Charlotte City Council is taking a new tack in its struggle to make up for the city’s shortfall in affordable housing: Fix what you have rather than build what you don’t.
City Council voted Monday to allocate $2.1 million to subsidize renovation and rehabilitation of the privately owned Sharon Oaks apartments in east Charlotte. It’s the first time the city has used its affordable housing money to renovate existing apartments rather than underwrite new developments.
The city is trying to focus more on preserving “naturally occurring affordable housing,” known in the industry as “NOAH.” Such housing includes privately owned, older apartments that are naturally cheaper because they have fewer amenities.
“This is our first NOAH and our first activity to use our affordable housing fund,” said Mayor Vi Lyles. “We’re going to do both. More than create units, we’re going to retain those units.”
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Charlotte has traditionally spent money from its affordable housing bonds on new construction, subsidizing developers who are building apartments for lower-income renters. But as redevelopment has accelerated in recent years, thousands of older apartments have been demolished to make way for luxury units or purchased by investors who renovate them and substantially increase the rent.
Last year, voters approved $50 million in Housing Trust Fund bonds — triple the city’s usual amount. The Foundation for the Carolinas is also leading a push to raise an additional $50 million in matching private and philanthropic money, potentially giving the city $100 million in new funds to subsidize affordable housing.
Affordable housing has become a more potent political issue in Charlotte as average rent and home prices continue rising rapidly. The city has a shortage of about 24,000 housing units for low-income renters, heavily concentrated among those who make less than half of the area’s median income.
“Here we have an answer,” said council member Ed Driggs, who said such deals can help prevent gentrification from displacing long-term residents in fast-growing areas. “Residents can stay there over time.”
Sharon Oaks apartments are on North Sharon Amity Road, just south of Independence Boulevard, and date to 1961. Rent averages $697 per month for one-bedroom and $873 a month for two-bedroom apartments.
Laurel Street Residential, an affordable housing-focused developer, and Ascent Real Estate Capital asked the city to subsidize renovations at Sharon Oaks that will include replacing roofs, sidings and balconies, fixing rotted wood, structural repairs and drainage improvements to prevent flooding.
The total estimated cost for the project is $9.4 million, meaning the city’s subsidy would make up a bit more than 20 percent of the budget. In return, the owners would add restrictions preserving the rents at affordable rates for 15 years.
The city is investing $21,429 per apartment to renovate units. Council member Justin Harlow said that the subsidized renovations are “significantly cheaper than new construction developments.”
Council members said the deal is a model, and renovating older units with city money could be a model for stretching those dollars further.
Said council member Braxton Winston: “It preserves the most units at the price points we need in this city.”