Charlotte’s biggest source of funding for affordable housing projects could soon run dry, as a City Council committee voted Wednesday to move forward with its biggest-ever round of new projects.
It’s the latest step in the city’s push to create or preserve 5,000 affordable housing units over three years, a goal City Council voted to adopt in the wake of the Keith Scott shooting and subsequent unrest last year. City staff said Wednesday that the city is almost halfway to that goal, though the total includes rehabilitated residences and down payment assistance for homebuyers, in addition to brand-new affordable units.
The allocations from Charlotte’s Housing Trust Fund that the committee voted to move forward with Wednesday will provide financing for 769 new, income-restricted apartments in five buildings, though the projects also need approval for federal low-income housing tax credits.
The aggressive approach to spending could build more apartments faster, but it will leave the fund almost fully depleted until after the 2018 elections, when voters have the chance to approve more funding. The fund, started in 2001, currently receives $15 million worth of voter-approved bond money every two years. Local officials have said the city should consider raising that amount drastically, possibly to $50 million, to fund more housing.
“This demonstrates the need for an increased bond allocation,” Pamela Wideman, Charlotte’s director of housing and neighborhoods, told the Housing & Neighborhood Development committee.
If approved, the five projects discussed Wednesday would receive $20.8 million from the Housing Trust Fund, leaving a $1.4 million balance. Council member Ed Driggs, who supported the proposal, pointed out that would leave very little money for developers looking to win funding next year.
“We will have depleted our resources with this,” said Driggs.
The trust fund provides equity financing for housing developers, effectively subsidizing the cost to build new apartments that are then restricted to people making a certain percentage of the area’s roughly $56,000 median income.
Affordable housing has been a more prominent issue in Charlotte in recent years, as both rent and house prices surge far faster than income. After the riots following Scott’s shooting death in September 2016, community members identified rising housing costs and displacement as some of the deeper-rooted issues behind the anger that boiled over.
There’s no quick fix, however. The increases in housing prices are being driven by the thousands of people moving to Charlotte, pushing up demand, and rising construction and land costs mean developers often have to charge more to satisfy their investors. And even if they all move forward, the new affordable housing units discussed Wednesday wouldn’t be available until around 2020.
Council member LaWana Mayfield, chair of the committee, called the plan “very aggressive.” She said the city should spend the bond money it has and then look to add more.
“For me, if we have it, spend it,” she said.
The full Charlotte City Council is scheduled to discuss the city’s affordable housing strategy and progress at a special meeting Monday afternoon. They’ll vote on the proposed Housing Trust Fund projects in September.
Here are details on the five proposed developments, along with how much money they would receive from the Housing Trust Fund:
▪ 2931 Mauney Avenue: A 72-unit development for senior citizens in Grier Heights. Developer Laurel Street Residential is seeking $3.45 million from the Housing Trust Fund.
Total project cost: $9.9 million.
▪ 2615 Freedom Drive: A 185-unit project called Movement on Freedom. Developer The Housing Partnership wants $4.5 million from the trust fund.
Total cost: $29.9 million.
▪ 5635 N. Tryon Street: A 204-unit development along the Blue Line light rail extension. NRP Group, an Ohio-based developer is seeking $5.1 million in city funding.
▪ 2200 Ashley Road: Called Vibrant Ashley Park, this would be a 108-unit development partially for senior citizens. Developer CapRock wants $2.1 million from the trust fund.
Total Cost: $14.3 million.
▪ 2349 W. Tyvola Road: A mixed-income development by Laurel Street Residential, this would include 200 units, some set aside for senior citizens. The developer is seeking $5.6 million from the Housing Trust Fund.
Total cost: $31 million.