As developers race to build apartments across Charlotte, the new buildings have something in common: They’re almost all upscale units catering to young professionals.
And in many cases, they’re replacing older, more affordable apartments, straining families who have to move out.
It’s not a problem unique to Charlotte. Rising rents have been outpacing wages and inflation nationally, as more people rent and the homeownership rate keeps falling. Developers are responding to market demand, building high-end apartments that rent for a premium.
“Developers will build to the demand. There’s huge demand at the higher end of the market,” said Stockton Williams, executive director of the Urban Land Institute’s Terwilliger Center for Housing.
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In Charlotte, the issue is two-pronged. First, most of the 10,400 or so new apartments being built are studio, one- or two-bedrooms that cost more than many lower-income families can afford. Charlotte-based Real Data estimates rent as a percentage of the area’s median wages has risen from 19 percent to more than 22 percent in the last five years.
For the newest apartments, those less than five years old, the proportion has risen even more, from 22.7 percent to almost 30 percent of the median wage. And the percentage of two-bedroom apartments priced under $800 a month has fallen from 57 percent in 2011 to 32 percent this year.
Second, older, more affordable apartments have been torn down or are planned to be demolished. Many of those apartments, from the 1970s or 1980s, are in booming neighborhoods that now present an attractive opportunity to redevelop and cater to urban-dwelling millennials.
It was like someone taking you in a plane without a parachute and throwing you out.”
Angel Danies, who had to move out of Silver Oak apartments.
Strain on those who move
Raquel Lynch, chief program officer for Crisis Assistance Ministry, said people who live in older units that are redeveloped often end up becoming her charity’s clients.
“When I drive by and see those new apartments, I wonder where those individuals who were asked to move go,” said Lynch. “It’s one less option for families...for affordable rent.”
Developers have filed plans to tear down the Colony apartment complex in SouthPark, Melrose Place and Abbey Place apartments off of Park Road, and the Carmel on Providence and Pinehurst Providence apartments on Providence Road.
Last year, Charlotte-based Goode Properties tore down the Silver Oak apartments on Monroe Road and started building Meridian Place, a mixed-use development that will include 260 new apartments, a grocer, retail and office space.
The pulled together groups such as Crisis Assistance Ministry, Community Link and Charlotte Family Housing to help the approximately 300 families living in decades-old Silver Oak find a new place to live. But for families who relied on the low rent, easy access to bus routes to jobs and a nearby library, the transition was still jarring.
“It was like someone taking you in a plane without a parachute and throwing you out,” said Angel Danies, 33. He and his wife moved from New York City to Charlotte seeking a lower cost of living, and were getting by on his work doing maintenance and painting and her job in a call center. They have four kids, and were paying between $600 and $700 for a two-bedroom unit at Silver Oak, Danies said.
“We was living check-to-check,” he said. “We had to pack everything up.” With help from East Baptist Church, they were eventually able to find another place to rent farther out, on Idlewild Road.
Developer Roy Goode said the area around Monroe and Idlewild Roads still has a good supply of affordable housing. But he said the problem of insufficient options for lower-income renters isn’t new.
“We’ve always had an under-supply of workforce housing,” he said. Goode said more partnerships of government and private developers will be needed to address the issue. “For that gap to narrow, there’s got to be some public involvement.”
More affordable units will be needed
Some cities have tried imposing affordable housing requirements to ease the crunch, a move that developers have generally opposed. Nashville, for example, is considering a measure that would require new residential developments to include 14 percent affordable or “workforce” housing.
Williams, like many in the development community, favor looser zoning and other regulations to stimulate building, raising the supply of apartments and thus decreasing rents. They also support expanding a federal tax credit for building low-income housing, which developers can use to build such units.
Charlotte’s record apartment-building boom might check rent growth. Real Data estimates that though the average rents will increase 2 to 2.5 percent over the next year, rent increases could slow as more new units flood the market.
Fulton Meachem, CEO of the Charlotte Housing Authority, said his agency is building 404 affordable units in the city, with about 200 more in the pipeline. But estimates are the city will need 40,000 additional such units by 2050 – a strain that could be made worse as less expensive, older units are redeveloped.
“I think it’s a good thing that our housing stock is going up and it’s good for the economy,” Meachem said of the current boom.
But, “There’s no question there’s an impact on affordability,” he said.
Earlest Brown, 40, also moved out of the Silver Oak apartments, where she said she had been paying $765 a month for a three-bedroom. Brown, who has four children, said she couldn’t find another comparable apartment to rent. Struggling to find a job, she was eventually evicted earlier this year from another complex.
Since then, she’s found work at the front desk of an uptown hotel, but she and her children are living out of motel rooms, Brown said. She said she can’t get a deposit saved up, and having an eviction on her record makes it more difficult to find a new apartment.
“I’m in a never-ending cycle,” said Brown, who has also received help from East Baptist Church.
She said the new apartments going up around town aren’t meant for her and her family.
“They’re really catering to young, recent college graduates,” said Brown. “These new places, you can’t even get a one-bedroom for $900.”
“I think that someone needs to build something that's affordable.”