By Ashley Fahey- Staff Writer, Charlotte Business Journal
While the Queen City’s population and job growth have resulted in tremendous real estate and economic development, the subsequent soaring cost of living in Charlotte has caused affordable housing to become the city’s most pressing challenge.
About 18,000 people are currently on a wait list for subsidized housing in Charlotte, says Fulton Meachem, president and chief executive of the Charlotte Housing Authority. CHA, established in 1939, primarily receives its funding from the U.S. Department of Housing and Urban Development. The agency serves 11,985 units, according to CHA.
While Charlotte City Council has voted to put on ballots this November a referendum to significantly bolster the city’s Housing Trust Fund, which provides financing for new affordable-housing developments through bond cycles, local residents and advocacy groups are calling for more solutions to build more affordable units, preserve existing inventory or provide more resources for housing vouchers.
There’s no silver bullet to addressing affordable housing, as most real estate developers, city leaders and housing experts would agree. Rather, it’ll take a number measures and methods among public entities as well as the private sector to come up with solutions.
CHA’s development subsidiary, Horizon Development Properties, this week cut the ribbon on its latest project, The Oaks at Cherry, an 81-unit, mixed-income residential development in the heart of the Cherry neighborhood near uptown. CHA began delivering units at The Oaks, formerly known as Tall Oaks, in January. The development was leased up in less than 90 days, Meachem said, and about 600 people total applied to live there.
The Oaks at Cherry represents the type of project the housing authority is doing more of — mixed-income housing that looks like market-rate residential development versus one large building reserved for the city’s lowest-income residents, which is how people historically perceive public housing, Meachem said.
“We’re in the middle of everything that’s affordable … we’ve always been that way but I think right now there’s more of an emphasis on what the housing authority is doing,” Meachem said. “I think it’s a good thing for us. We get to shine and explain the things that we’ve been doing and the things we’re going to be doing in the future.”
Meachem spoke to the Charlotte Business Journal about CHA’s current projects, his thoughts on current affordable-housing policy initiatives and what the private sector’s role might be in addressing the city’s affordable-housing shortage. Excerpts have been edited for brevity and clarity.
What are some of CHA’s projects that are coming up in the next year or so?
We’re looking at the Strawn Cottages project, which is a phenomenal opportunity to improve the 16-acre site that we have there and build a mixed-use and mixed-income site. It will be one of the few, I think, that you’ll see in the city that has price points (for those making) 65% or below area median income along with retail and office and homeownership.
That’s a really, really important project for us because the housing authority itself is federally funded. We don’t really receive city dollars for operations. This gives us an opportunity to bring in a mixed-income environment in a really dynamic community. We also have the Dillehay (Courts) site that we’re looking at. It’s about 136 units of public housing that we’re looking at transforming into another mixed-income site. Those families at Dillehay all will have an opportunity to come back to Dillehay, and we think it’s a great opportunity. It’s right at the innovation corridor area … a lot of activities (are) out there, a lot of synergies (are) happening there, so we’re really excited about that project as well.
At the Strawn site, the city is working on an infrastructure project. How is that going to impact the Strawn redevelopment timeline? When do you expect to break ground?
Hopefully, sometime in 2019. It’s important for the city project to go first and what they’re doing is extremely important — not just for our project but, I think, for all of the residents that are in that Strawn/Dilworth area. There are floods when it rains. It’ll probably save us about $1.5 million. We felt it was important to work with the city, even though it is a little behind schedule, in order to save those dollars because every dollar counts when you’re trying to deal with affordable housing. Our developer, The Fallon Co., has been a great partner through this and one of the few that’s even talking about doing any type of affordability within any type of mixed-use development in the city.
You are also working on the North Tryon plan as a stakeholder, with CHA being the owner of the Hall House. What’s the latest on that?
We’re in the middle of selecting a developer. We feel pretty good about where that’s going — a two-block strategy, including the library, Bank of America’s site and our site. Another opportunity for mixed-use, but also making sure that there’s affordable housing as a part of it. We’re trying to get individuals (living there who make) 30% AMI, so we have a very aggressive plan there.
What are some things you’re focusing on or looking to do more of in the future as an agency?
(Looking at) the full array of housing — I think most people think of the housing authority and say, “All they do is public housing.” That is our major focus, those individuals that are at or below 30% AMI. But you can’t simply financially build (housing for) only 30%. Us building a more mixed-income product, and even mixed-use product and bringing in partners like Fallon, is relatively new, I think, for this city.
Inviting individuals from all walks of life to live, work, play is something that we really believe in because we’ve seen how public housing has really not been, I would say, successful (in the past) because it concentrates all poor people into one particular area. Now, we’re trying to make sure that every community that we build is mixed income (and that) it really fits within the community. The Cherry community was a partner in making (The Oaks at Cherry) happen. It wasn’t solely the housing authority, it wasn’t all our vision, it really was a community vision to make The Oaks at Cherry work.
I think a lot of developers are working through how to do affordable units and have a project remain economically feasible. Is it possible to do mixed-use, mixed-income development on a significant scale in Charlotte?
