.

“Forty stories is not a given,” Crowder says. “There would have to be a lot of community benefit for me to be open to forty stories where it is currently entitled to twelve.”

“If the voluntary condition is adopted, it will be a big test,” says council member David Cox. “As far as it being a bargaining chip, I don’t know. We’re in new territory with this voluntary condition.”

Kane isn’t the only developer eyeing high-density development in that part of downtown. Developer Bobby Lewis hopes to add a twenty-story hotel across the street from the new Publix on Peace Street, and another developer, whom Crowder declined to name, might ask for a forty-story rezoning just across Capital Boulevard from Kane’s project.

The North Central Citizens Advisory Council backed Kane's request in a 10–5 vote.

“Really, it comes down to taking areas that are already designated for transportation projects like [bus rapid transit] and putting people in places where they can benefit from those projects,” says Dylan Bouterse, a North Central CAC member who supports the project. “This is not old Raleigh anymore. It’s growing up, and we can't stop it from growing up, but we can encourage it to grow the right way.”

The planning commission will review Kane’s zoning request on April 23. A decision could come by June, according to chairman Rodney Swink.