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Developers Pass On Charlotte Low-Income Housing Incentive

Charlotte Observer
If Charlotte City Council members revisit the density bonus, they are not likely to follow the town of Davidson’s model, which is to require developers to set aside some units for affordable housing. They would likely consider more flexible options.";

By Steve Harrison/Charlotte Observer

Nearly three years ago, the Charlotte City Council approved an affordable housing “density bonus” for developers.

If a developer wanted to build in affluent areas, the city would allow it to build extra units if it included some apartments or homes for low-income residents.

But no one has participated in the program, and the city may be starting over.

“No one has actually done it,” said Pam Wideman, the city’s deputy director of Neighborhood and Business Services. “We have had about 15 inquiries, but there are no units on the ground as a result of the program.”

The density bonus was pushed by former Mayor Anthony Foxx as a way to disperse low-income housing from the crescent that runs from the airport to east Charlotte. The bonus can be used in areas where the median home value is greater than $153,000 – almost all areas outside of Interstate 485, as well as south Charlotte between South Boulevard and Monroe Road.

Mayor Dan Clodfelter, who lost a Democratic primary runoff election to Jennifer Roberts on Tuesday, said the city should “revisit” the program.

“The incentives we thought would work haven’t worked,” he said.

It’s unclear why no one has taken up the city’s offer.

But one reason may be that it’s not particularly hard to win a rezoning that allows for additional housing units.

The City Council historically doesn’t drive a hard bargain with developers, so they may have little reason to spend time and money on low-income housing.

An example would be a recent rezoning for nearly five acres at the corner of Park and Sharon roads – an area where the city would love to have affordable housing.

The land had been zoned for three residential units per acre. Despite opposition from neighbors, council members approved a rezoning in August that would allow for nearly 12 units per acre.

All of the houses and townhomes would be market-rate. There wasn’t any council discussion about a density bonus or hinting that the developer should set aside units for so-called “workforce housing.”

Another example of the council’s willingness to work with developers came this September, in the Cherry neighborhood.

Council members approved a large rezoning along Kings Drive, which included office, residential and retail. They had initially rejected the rezoning, but then relented when the developer, Goode Properties, agreed to lower the height of a building by 6 feet.

The building will now be 100 feet, instead of 106 feet.

“I have never been asked (by developers) about it,” Republican council member Kenny Smith said about the density bonus.

He said he thinks land is so expensive in affluent areas that the bonus isn’t worthwhile. For instance, in an area zoned for eight residential units per acre, a developer could receive two extra units.

Collin Brown, a land-use attorney with K&L Gates, said he thinks the program can still work, though on a small scale.

“There are opportunities to do pockets of affordable housing,” said Brown, who represents a number of developers before the city. “I’m optimistic.”

He said Charlotte-based Synco Properties and Schlosser Development Corp. of Austin, Texas, are considering adding workforce housing to a proposed retail and residential development at Sharon and Colony roads. It should be noted that that project has run into resistance, and adding affordable housing could help it get council approval.

If council members revisit the density bonus, they will unlikely follow the town of Davidson’s model, which is to require developers to set aside some units for affordable housing. So-called “mandatory inclusionary zoning” is the third rail of local politics.

Davidson was sued by two developers over its mandatory plan, and the town settled out of court. The program is still in place, but the fees developers must pay if they don’t include affordable housing have been reduced.

Steve Harrison: 704-358-5160, @Sharrison_Obs