I do think it’s possible. I think you’ve got to have real partners to do it. Inclusionary zoning is a word that I use sometimes but it gives some developers the heebie-jeebies. But it is something that is going on across the country. They actually are finding ways to have mixed use and have these income variances through the property. We’re not going to build any more land. If we sell all the property and all the property is now luxury housing, which a lot of what Charlotte is, what happens? We keep splintering populations.
Affordable housing is one of the most pressing topics in Charlotte today. Initiatives such as reevaluating the housing locational policy are underway now. What are your thoughts on some of that work being done? Is there anything we should be thinking about from a policy standpoint that would allow for more affordable housing in Charlotte?
I think they’re doing the right thing in looking at the locational policy. Not sure if it was used in the way it was intended. We’re not trying to concentrate poverty anywhere. I think what we’re trying to do at the end of the day is put people where the greatest opportunity is for success as well as maintaining some of the existing affordable housing … how to preserve (naturally occurring affordable housing). Us talking about it as a city from the aspect of what’s going to be in the best interests of the people that we serve, what are high-opportunity areas and how we might be able to partner with others to get into high-opportunity areas, I think, is the right approach.
The loss of NOAH has been cited as a growing issue in Charlotte as property gets redeveloped. Can anything be done at the city, state or federal levels to preserve that type of housing?
Whatever we do, and whatever we invest our money into, the properties need to have income restrictions on those particular units. Right now, there’s a myth out there that we have a surplus of workforce housing. There is no surplus. What you have is housing that’s affordable for families that are, (say), 50% below the area median income. But who’s living there are people that make 120% (AMI) or market rate or affluent people. Why? Because who wants to pay more in rent?
You have to (put) income restrictions on the property because if you want it to be for families (who are earning) 80% (AMI) or 50% (AMI) or whatever the number is, then those units need to be dedicated for that. If not, you end up exacerbating the problem because you now have people that are outside of that range living there. All properties that the housing authority does have income restrictions — that means only those families at that income range can actually live there. That’s something I think we need to have as a covenant if we’re going to put money into a project.
On the state level, I think (it’s) going to take some time to get some things done. I know our City Council is really, really struggling sometimes because there are certain things they can do and certain things they can’t do. I think as a public, though, we need to keep raising these issues and making sure people don’t forget that it is still legal to discriminate against individuals because of their income. (Some say), “Even though I can afford this house or afford this apartment, I can’t take this voucher and move to this other area because they won’t accept it — not because I have bad credit, not because I have a criminal background, just because I have a housing choice voucher.” (Changes to that are) something that would have to happen on a state level, potentially a federal level, but I think we should keep that out in the eye of the public because when you don’t know those kinds of things, you think everything is OK.
The other (thing to watch) on a state level would be inclusionary zoning — that’s a tough one. But I do believe the private sector has a part to play in making sure that a city doesn’t become the have and have nots.
So what can the private sector do to help prevent that?
They could say, “10% or 20% of our units of anything we build is going to be affordable.” It could be (restricted for) 80% to 60% AMI. I don’t want to prescribe it because I do believe if it does have the income restrictions on it — whatever that affordable housing range is — it will give individuals a pathway out of poverty.
As (someone’s) income increases, (they’ll) have a place (they) can go. Right now, especially when it comes to subsidized housing, (someone) can be working, (their) income is going up but (they) don’t have a pathway to leave what was once called public housing because (they) have no workforce housing that (they) can actually go into, which causes us to have an individual in a unit that possibly could leave.
I believe that almost any type of workforce housing that they can put out in the private sector would really help all families be able to find quality places to live. I don’t want to be too prescriptive; it’s a private market and I understand it and I know they have to make money as well. But I do think if they’re receiving any tax-increment financing, tax-increment grant, infrastructure (money) — those are public dollars, and public dollars come from the poor, the rich, everyone. I think we should take a look at and see what we could do to incentivize the private sector and developers to put some affordable housing or diverse price-point housing in anything that they do.
What would you say to developers who might say financing thresholds are too tight or construction costs are too high to include income-restricted units? Are those things they could mitigate?
Charlotte wouldn’t be the first city that it was done in — Nashville, D.C., New York, Miami, other places are doing it. How they’re doing it is the key. Now, they have tools that we don’t have — some of that is from the state level — and, in general, I don’t want to force anybody. I really want them to want to do it, like I do, but I’m a mission-driven agency. But I do think, and you have seen some cases in the city, some developers have said, “I will.” I think that needs to be the watermark from now on — “I’ll do something. I don’t believe we can do nothing.”
Some have called for an oversight committee to be established to monitor how the city’s Housing Trust Fund dollars are spent. Do you agree with that increased level of community engagement or accountability?
You want to make sure that the process can be faster (and) more efficient. Community input is something that’s really important to us. We have an actual resident on our board. It means something to me to have one of our customers on the board, telling me what’s happening in the community. I think it’s a good thing — whatever we do, though, we’ve got to make sure it doesn’t slow the process down (and) it only finds a way to expedite the process. Community input is something that should be welcomed … but you can’t prescribe too many things because, at some point, you just can’t afford it. It’s one of those things that’s a balance, I believe, but community input is extremely important.