In an effort to disperse affordable housing, the Charlotte City Council is close to approving a policy that would allow developers to build more residential units if some are set aside for middle-income workers.

The city has long tried to break up subsidized housing, which is often clustered west, north and east of uptown.

The new “density bonus,” as it’s known, would be reserved for parts of the city where the median home value is $153,000 and above. That would eliminate much of the city from the program, and would only allow the bonus in south and southwest Charlotte and a few neighborhoods in the northeast and northwest.

For prospective buyers, the affordable units would be reserved for people making 80 percent or less of the area’s median family income, which is about $54,000. For renters, the new units would be reserved for those earning 60 percent or less of the area’s median income.

“This is the fireman, this is the teacher, this is the police,” said Pamela Wideman, the city’s housing director.

In exchange for building affordable units, developers would be allowed to build extra market-rate units. If the program works, the profits from the additional units would cover the cost of building the subsidized homes.

The Charlotte City Council held a public hearing on the proposal Dec. 17. It is scheduled to vote on the plan next month.

If approved, the policy could be a small step toward dispersing subsidized housing, which has long been a goal of city staff and Mayor Anthony Foxx.

The city has a surplus of workforce housing, according to a recent consultant’s report. But its goal is to place such housing in areas where there is little or none, such as south Charlotte.

Liz Clasen-Kelly, associate executive director of the Urban Ministry Center, said the density bonus could be an effective way to spread out affordable housing.

But she said the plan – which targets so-called “workforce housing” – doesn’t help the people whom a city consultant said need help the most: the chronically homeless and others making under $16,000 a year.

“Capacity is a greater need,” Clasen-Kelly said. “But this can be a piece of the puzzle.”

Earlier this year, the Urban Ministry Center opened Moore Place off of North Graham Street. The development’s 85 apartments are for people who are chronically homeless.

In October, Atlanta-based Noell Consultant Group told the city that Charlotte’s greatest need is to find housing for its poorest residents. The consultant said the city has a shortfall of more than 15,000 units for those earning less than 30 percent of the area median income.

The consultant said the city had a small surplus of housing units – roughly 10,000 – for people earning more than 60 percent of area median income.

Jamie Banks, of the city’s Neighborhood and Business Services department, acknowledged that the density bonus won’t help the city’s most vulnerable people. But she said city staff are working on a number of other programs – such as a rental subsidy program – to build housing for those residents.

“You have to have several different tools,” Banks said. “This is one way to get the development community to voluntarily provide housing through the density bonus. It’s a start.”

Providing opportunity

Spreading out affordable housing has long been a vexing problem for Charlotte and other cities.

During his three years as mayor, Foxx has shied away from requiring developers to include affordable units in all projects. Such mandatory zoning has been used in places sparingly nationwide, though the affluent Washington, D.C., suburb of Montgomery County, Md., has had a mandatory affordable housing program since the 1970s.

Foxx, a Democrat, has said he hopes to offer developers incentives instead.

One such incentive is the density bonus, which would allow developers to build more units in exchange for including affordable apartments, condos or houses in their developments.

The proposed density bonus could be used in areas with residential zoning that allows three, four, five or six housing units per acre.

Wideman said an example would be a 10-acre site in which a developer would be allowed under current zoning to build a total of 30 housing units, or three per acre.

The bonus would allow for a developer to build 10 additional units, with five set aside for workforce housing. The other five additional units could be for anyone and sold at any price.

The requirements on affordability would end after 15 years.

Joe Padilla, executive public policy director of the Real Estate and Building Industry Coalition, told council members the new density bonus will provide more opportunity in areas where demand “puts rents out of reach.”

City council member John Autry, a Democrat, represents east Charlotte, where much of the city’s low-income housing is clustered. He said he favors the density bonus and believes council members will approve it.

“Will this solve all of the problems? No,” Autry said. “But it’s one tool for those who want to participate.”

Other efforts

The new density bonus could disperse affordable housing, but politics among City Council members could make it difficult to keep building low-income apartments.

In June, the City Council and Foxx failed to agree on a nearly $1 billion capital plan, which would have included $60 million for affordable housing through the end of the decade. This fall, Foxx asked that council members start budget talks early, but council members voted Dec. 17 to postpone any budget talks until the spring.

It’s possible that the deadlocked council might not approve a capital plan in all of 2013. That could deplete the city’s Housing Trust Fund, which is used to build affordable housing.

In October, the City Council indicated it might revoke a waiver used to encourage the construction of housing for seniors and chronically homeless, giving council members more control over where such special-needs housing can be built.

The idea was that if a developer or charity needs a council-approved waiver to build a facility for the homeless, the public outcry might be so great as to paralyze any construction. Removing the waiver could make it harder for those projects to be built.