Alex Goode has lived at Sharon Oaks Apartments for 16 years, and has seen six management companies come and go. In recent years, every new manager has meant rent increases.
So when he read in the newspaper that two real estate firms were using a subsidy from the city to purchase and renovate the apartment complex and keep rents affordable, he was hesitant. His monthly rent is already $820, which he says isn’t cheap but is less than what he might pay elsewhere in Charlotte, where the average rent is just over $1,200.
“They say they’re going to keep it affordable,” he said. “I don’t know what that means.”
Earlier this month, Ascent Real Estate Capital and Laurel Street Residential, an affordable housing-focused developer, purchased the apartment complex for $8.2 million, with the help of the city’s Housing Trust Fund. It’s part of a new strategy to preserve existing affordable housing, known as “naturally-occurring affordable housing,” rather than spending money on a new development.
Residents of the apartments, just off of Independence Boulevard on North Sharon Amity Road, say repairs are long overdue. But some worry that renovations could mean higher rents.
A new strategy
In February, Charlotte’s City Council voted to allocate $2.1 million from the city’s Housing Trust Fund to subsidize the renovation and rehabilitation of the apartments. Voters approved $50 million in Housing Trust Fund bonds last fall. But this project marked the first time the city had used the money to help a developer acquire an existing building.
The city is spending $21,429 per apartment to renovate units. In return, the firms agreed to keep most of the units affordable for 15 years using deed restrictions.
Of the 98 units, 48 will be available to households earning 60 percent of the area median income, 10 units for 50 percent of median income and 20 units for 30 percent. The other 20 will be offered at market rate.
Mecklenburg County’s median household income is around $59,000, according to the most recent census estimates.
Mark Ethridge, a partner at Ascent, said the rents already are equivalent to about 50 to 60 percent of median income, so they do not plan to raise rents for current tenants.
“We want to make sure that no one is displaced at the property,” he said.
But they also do not plan to lower the rents. The units set aside for those earning 30 percent of area median income will be made available for those with housing vouchers. The waiting list for such vouchers can be years long, and few landlords are willing to accept them, the Observer has reported.
The strategy is aimed at preserving housing that might otherwise follow a pattern happening all over Charlotte: developers purchase older buildings and either tear them down or renovate them and raise rents. The city has said there’s a shortage of around 30,000 affordable housing units.
Goode pointed to a green color covering the bricks on the steps up to his building in the complex: it was mold, he said. But he said the previous management hadn’t done anything to address it.
The planned repairs include replacing roofs, sidings, balconies, water heaters, carpeting and appliances, Ethridge said.
Residents welcome the repairs to the complex, which was built in phases in the 1960s and the 1990s. Resident Cindy Barringer said despite the $40 rent increases she’s faced every year, she hasn’t seen any renovations on the property. Barringer pays $840 a month for a two-bedroom apartment, where she lives with her husband and 6-year-old daughter.
“The rent is going up and there’s nothing given to the tenants,” she said.
Still, she’s uncertain about the promise to keep rents affordable. She said previous landlords have shown that they only care about money, not the tenants.
Ethridge said the new property managers will be communicating with residents over the next few months, and will make clear that they’re not planning to displace anyone.
“Because renovations of properties typically are correlated with rent growth and displacement, we can certainly understand the uncertainty,” he said.