Next up for apartment development: More affordable, more renovation, older neighborhoods

CHARLOTTE – Apartments are dominating commercial construction in Charlotte, and are expected to continue to do so in the near future. And while industry professionals have wrapped their heads around why people want to live in apartments, the high-concentration of quality product in targeted areas of the city raises questions about where apartment construction could happen next.

Four panelists who spoke at the Greater Charlotte Apartment Association’s Multifamily Forecast Breakfast on Friday didn’t attempt to answer that question, but it was brought up multiple times, and the panelists agreed that the anticipated construction of less luxurious, more economical apartments will certainly be something to keep an eye on.

“What’s going to be really interesting going forward is what’s going to happen to folks in the bars on the far left,” said Frank Warren, senior economist at Kimley-Horn, as he pointed to a PowerPoint slide, referring to residents paying monthly rents of between $500 and $1,000.

Warren was joined on the panel by John Chesser, senior analyst with the UNC Charlotte Urban Institute; Ed McKinney, Charlotte-Mecklenburg interim planning director; and Jim Borders, president of Atlanta-based Novare Group.

Borders talked about Novare Group’s SkyHouse Uptown apartment concept and how it has benefited from the high demand for apartments in several U.S cities.

But the other panelists focused on explaining how population growth and job growth are the biggest factors driving the demand for apartments in Charlotte.

Whereas Warren described people coming into Charlotte as millennials, or young, educated professionals, Chesser said it’s not as much millennials as much as what he referred to as the “creative class.”

Chesser defined the creative class by members’ lifestyle and job choices, rather than their age, but he agreed that a lot of creative class people are also millennials because they both tend to move to urban areas at an early age. He said creative class jobs fell within management, business, services and the arts, and that Charlotte was attracting a “good chunk” of those jobs.

“What’s happening in Charlotte is that we’re getting creative class people, but that’s happening in concentrated areas” of the metropolitan statistical area, Chesser said.

Warren said that as submarkets like South End and uptown fill out, the city’s less-dense, older submarkets, such as in east Charlotte, will be redeveloped.

McKinney described density as a “four letter word” in Charlotte’s less-dense communities, and that the best way to ensure those areas are developed as successfully as South End would be to continue to push transit-oriented development along the Lynx Blue Line corridors as they’re completed.

In addition to prioritizing development along the rail corridors, McKinney said what people find important is something that’s unique, which is why apartment buildings have begun adding special amenities, such pet spas and yoga studios.

Chesser pointed out that not all people are looking for the same thing, and that it’s important that the city retain authentic neighborhoods and mix the new with the old.

He said the mixture of new and old and the retention of authenticity and character is a draw to some, and that development should appeal to a variety of tastes.

He told a story about his “millennial hipster” son tracking down his favorite food truck using his phone, as a way of explaining that individuals seek what appeals to them, and that can come in a variety of forms.

“It’s almost at the level of a Korean barbeque food truck, in terms of attractiveness,” he said of diversely-aged buildings.