In recognition of the 20th anniversary of the Housing Trust Fund and an ongoing commitment to affordable housing, the City of Charlotte on Monday released the Housing Trust Fund 20 Year Anniversary report reflecting on the fund’s achievements and looking to the future of affordable housing in Charlotte.
Established by the Charlotte City Council in 2001 and administered by the Housing & Neighborhood Services Department, the Housing Trust Fund uses voter-approved housing bonds to provide financing to developers to offset the cost of building affordable housing. Funds also support various organizations that provide homelessness services.
The first housing developments supported by the Housing Trust Fund began receiving financing in 2002. In the 20 years since, more than $218.8 million has helped create or preserve 10,869 affordable units and 888 shelter beds. Housing Trust Fund investments have supported a diverse range of housing developments including:
- New construction of multifamily developments.
- Expansion of shelters.
- Supportive housing development.
- Naturally occurring affordable housing preservation, including in areas experiencing rapid change.
- Single-family, for-sale developments that expand homeownership opportunities.
"We know the struggles so many Charlotteans have faced in finding housing that is affordable — a problem exacerbated by the challenges of the pandemic," said Mayor Vi Lyles. "This work is important and necessary, and we cannot do it alone. We are honored to have so many dedicated and talented partners who have helped us make the Housing Trust Fund the cornerstone of affordable housing efforts in Charlotte."
As the city celebrates the 20-year history of the fund, it also aims for greater progress over the next 20 years. In 2022, the City Council's Great Neighborhoods Committee will assess the Housing Trust Fund to review its historic strengths, identify opportunities for improvement and discuss how things may be done differently as Charlotte changes and grows.
Responding to Local Housing Conditions and Priorities
Charlotte is projected to grow by 385,000 people over the next 20 years, according to the Charlotte Future 2040 Comprehensive Plan. City government and local partners are actively planning for this growth and working to guide development patterns, using tools such as the 2040 Comprehensive Plan, and the Housing Charlotte Framework. The framework was adopted by the Charlotte City Council in 2018 to map how the city works with community partners and resources to achieve three primary objectives:
- Expand the supply of affordable housing.
- Preserve existing affordable housing.
- Improve family self-sufficiency.
Strategies for a Stronger Future of Affordable Housing
What is considered affordable differs for different people. It is necessary to provide services at all levels, across the entire housing spectrum, from homelessness prevention and support to homeownership. Several strategies and best practices will define the City of Charlotte's approach to affordable housing in the coming years.
Naturally Occurring Affordable Housing
Naturally occurring affordable housing (NOAH) is existing housing with relatively low rents because of age, geography or other circumstances, and that is not currently subsidized by government programs. Purchasing and rehabilitating this type of housing is less disruptive to an area, can be less expensive, and is faster to complete for tenants than new construction. Through NOAH preservation, residents get access to mixed-income, opportunity-rich neighborhoods, and the loss of affordable units and displacement is mitigated.
The city will continue working with developers like Ascent Real Estate Partners that acquire and rehabilitate NOAH properties, but keep rents affordable for at least 15 years. With NOAH developments, developers can accept a lower return on their investment with long-term affordability periods (compared to potentially higher returns that come from renting units at higher market rates) because they leverage city funds to help finance a portion of their investment.
NOAH projects can also create partnerships and services beyond the city and the housing developer. The 144-unit Lake Mist Apartments development, purchased by Ascent Real Estate Partners with support from the city and other partners, also brings in Atrium Health to provide on-site, support services for residents who earn between 30% and 80% of Charlotte's area median income (AMI). Area median income is the midpoint of the distribution of annual family income for a region, in which half of families earn more than the AMI and half earn less. For a family of four in Charlotte, earning 30% AMI is $25,250 per year, and earning 80% AMI is $67,350 per year.
Homeownership
Homeownership is often residents' greatest tool to build wealth. Investments in affordable homeownership aim to achieve several goals, including economic mobility — a family harnessing wealth over generations — housing stability, and the sustained affordability of owning rather than renting over time.
