For years, Charlotte’s ambitions for providing adequate low-income housing have exceeded the actual dollars committed to achieving them. Now that may be changing. While the needs remain massive and growing, it’s heartening to see both the public and private sectors stepping up recently in more concrete ways.
Bank of America and two other financial services firms on Tuesday announced the largest private-sector commitment to affordable housing in Charlotte’s history. BofA, Ally Financial and Barings will invest more than $70 million to help low-income residents who can’t keep up with rising rents, which last year averaged $1,142 per month.
The bulk of the investment comes from $50 million in below-market loans. With interest rates up to 2 percentage points below market rate, the loans will save developers up to $1 million a year for 15 years, the banks said. That’s an important incentive; developers often find it is not profitable, or as profitable, to build low-income housing. Some deals fail to come together by the slimmest of margins, and an interest-rate break like this could make the difference for some projects.
The banks will also donate $7.25 million in land for affordable housing, including in uptown. The rest of the package includes $11 million for a new Housing Opportunity Investment Fund that would help finance projects and $2.5 million for other economic-mobility initiatives.
“This is pretty big,” Julie Porter, president of the Charlotte-Mecklenburg Housing Partnership, told the Observer editorial board. “There are not a lot of cities, our size especially, that have this kind of fund.”
The investment follows other big ones:
▪ Voters in November approved $50 million for the city’s Housing Trust Fund. That was more than triple the $15 million voters typically approved every other year.
▪ Wells Fargo pledged $20 million toward Charlotte’s affordable housing, through down payment assistance, development financing and other efforts.
▪ Developer Crescent Communities is giving away 4.5 acres in the new River District in west Charlotte. Developers will build 124 apartments for low-income people on the land.
▪ The Foundation for the Carolinas last year said it would commit $5 million toward the housing opportunity fund if the bonds passed.
It’s still not clear exactly how the firms’ new loan pool will work. And even commitments of this size only begin to address the problem. Charlotte faces a shortage of more than 20,000 affordable units, especially for the poorest. The Observer’s Ely Portillo last year reported that there are some 27,000 apartments planned in Charlotte and almost all target upscale renters.
But each of these recent commitments chip away at the problem. And it’s a problem that ultimately has an impact for all of Charlotte, not just low-income residents. We hope other companies will step up and recognize Charlotte’s long-term financial health will hinge in part on not having a large unhoused underclass.