Charlotte Council wrestles with workforce housing

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The Charlotte City Council is struggling to determine what, if anything, the city should do to ensure housing remains affordable at a time when the apartment market is booming, but driving rents to prices not everyone can afford.

The issue arose during a recent rezoning hearing, with some council members struggling with how to convince developers to include workforce housing units that offer lower rents for teachers, firefighters and public employees.

Other council members worried about the council’s involvement in “social engineering.”

“The point, in fact, is we are ‘apartmenting’ Charlotte,” said Councilwoman Claire Fallon, a Democrat.  “And if we are apartmenting Charlotte to the extent we are, something has to come back for regular people who cannot afford $1,600-a-month rent.”

The city, she said, can’t be one “of only rich people.”

But Councilman Kenny Smith, a Republican, said developers are proposing projects that need to be discussed on their merits.

“Our job is to vote on whether it’s good land use,” Smith said. “Sometimes we take a land-use issue and then infuse a policy issue into it.”

The building industry, meanwhile, is watching.

Rob Nanfelt, government affairs manager with the Real Estate and Building Industry Coalition, said REBIC doesn’t believe Charlotte can enact inclusionary zoning measures that mandate real estate developers set aside a portion of new development for housing that is affordable to households in a certain income bracket.

Instead, he called for council members to create a streamlined regulatory framework that allows more units to be built more quickly.

“You have a place like Charlotte, which is a very desirable place to live,” Nanfelt said. “The more people that move in and the less housing availability you have, the cost is automatically going to go up. That’s just economics.”

If the supply of rental units increases faster than demand, higher vacancy rates could result and lead apartment communities to lower rents.

Charlotte has taken the approach of offering a “density bonus” to allow developers to build more homes or apartments if affordable units are included in the project. Few have taken up the offer.

Last year, Davidson settled a lawsuit filed by two developers claiming the town didn’t have the authority to require homebuilders to construct affordable housing.

Following the lawsuit, commissioners eased the requirements. Last summer, the town adopted a policy offering developers a fee-in-lieu option on all required affordable units. Previously, that option could be used on just 30 percent of the affordable units the town required.

Nanfelt said that in North Carolina, local governments only have the authority to enact ordinances that is delegated to them by state statutes.

Nanfelt said that towns such as Davidson, Chapel Hill and Carrboro —  which have affordable-housing requirements on residential development — are violating state law since the legislature hasn’t expressly granted that power, he said.

The courts have yet to rule on the legality of such requirements.

The hearing before the Charlotte council dealt with a request from Johnson Development Associates Inc. to rezone 5 acres on the south side of Mockingbird Lane between Park Road and Hedgemore Drive to allow redevelopment of Pfeiffer University land with 360 multifamily units and a parking structure.

The property, in the Park-Woodlawn area, also would include up to 17,000 square feet of retail, entertainment and office space.

Planners recommended approval of the rezoning in part because the site is in a mixed-use activity center, which is a priority area to accommodate future growth that is conducive to walking, and the proposed development supports the goal to reduce the amount of surface parking lots.

But LaWana Mayfield, a Democrat and chair of the council’s Housing and Neighborhood Development Committee, asked how the project would improve workforce housing, which is considered to be affordable to people in such professions as teaching, firefighting, policing, health care, and local government.

“As the city of Charlotte is developing and we’re becoming more and more expensive, is there any conversation or consideration for any workforce units in this development?” she asked Jeff Brown, who represented the petitioner.

Mayfield said she was asking “just in case we happen to have a teacher that might want to live over there.”

Brown replied that the proposed development doesn’t include a workforce component.

Johnson Development, he said, has worked on the plan for several months and “worked hard to deal with the unit mix, deal with the building design, deal with the ground-floor retail.”

He added, “We appreciate the global desire or the goal which the council has enumerated for workforce housing. This project is not displacing any of the existing tenants.”

Workforce housing aims to help people who work in many service and support industries but have incomes that often are less – sometimes considerably less – than what is required to support “a reasonably comfortable life,” the Greater Charlotte Apartment Association said in a 2010 report.

In Mecklenburg County, 46 percent of renters are considered “cost burdened,” spending more than 30 percent of their gross income on housing costs, according to the UNC Charlotte Urban Institute.

That’s due in large part to rising rents and falling wages.

The average rent in Charlotte now exceeds $1,000 a month, according to Real Data, which tracks apartment markets in the major Southeast markets.

At the rezoning hearing, Fallon pressed the workforce housing issue, saying,  “With 300 units, I thought that maybe you could find a place for five for workforce housing and change something around.

“It would make it much more palatable.”

“We appreciate your input tonight, thank you,” Brown replied.
Ed Driggs, another Republican council member, shared Smith’s view, saying, “We need to be careful when we talk about how we like affordable housing, that we not give the appearance that the (zoning) decision turns on that.”

He said the council needs a “better-articulated strategy“ for its housing goals “because having people work for months on a proposal and then come in and hear things that they weren’t prepared for on an ad hoc basis” makes the process more difficult.

Councilwoman Julie Eiselt, a Democrat, said the council needs to set guidelines for developers and ask, “What do you need from us to be able to include four or five units (of workforce housing)?

”And if there’s something there that makes it attractive to you, then we’ve got to find some tools in our arsenal to come up with,” she said.

Mayor Jennifer Roberts said questions have been mounting “with the numbers of petitions we’ve had, the rezonings, the just accelerated development.

“It is not sustainable to develop at this pace without taking into account the needs of the overall community, the workforce, the families and the big picture stepping back,” she said.

The private sector must work with the public sector, Roberts said.

“It’s heaving lifting for all of us,” she said.

As the debate continues, the building industry is closely monitoring the council’s intent, Nanfelt said.

“People are going to keep moving here,” he said. “We just need to make sure that the availability is there long into the future.”

“If we make things too difficult on the development community, they’re just going to go across the state line,” he said. “Fort Mill would be happy to take that on. Rock Hill would be happy to take that on.”

 – Staff writer Roberta Fuchs contributed to this report