In September 2021, the Charlotte City Council approved the largest single allocation of Housing Trust Fund dollars, which included the latest affordable homeownership developments to be supported by the fund:
- Bishop Madison Homeownership: Urban Trends Real Estate is developing nine for-sale units on Bishop Madison Lane with prices between $260,000 and $275,000. A deed restriction will keep the homes affordable for 15 years.
- Druid Hills Legacy Duet Homes: DreamKey Partners is developing 22 for-sale duet units priced between $209,000 and $250,000 in the Druid Hills neighborhood. Unlike a duplex, in which the building typically has a single owner and the two units are rented out, the units in a duet are sold and owned separately. A deed restriction will keep the homes affordable for 15 years.
Getting in Early
Charlotte is growing and market-rate housing developers will continue to build much of the city's housing stock. As communities change in response to market dynamics, development and a variety of other factors, sustained housing affordability in market-rate developments is difficult.
To mitigate future displacement, the city and its housing partners must connect with residents and get affordable housing on the ground, in areas where these pressures pose the most risk on low-to-moderate-income households. The Housing & Neighborhood Services and Planning, Design & Development departments will continue to work with market-rate developers on voluntarily committing certain percentages of their developments for affordable housing, and will continue to evaluate Housing Trust Fund investments to support this strategy.
This strategy can be seen in action at Cherry Gardens, located in the historic Cherry neighborhood near Uptown. Mosaic Development Group (formerly the Affordable Housing Group) completed the 42-unit rental housing development in 2010 with the help of a Housing Trust Fund investment that keeps the development affordable for 30 years. Cherry Gardens serves people 55 years and older who earn between 30% and 50% AMI, giving them access to urban amenities, including fresh food and medical services, even as the neighborhood has experienced gentrification and rising housing costs in recent years.
Transit-Oriented Development
Areas near transit corridors are rapidly developing and in need affordable housing options.
The City of Charlotte created transit-oriented development (TOD) districts in 2019 to encourage the development of moderate-to-high-intensity, compact and mixed-use neighborhoods near transit stations. These neighborhoods are places where people can live, work and play, and access a range of mobility options to get them where they need to go. As Charlotte plans and expands its transit system, the city is working to create programs that promote affordable housing opportunities within these TOD districts.
An example of this is Bingham Park, a 60-unit development supported by the Housing Trust Fund, completed in 2021, and located about a mile from the Old Concord Road LYNX Blue Line light rail station. With proximity to transit and other mobility options, Bingham Park's residents, who are 55 years and older and earning between 30% and 60% AMI, can access daily services, employment and more. The trust fund investment will keep Bingham Park affordable for 30 years.
Leveraging City-Owned Land
Land in Charlotte is scarce and expensive, and the Housing Charlotte Framework includes using viable, city-owned land as a best practice for increasing affordable housing opportunities.
Providing land for affordable housing developments decreases the amount of Housing Trust Fund support a developer needs, and frees up funds for other worthwhile projects and more affordable units. Additionally, the city can put in place long-term ground leases rather than selling or donating vacant land. This allows the city to be a partner in the development and retain ownership to ensure the land's affordable housing purposes are fulfilled.
In 2017, the Charlotte City Council approved selling more than 11 acres of vacant, city-owned land on West Tyvola Road to a developer, Laurel Street Residential, to build mixed-income rental housing. The Tyvola Road development will have nine units for families earning at or below 30% AMI, 39 units for families earning at or below 80% AMI, and 45 units to be rented at market rate. It is slated to open in 2023.
The city is also exploring land acquisition opportunities, particularly in the Corridors of Opportunity — historically underserved areas where the city is investing in infrastructure and other quality of life improvements. This aims to ensure land is available for affordable housing in the future.
Leveraging Land from Faith-Based Partners
Several churches and other faith-based groups have connected with the City of Charlotte to build affordable housing using Housing Trust Fund dollars.
One example is The Park Seniors community. Funded through a partnership with the Housing Trust Fund, Bank of America and Local Initiatives Support Corporation, The Park Church is utilizing its 51-acre campus on Beatties Ford Road to build affordable housing for people 55 years and older. The development will include 80 affordable units: 60 units for people earning at or below 60% the AMI, and 20 units for people earning at or below 30% AMI. Units will remain affordable for 30 years.
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