Development

Does Charlotte have enough in its ‘toolkit’ to reach affordable housing goals?

Cherry neighborhood representatives hold signs up in favor of affordable housing at Monday night's zoning meeting, March 16,2015.
Cherry neighborhood representatives hold signs up in favor of affordable housing at Monday night's zoning meeting, March 16,2015. rlahser@charlotteobserver.com

Charlotte City Council upped its goals for new affordable housing in the wake of sometimes-violent protests over the police shooting death of a black man last month that highlighted socioeconomic disparities in the city to 5,000 units in three years.

The question at a forum this week on affordable housing strategies: Does the city have what it takes to get there? And even if Charlotte reaches that goal, will it actually resolve underlying issues?

“Housing prices are increasing,” said Ashley Williams-Clark, a UNC Charlotte researcher, driven by Charlotte’s rising population and strong demand for places to live. “And wages aren’t keeping pace with those housing costs.”

A new report from the UNC Charlotte Urban Institute (PDF here) recommends 12 strategies to increase the supply of affordable housing. Some of them aren’t currently allowed under state law (mandating a certain percentage of affordable units in all new apartment developments, for example), and others could be done now (giving developers breaks on zoning and permitting fees if they include affordable units).

Here are some of the strategies the researchers went over that could be used to stimulate more affordable housing in Charlotte:

▪ Mandatory inclusionary zoning and impact fees: Neither of these would be allowed under state law. The inclusionary zoning would require developers to set aside a set percentage of new units as affordable, and impact fees would charge a fee on non-residential development to subsidize affordable housing.

Mayor Jennifer Roberts pointed out the city is barred from requiring new units as part of the rezoning process, but can remind developers of its goals.

“We cannot legally say you have to do X amount (of affordable housing) or we’re not approving,” said Roberts. “As they work with us, they can do the right thing, but they don’t have to. If the zoning does not get approved, that can’t be the reason.”

▪ Expediting permits, zoning and reducing fees for affordable housing: Williams-Clark said one of the most consistent things they heard from developers while studying affordable housing was that the process to get new housing built takes a long time and adds costs.

“The rezoning process added a lot of costs for developers, and those costs were unpredictable,” she said. The same applies for permitting. The city could implement a system for speeding up permits and reducing or waving some development-related fees.

▪ A community land trust: This is a structure in which a trust owns land and sells the houses on top of it to homeowners, who agree to restrictions for how much they can resell the house for. That limits the appreciation of the houses and prevents the land from skyrocketing in value and attracting gentrification. These could be legally used in Charlotte.

Another question that came up was whether the “workforce housing” arrangements with developers that have been announced will make a dent in the problem long-term. At projects under development such as Brooklyn Village uptown and the River District west of Charlotte Douglas International Airport, developers have agreed to include nearly 200 “workforce housing” units. Those generally target people making 80 percent of the area’s median income (AMI).

In Charlotte, that comes out to $53,600 for a family of four. At 60 percent of AMI, that family’s income would be about $40,200 – a significant difference. A full-time minimum wage worker would earn just about $14,000 a year, well below the target for workforce housing.

And officials at the forum emphasized that the city’s goal of 5,000 affordable units doesn’t mean 5,000 new affordable units will be built. For one, the city doesn’t develop housing, so it will need to partner with private developers. And even if it did, officials acknowledged it’s unrealistic to build so many units so quickly – even though estimates have put Charlotte’s long-term need for affordable housing at about 34,000 units.

Instead, the city will also count housing units that are preserved, kept from demolition or rehabilitated to be habitable again towards its goal of 5,000 units, not just new construction.

Ely Portillo: 704-358-5041, @ESPortillo

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