Almost half of Charlotte renters are 'cost burdened,' study finds

The Gibson apartments under construction at Central and Louise Avenue. Developers are building more apartments than ever before in Charlotte, but most of them are high-end units targeting more affluent renters.
The Gibson apartments under construction at Central and Louise Avenue. Developers are building more apartments than ever before in Charlotte, but most of them are high-end units targeting more affluent renters.

Mecklenburg County might be headed for its own “The rent is too damn high” moment: A new study has found that almost half of Mecklenburg County’s renter households are spending more than 30 percent of their income on housing.

That’s considered a benchmark of affordability, and the study by the UNC Charlotte Urban Institute and funded by Mecklenburg County paints a discouraging picture. Even as developers are building apartments at a record-breaking pace, most of them are high-end units out of reach for many low- and moderate-income households.

People facing high housing costs relative to their incomes are likely to face more negative consequences than simply having less spending money.

“Housing instability – ranging from evictions to episodes of homelessness – is a prevalent problem,” wrote Stacy Lowry, director of Mecklenburg County Community Support Services, in an introduction to the report. “Households experiencing housing instability face multiple barriers, including: high housing costs, poor housing quality, unstable neighborhoods, and lack of access to transportation and affordable, quality childcare, and stagnant wage growth.”

Housing affordability is an issue citywide. There’s no requirement that developers include any percentage of affordable housing in new buildings, and no developers have taken the city’s offer to allow more units via a “density bonus” if they set aside some units as affordable. With rents increasing, supply tight and Charlotte’s population booming, there’s no incentive for developers to build units that might rent for less.

City Council member LaWana Mayfield, a Democrat, represents southwest Charlotte, including the booming South End area. Mayfield has frequently questioned developers and city staff at recent City Council meetings about whether they are including any affordable units in new rental projects.

“Soon, people aren’t going to be able to live in the city limits,” Mayfield said Monday. She said people straining to make rent are often working multiple jobs and struggle to pay for necessities beyond rent. “You’re not able to afford other bills...The people who are most affected are working two, three, four jobs.”

She said the city should consider requiring some affordable units in new projects, an idea that’s usually unpopular in the development community and areas that might see more affordable housing added.

“We need to have local municipal control to put not just incentives in place, but also some mandates,” she said.

Charlotte City Council received copies of the report Monday. You can read the full report online here. Here are some of the key findings:

▪ In 2013, the most recent year data was available, 46 percent of renter households in Mecklenburg paid more than 30 percent of their gross income for housing and utilities, a benchmark typically used to gauge whether housing is affordable. That’s compared with 27 percent of owner-occupied households that are cost-burdened.

▪ At the same time, more people in Mecklenburg are renting and fewer own their own homes. A decade ago, 64 percent of houses were owner-occupied and 36 percent were renter-occupied. By 2013, just 57 percent of houses in the county were owner-occupied, and 43 percent were occupied by renters.

▪ While a higher percentage of low-income renters are cost-burdened, the proportion of renters facing uncomfortably high housing costs is rising for better-off income groups as well. Here’s how the numbers break down: 94 percent of renters making less than $20,000 are cost-burdened, perhaps not surprisingly.

But 77 percent of rental households making $20,000 to $34,999 are cost-burdened, up from 63 percent in 2005. For those making $35,000 to $49,999, a full third of renters are cost-burdened: 33 percent, vs. just 17 percent in 2005. For those with incomes between $50,000 and $74,999, the proportion more than doubled: 12 percent are cost-burdened, vs. 5 percent in 2005.

▪ High cost burdens for housing fall disproportionately on black and Hispanic households. In Mecklenburg, 52 percent of black renter households are cost-burdened, as are 47 percent of Hispanic renter households. That’s compared to 36 percent of white renter households and 26 percent of Asian renter households.

▪ A person working for minimum wage of $7.25 an hour would need to work for 88 hours a week to afford a two-bedroom at the estimated fair market rent of $831 per month. To make the unit affordable working 40 hours a week, the renter would need to make $15.98 an hour, more than double minimum wage. That’s why affordability can be an even bigger problem for low-income households with kids, who need a minimum of two bedrooms and are often supported by a single worker.

Ely Portillo: 704-358-5041, @ESPortillo