This $58 million fund will buy, save affordable housing from vanishing in Charlotte
A group of Charlotte investors has announced a $58 million Housing Impact Fund, aimed at saving 1,500 affordable apartments from disappearing in rapidly changing neighborhoods.
The fund, which includes $15 million from Charlotte-based Truist, will purchase apartment complexes and restrict rents for low- and moderate-income households. It is the largest concentrated investment to save what’s known as “naturally occurring affordable housing,” or NOAH properties, in the city.
Charlotte government, business and nonprofit leaders have said preserving NOAH properties is essential to address the affordable housing crisis.
While public investment for years has focused on funding new construction of affordable apartments, they can take up to two years to finance and build. And housing advocates have said existing affordable options are disappearing faster than new ones can be built as investors scoop up older properties and raise rents.
The goal is to buy properties close to transit, jobs and health care and preserve affordable options for all income levels, said Mark Ethridge, president of Ascent Housing, which is set to purchase the first property through the fund later this year.
“We’re seeing the urbanization of Charlotte and the resulting gentrification of a lot of our neighborhoods,” he said. “The rents of the older apartment communities are changing precipitously.”
Saving NOAH properties
Leaders of the fund say they are looking to buy apartments in neighborhoods at risk of or actively gentrifying and displacing current residents.
The pilot property is the 144-unit Lake Mist Apartments off Old Pineville Road, located near a Lynx Blue Line stop in an area where investors have purchased several comparable complexes and raised prices. Rents in the area have increased 34% in five years, Ethridge said.
City Council members approved $2.4 million from the city’s housing trust fund for the project in September. Ascent plans to close on the property in December.
Ethridge said the fund will target main corridors like Central Avenue, Monroe Road and South Boulevard where there are numerous apartments built in the 1960s, ‘70s and ‘80s.
All properties purchased through the fund will keep rents affordable for families earning 80% of the area median income and below, with 30% of the units set aside for households at 30% AMI. That’s between $26,200 and $66,800 for a family of four.
And in a novel arrangement, Mecklenburg County Commissioners have agreed to use property taxes collected from Lake Mist— about $84,000 in 2020— for rent subsidies for some of the lowest-income households.
Ascent Housing plans to make a similar pitch to city council to direct the city share of property taxes toward rental subsidies.
Funding units priced for the lowest incomes has been a consistent challenge for housing providers, nonprofits and local governments looking to meet the region’s affordable housing shortage.
While federal Housing Choice vouchers, administered locally by Inlivian, provide housing for about 5,000 families, the need is far greater. There is an estimated six-year waiting list of 6,000 households seeking a Housing Choice voucher through Inlivian, officials have said.
The county’s property tax money would subsidize about half of the 30% AMI units at Lake Mist, Ethridge said, with families with vouchers living the other half.
In addition to Truist’s $15 million contribution, the Housing Impact Fund has investments from Atrium Health, LendingTree, Movement Mortgage and nine local real estate development firms, according to the fund’s leaders.
“Our investment will help provide safe, stable, and affordable homes for 1,500 families to live and raise their children,” said Truist Chairman and CEO Kelly King in statement Tuesday.
The fund will also use $20 million from the Charlotte Housing Opportunity Investment Fund, the private fund created to be used with public affordable housing investments.
Ascent also recently partnered with Roof Above to buy a 341-unit apartment complex in east Charlotte for income-based affordable housing and permanent supportive housing for people who are chronically homeless. Last year, Ascent joined developer Laurel Street Residential to buy the 98-unit Sharon Oaks apartments.
This story was originally published November 3, 2020 at 10:48 AM.
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