County mulls ways to make affordable housing attractive to developers

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Charlotte-Mecklenburg Planning Department Director Debra Campbell says city leaders have been struggling to get affordable housing built in Charlotte since she began working for the city in 1988.

“It was an issue then, and it’s still an issue,” Campbell said during a Jan. 9 presentation to the Charlotte-Mecklenburg Planning Commission.

But, by as early as June, the planning department might finally have a policy to present to the Charlotte City Council that might entice developers to build the long-sought housing.

And — so far, at least — the development community is backing the plan.

The city, along with a group of development and neighborhood leaders, is still crafting the Incentive Based Inclusionary Housing Initiative.

Under the voluntary program, developers would be given a bonus for including affordable housing in projects. Developers who participate in the program would be able to include more houses — detached or attached — in their developments. Attached housing involves a structure with two or more residential units connected to one another, like a duplex.

The group also hopes to develop incentives for multifamily developments, but those incentives have not yet been crafted.

The idea for the program gained traction after the release of the Housing Charlotte 2007 report, which was followed by Housing and Neighborhood Development Committee meetings last year. In June, the City Council approved a plan directing planning staff members to study regulatory changes as well as financial initiatives that Charlotte could offer developers.

Bill Daleure, president of Charlotte-based Avant Garde Real Estate Consulting and past president of the North Carolina Homebuilders Association, said he has been involved in discussions about creating affordable housing in Charlotte since at least 2003, when he first served on the city’s affordable housing committee. He served again in 2007 and again beginning in 2011.

“Some of the exact same things we were proposing then are now actually going to move forward,” Daleure said. “It’s a slow machine.”

But Daleure said he’s optimistic about the city’s plan.

The initiative would give developers a “density bonus” of up to three units, whether they be single-family homes or duplexes or other attached units, above a zoning district’s base density. For instance, an R-3 area normally allows no more than three units per acre. But a density bonus of three would allow for three more units to be included on that acre.

Under the proposal, a minimum of 50 percent of the additional units gained through the density bonus must be “affordable.” The number of affordable units cannot exceed 25 percent of the total number of units in the development, and the overall project size must be at least 1 acre.

Joe Padilla, executive director of the Real Estate and Building Industry Coalition in Charlotte, is among those who think the incentives will result in more affordable housing.

“You get enough of yield that it will be a real incentive for someone to come in and put in affordable units,” Padilla said. “If implemented, it will be very positive.”

The program would apply to any residential zoning district of R-3 through R-6 within Charlotte census block groups that have a median home value at or above $153,000. That mostly includes Center City, a wedge to the south of Charlotte and some areas to the north near Interstate 485.

The affordable units would be targeted to those with income levels at or below 80 percent of the area median income, which is $54,000, according to the city.

The idea, Daleure says, is to bring affordable housing to parts of the city where it doesn’t exist, so teachers and police officers won’t move to neighboring counties or other areas where housing costs are lower.

The city also wants affordable housing to not be concentrated, he said.

Under the program, the units must be similar in architectural details to the rest of the homes in the development. But it’s likely that there will be fewer fancy features — such as granite countertops — inside as developers try to keep the homes affordable.

But the city is also considering allowing duplexes on any residential lot in the city. For the time being, they are only permitted on corner lots.

The proposal allows a variety of housing types, like duplexes, although they must be on the interior of the development.

The city is also proposing to allow anyone to live in accessory dwelling units on single-family lots. Currently, only relatives and employees are allowed to live in ADUs, such as finished rooms above garages.

Padilla said that part of the proposal is a reflection of the market.

“I think we’re all starting to recognize in the current market there is an increasing demand for different types of housing as our demographics shift and as our family size and composition shifts,” Padilla said. “There are different needs than single-family and multifamily.”

That will help encourage “aging in place,” Padilla said, which means that as someone ages they can move into different housing types, such as from a single-family home to a condo, all while living in the same neighborhood.

“It provides people who cannot live in south Charlotte to be able to afford homes that are priced affordably in an area of town and a school district that was otherwise not accessible to them,” Padilla said.

But while many seem to support the proposal, the plan is far from being finished. So far, an advisory group has only tackled the construction of for-sale, affordable single-family housing.

On the agenda for an upcoming meeting of the group of development and neighborhood leaders is a look at how city policy can encourage multifamily developments with affordable rental units. That won’t be so easy, Padilla and Daleure say.

Padilla said the density bonus that makes the initiative attractive to single-family developers will not entice multifamily developers.

“That’s going to be more challenging,” he said. “The density is already there, so a density bonus is not quite as beneficial. But there are other ways to skin that cat.”

Padilla wouldn’t venture a guess as to how the group would incentivize affordable units in multifamily rental developments but said city planning staff members and the advisory group will examine what has worked in other communities.

Daleure said the biggest need for affordable housing in Charlotte stems from one-income service industry employees, such as those in fast food.

“It’s hard at $14,000 a year to even rent anything,” Daleure said. “We’re going to address multifamily affordable housing again with the committee. But it’s my inclination, if you don’t have a subsidy, it doesn’t work. But that’s where we need the bulk of the 24,000 units, for people making $18,000 a year.”

“What we’re doing is really crucial,” he said. “I’m encouraged that Charlotte is finally moving forward to address the need of all the folk who work in the city.”

Ramsey can be reached at [email protected].