Motels are being turned into one solution for Charlotte’s affordable housing problem
Charlotte doesn't have enough affordable housing. You’ve probably heard us say that many times in the past few years.
According to the development group Hines, the Charlotte metro area is short by about 25,000 housing units. And now there’s a new trend taking off in the city to try and chip away at that number: converting motels into permanent housing.
Alex Sands wrote about it for Axios Charlotte and she joins me now.
Marshall Terry: So how does it work? Are motel rooms just converted into something like a small studio apartment?
Alex Sands: So they take these existing rooms and they turn them into what they call micro-housing. The two I focused on in my story were by Sage Investment Group and they tell me that these units aren't much more than 300 square feet, but they always have a full kitchen. Then they also take the motel amenities, so things like the place where people in the motel eat breakfast or conference rooms and they can turn those into amenities for the new residents. So these residents, even though they're living in very small units, they have a lot of options for getting out and around the motels-turned-apartments.
Terry: So where is this happening in Charlotte?
Sands: So the two that my story focused on, those are both in the Sugar Creek I-85 corridor, there's a lot of attention here right now because it's one of the city’s Corridors of Opportunity. That means it's an area that has been underinvested in the past and the city wants to make more investments now. But I also noticed that there were a lot of motel conversions along the Blue Line, especially in the University area.
Terry: Is the city involved in funding these efforts to supplement private developers in doing these conversions?
Sands: No. So, companies like Sage and Vivo Living, that's another popular one, they're doing these on their own. They see it as profitable. They're making workforce housing because these are just lower rents naturally. They’re not these big Class A new apartment buildings that you're seeing all over Charlotte. They're easy to renovate. They're cheap to renovate, and they're small. So that just makes them a little bit more attainable to the average worker.
Terry: You write part of what’s spurring this on is some motel owners wanting to sell since the pandemic. Is that because their business just never rebounded?
Sands: Yeah, of course, the pandemic hit the industry hard. We're also seeing that a lot of these motels are aging. They're really outdated. Maybe the family has passed this property down generations and this new owner doesn't want to reinvest in the property. So rather than renovating them and bringing them up to a better condition, they're just selling these properties and they're usually getting a pretty decent deal.
Terry: Now what about people who don’t have a home and rely on these motels for a place to stay for extended periods of time? Wouldn’t this displace them?
Sands: Yeah. And we've seen that a bit in the past, where a developer has come in and there have been residents living long-term in a motel and they haven't gotten clear information on what's going to happen to where they're living. In this case, we know there are at least 65 families living in one of the motels that Sage Investment Group is going to come into and renovate. But the city has offered to help out, they’re contracting with Crisis Assistance Ministry to relocate those families.
Terry: And you found there are some community activists who aren’t on board with all of this, right?
Sands: I think it's more just skepticism. Whenever you have an out-of-town investor coming into an area like Sugar Creek, neighbors are going to be worried that they're going to prioritize making money over making an impact in the community. And there's always the concern that this could lead to gentrification or it could just take a place where there's some poverty and relocate that to another area. But I think this is a concern in all the Corridors of Opportunities that the city is investing in, so we see this all around town.
Terry: So, given the scale of the housing shortage in Charlotte, is this kind of motel-to-apartment conversion enough to make a dent in the problem?
Sands: Probably not. We're just talking about a handful of motels, so that really only adds up to a few 100 units at a time. And we know that we need thousands more affordable housing units and also, we’re just short on housing in general.