In the wake of protests that started against a police shooting and grew to encompass inequality in jobs, schools and especially housing, there’s increasing recognition that Charlotte has a growing affordability problem: The city’s average apartment rent is up 35 percent over the past five years, to $1,052.
And there seems to be more of an appetite for building affordable housing in the city, since almost all of the 25,000 or so apartments under construction in the Charlotte region are market-rate units targeting affluent renters.
What people don’t agree on is how to get there: Loosen regulations, or impose more requirements?
Both ideas have been advanced by different constituencies – homebuilders and affordable housing advocates. Now, a first-of-its kind report from the White House recommends cities loosen their land-use rules to increase the supply of housing and drive down its price, while also considering affordable housing mandates.
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At the Charlotte Chamber’s planning retreat Tuesday in Asheville, two of Charlotte’s most prominent leaders, former Bank of America chairman Hugh McColl Jr. and former mayor Harvey Gantt, said they would support a local ordinance requiring developers to set aside a certain percentage of each new project as affordable units.
“I’d like to see that made a city ordinance that you have to build,” said McColl, one of the main architects of Charlotte’s rise. He joked that he knew his friends in real estate “would shoot me,” for voicing his support for such an idea, which no doubt would be fiercely contested.
“If you’re going to build 150 units, at least 15 of them should be affordable,” Gantt, who was the city’s first black mayor when he was elected in 1983, said at the Chamber forum.
So, would such an idea work in Charlotte? The biggest problem is that North Carolina law doesn’t currently allow municipalities to set such rules locally, as some other states do. So if Charlotte were to enact such an ordinance, it would be swiftly challenged in court.
That’s what happened in Davidson, which tweaked an ordinance last year requiring 12.5 percent of new units in any development be set aside as affordable housing. After a homebuilder sued, Davidson changed the law to allow developers to opt out of the requirement by paying the town $26,000 per price-controlled home they would have had to build under the ordinance.
It would take a change in state law to allow mandatory inclusionary zoning, as such ordinances are known.
“The state really regulates that,” said Fulton Meachem, CEO of the Charlotte Housing Authority.
“It would not be permitted under North Carolina law. It also wouldn’t solve the problem,” said Joe Padilla, executive director of the Charlotte-based Real Estate & Building Industry Coalition.
White House takes aim
Most major U.S. cities are feeling the pinch of rising rents, as more and more people want to move to walkable, dense, central urban locations. Skyrocketing rent in places such as San Francisco, New York City and Washington, D.C. has pushed many service workers and low-income tenants out of those cities and farther from jobs and transportation.
Nationwide, about half of renters pay more than 30 percent of their income towards rent, making them “rent-burdened.” It’s a statistic that’s mirrored in Mecklenburg County, where 46 percent of tenants are rent-burdened. The growing problem led the Obama administration to issue an unusual report last month recommending changes to increase the supply of housing and lower its price.
“The growing severity of undersupplied housing markets is jeopardizing housing affordability for working families,” the report said, adding that it hurts low-wage workers by forcing them to live far from jobs and endure long commutes while pricing their children out of good schools.
Zoning regulations and a “not-in-my-backyard” mindset often block, or make it much more expensive to develop, multifamily, affordable and dense housing. And the cumulative effect of thousands and thousands of individual zoning fights played out every year, nationwide, is making housing more expensive for everyone, the White House said.
To increase the supply of housing and lower its cost, the White House recommends that cities like Charlotte speed up zoning and permitting processes, ease restrictions on what can be built where and allow more developers to build without going through the months-long and costly process of rezoning land.
And while the White House report recommends using inclusionary zoning policies, it doesn’t specify whether those should be mandatory or voluntary.
The recommendations amount to a bet that builders and developers will respond to looser regulations and a more streamlined building process by creating more new housing, lowering the price for everyone.
So what does this mean for Charlotte? The city is overhauling its zoning code to streamline the process and allow developers to build more easily, without as many of the painstaking, case-by-case zoning fights that occur now. But rewriting the ordinance isn’t expected to be complete until 2019.
Until that’s finished, developers and city leaders hoping to encourage more affordable housing must operate within the existing framework. In response to the protests, Charlotte City Council members said last week they hope to build 5,000 new units of affordable housing over three years, accelerating plans to do so by two years.
The city can subsidize construction with money from its Housing Trust Fund, but lets private developers take the lead on building affordable housing. City Council is also considering loosening its policy on where subsidized housing is built, which could make it easier to build but also lead to more concentrations of low-income housing.
Meanwhile, affordable housing experts have estimated the region needs about 34,000 more units to keep up with demand.