Development reporter Ely Portillo on his 2018 predictions, the apartment boom and why beige buildings may be on the way out
The CharlotteFive Podcast team decided to try to take a look at Charlotte development in the year ahead, so we brought on Ely Portillo, the Charlotte Observer’s growth and development reporter.
Please click and listen to the full interview with Portillo right below. Farther down are some small excerpts of what was talked about on the podcast.
When it comes to development in Charlotte, 2018 will be the year of ___ ?
“More apartments. I think right now the number one question in the development community and in Charlotte is how long is this boom going to go? Because it’s very long already. It’s been years of solid consistent growth. If we were just basing our predictions on past economic cycles, we’d probably be due for a slow down of some kind. That’s not at all what’s happening in the market and people I talked with are very excited about 2018, expecting it to be even better than 2017 for everything from rising home prices to apartments being built. It’s kind of full speed ahead right now.”
While growth is beneficial for the developers, who is seeing the more negative side of all of this?
“The flip side of it, where there is more pain and uncertainty, is if you are trying to buy a house, that is really tough right now. That is a very stressful proposition in a market like Charlotte. Charlotte was just named the fourth fastest growing housing market in the U.S. That’s ahead of places like Austin, which has nationally been a huge growth story for the last few years. The median price [of a house] is up 9 percent, so somewhere around $230,00, I believe. Just in 2012, the median price was around $165,000 in Charlotte. That’s a pretty big increase for five years, somewhere around 45 percent.”
The cost of renting an apartment has gone up too, correct?
“Right. So, if you’ve driven around Charlotte for about two minutes, you’ll see apartments under construction everywhere. People always ask me, ‘Aren’t we building too many apartments? Aren’t we going to have a huge apartment market crash?’. What underlies all this is something I find surprising – the apartment vacancy rate in Charlotte is basically the same this year as it was last year. So that means despite all these thousands of new apartments coming into the Charlotte market, we still have the same proportion vacant. So that tells you that these new apartments being built are filling up quickly and that developers are largely able to get the rent that they want.”
How far off is Charlotte when it comes to the amount of affordable housing in the city?
“If you look at the projections over the next few decades, the best estimates say that Charlotte will be several tens of thousands of units short of what we need for affordable housing. Now that doesn’t mean we will have tens of thousands of people living on the streets. What it does mean is a lot of people (are) paying a huge share (of) their wages for rent and they are not able to save or plan for anything unexpected. It means that there are families doubling up, in some cases. People sleeping on an aunt’s sofa. People who are living in their car for a short period of time or moving away from where they work.
“Charlotte is certainly not unique in this area. Basically every growing city is really struggling with this right now and if you look at some places in California, New York, D.C. — the statistics for affordability are way worse than they are in Charlotte. I think that as the city continues to grow, if the development continues to be focused on the high end luxury apartment, highest end houses, then yes, we are going to continue to see an increasing squeeze on people who are not making those highest end incomes.”
What’s going on with all the beige buildings? Will that change?
“So Charlotte really gets knocked a lot for being a boring looking city and especially places like South End, where there is just a ton of growth and a lot of it looks very similar. Lot of the same five story, wood framed apartments, similar designs, similar colors, lot of beige. One of my predictions this year is I think you will see that start to change a little bit.
“Crescent Communities, if you go up to NoDa and the 36th Street light rail station, they’ve just built a new apartment building there and they put a huge mural on the side of the parking deck. It actually looks pretty cool. There are a lot of apartments in Charlotte that have a lot of blank parking deck walls and blank sides that you could see more of that [art] on.”
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The CharlotteFive Podcast — presented by The Charlotte Observer and powered by OrthoCarolina — is a weekly podcast that aims to get you Charlotte Smart, Fast with fun, interesting and useful news about the city. It’s co-hosted by Sean Clark-Weis and Sallie Funderburk and is a production of the Charlotte Observer and 2WAVES Media.
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This story was originally published January 16, 2018 at 11:00 PM with the headline "Development reporter Ely Portillo on his 2018 predictions, the apartment boom and why beige buildings may be on the way out."