By Genna Contino, The Charlotte Observer

Those working to solve Charlotte’s housing shortage know that every additional affordable unit is essential as the population and need grows.

The City of Charlotte has calculated that 32,000 units are needed to meet the needs of more than 50,000 Charlotteans who do not have affordable housing. Since 2001, Charlotte has produced nearly 11,000 units for this purpose through partnerships with nonprofits, developers, and church groups for residents who earn less than a certain percentage of the city’s median income.

Yet supply is struggling to keep up with demand.

Charlotte sometimes looks to cities of similar size — especially areas with even greater need — for inspiration, said Warren Wooten, Charlotte’s housing services director.

One possible solution: combine land (and interests) owned by a developer with land owned by non-profit organizations.

In Nashville, Tennessee, a developer deliberately purchased a parcel near land owned by a nonprofit organization to increase the amount of affordable housing that could be built there.

Like Charlotte, Nashville’s scars from urban renewal have yet to heal. Just as government programs forced black residents from their homes in Charlotte’s Brooklyn borough in the 1960s, neighborhoods surrounding Nashville’s urban core suffered the same fate – leaving many homeless in the city they called home for generations.

Developer Shawn Bailes, president and CEO of Capital City Construction, has partnered with Nashville-based nonprofit Affordable Housing Resources to build seven new homes. Photo by Alan Poizner for the Charlotte Journalism Collaborative.

“I thought, let’s not just build one house and waste the land. Let me rezone it and build more homes,” said Shawn Bailes, president and CEO of Nashville development company Capital City Construction.

Nashville’s property data, like Charlotte’s, is digitized. So Bailes knew the property next to him belonged to nonprofit Affordable Housing Resources. He rezoned both his land and the association’s land to allow seven units in total, including new units on what would have been the association’s plot. Prior to rezoning, the city would have allowed only three units combined on the two parcels.

The few extra units might not seem like a lot, but Bailes sees the additions as added density that makes housing on the site more affordable. A house on a lot can cost $2,000 to rent. But a quadplex — four units — could have a rent of $600 for each unit, generate a higher return on investment for the developer over time, and provide more affordable options for some of the thousands of people who need them.

“It’s just skinning the cat in a different way,” Bailes said. “The demand is extremely high here. That’s why the prices are high.

“The whole world has changed”

The Bailes project is still in the licensing process. The two houses on the land owned by the non-profit organization will sell for a whopping $200,000. In the neighborhoods of East Nashville, where the project will be located, no homes are listed for less than $350,000, according to Zillow.

Bailes has not decided on a price range for the five units in his property, he said.

Rezonings that make a project denser and more affordable are nothing new. Developers regularly appear before local councils asking for land use regulations allowing multi-family dwellings, duplexes, secondary suites and other types of housing.

Bailes’ approach is different because he deliberately sought out land near the nonprofit and offered to help through the approval process after learning about the affordable housing project.

Building denser housing in urban cores is needed, said Eddie Latimer, CEO of Affordable Housing Resources. As median downtown home and lot values ​​rise alongside Nashville’s popularity, limited space will force developers to build.

The non-profit organization focuses on home ownership, which has become more unaffordable in recent years.

The Bailes rezoning also created a way around quirky zoning laws. To build the three-story houses they wanted, there had to be a 39-foot easement in the middle for a fire truck in case of an emergency.

Did it work in Charlotte?

Similar partnerships with nonprofit organizations have worked in Charlotte.

A recent example in Charlotte is a partnership between Ascent Housing, an organization that acquires and preserves affordable housing, and the nonprofit Roof Above.

Roof Above purchased the 23-acre HillRock Estates apartment complex and worked with Ascent to acquire, finance and establish an affordability plan for the project. The complex has 340 units, including a mix of units spread throughout the complex for people who have previously experienced chronic homelessness.

Roof Above has received millions of corporate, philanthropic and government dollars to preserve affordable housing, including $7 million in private donations and a $5 million low-interest loan from Atrium Health in return for the use of 50 of the units to house Atrium workers in need.

“We could never do this without a nonprofit being the owner and equity provider,” said Mark Ethridge, who runs Ascent Housing.

When the need remains as great as it is, Charlotte should continue to be creative in bringing in new units where possible, Wooten said.

“We are always open to unique opportunities with unique partners,” Wooten said.

“There is no formula for determining what makes the best affordable housing development.

Has the action of the municipal council facilitated the task?

Charlotte passing the Unified Development Ordinance (UDO) this year, a document that determines what can be built where, could allow more projects like Bailes’ in Nashville to fill the gaps.

A provision of the UDO allows for denser housing to be built in traditionally single-family neighborhoods, which has caught the public’s attention. Some have also argued that it will promote gentrification.

Gentrification can be marked by sleek apartment buildings, expensive restaurants, and an influx of affluent whites into areas traditionally populated by people of color. Charlotteans have seen this firsthand as neighborhoods such as Wesley Heights and Cherry see trendy breweries and cafes open where quaint single-family homes have housed much of Charlotte’s black population for generations.

“While this document isn’t perfect – I will say it isn’t perfect – it really put us on a trajectory of change for our community and how our community will grow and the rules of the game that will govern that growth” , District 2 Councilman Malcolm Graham said when the UDO was passed.

Former city councilman Matt Newton voted against the UDO.

“As the development market adjusts to the increased profitability of duplex and triplex development, property values ​​for this type of development will further increase,” Newton said. “It will be a double whammy for residents of gentrifying neighborhoods.”

City Housing Services

Despite the disparities, Charlotte remains more open to building affordable housing than other cities in the state, Wooten said.

The city and county of Mecklenburg both passed revenue source protections this year, which means new local government-subsidized projects can’t turn away tenants who pay with Section 8 vouchers. The city was the first municipality in the state to adopt such protections.

Charlotte also offers down payment assistance and mortgage relief programs to its residents through its HouseCharlotte and Mortgage Relief Assistance programs.

But when it comes to affordable housing projects and partnerships with nonprofits or private developers, the city acts like a bank with land or money to contribute. The city established its Housing Trust Fund in 2002 to provide funding to developers of affordable housing.

“The city is not in the home ownership business,” Wooten said with Housing Services. “That’s not what we do.”

The city often provides what Wooten calls a “gap grant” – a nonprofit or developer comes to them with a project they’re working on, but they’re missing an element of funding or they can’t allow the ground. This is where the city comes in, sometimes donating land or money to a project.

Since inception of its housing trust fund, the city has provided nearly $218.8 million in gap funding for 10,869 new and rehabilitated units and 888 homeless shelter beds, according to Wooten.

The city currently has 5,317.84 acres of vacant land in various shapes and locations, according to city spokesman Lawrence Corley III. Wooten said all excess land is considered affordable housing when the city reviews the plots to determine their purpose.

“Charlotte has a great climate for this job,” Wooten said. “You see both sides of the political spectrum prioritizing affordable housing.”

Development without displacement

Affordable housing remains a priority among the needs of Mecklenburg County residents, even as apartment projects across the city go vertical, according to a recent survey.

The 2022 Mecklenburg County Community Survey, presented to commissioners earlier this month, found that 32% of residents thought affordable housing was the most important issue countywide, more than the 21% who reported crime and the 16.2% who reported schools.

Mecklenburg is North Carolina’s most unequal county, with the top 1% earning more than 30 times the bottom 99%, according to data from the nonprofit Institute for Economic Policy.

The challenge is to balance the preservation of the neighborhood with an urgent need for more housing – development without displacement.

Building or constructing more units on a single piece of land can serve as a small solution to a big problem, Bailes said.

“People think the developers are the reincarnation of the devil, but that’s not really the case,” Bailes said.

Carolina Public Press is one of seven major media companies and other local institutions producing I Can’t Afford to Live Here, a collaborative reporting project focused on solutions to Charlotte’s affordable housing crisis. It is a project of the Charlotte Journalism Collaborative, which is supported by the Local Media Project, an initiative launched by the Solutions Journalism Network with support from the Knight Foundation to strengthen and reinvigorate local media ecosystems. Find all our reports on charlottejournalism.org.