Finding Home: To Boost Affordable Housing, City Looks To Lower Barriers For Developers
A big factor in Mecklenburg County's affordable housing crisis is simple economics: The population is growing faster than the housing supply. To some experts, the solution also is simple: Build more housing of all types. But zoning and other regulations, as well as lengthy permitting processes, can make that difficult. So Charlotte officials are talking about how to lower those barriers.
A 2019 UNC Charlotte study found that the region's population grew about 2% a year from 2010 to 2017. But the total number of housing units grew just 1.3%. That's brought a housing shortage, and driven up prices for both renters and home buyers.
“The ultimate answer is we need more housing, period,” said Richard Buttimer, a professor of real estate and finance and head of the Childress Klein Center for Real Estate at UNC Charlotte.
“If we're going to continue to sustain the type of economic growth that we've seen in the Charlotte region over the last two decades, we will simply have more people living here and we got to have a place to physically house them."
That could mean more housing developments, more apartments near bus and transit lines, and more multi-story apartment buildings.
“Any increase in the housing stock at any price-point actually benefits everybody,” Buttimer said.
Need To Speed Construction …
But that's easier said than done. Charlotte's Housing Trust Fund and private-sector subsidies are spurring new construction of affordable housing. Several thousand units have been built in recent years and another 1,472 units are planned or under construction right now, according to city housing officials.
But that's barely chipping away at a countywide shortage estimated at 51,000 units for those making less than 80% of the area median income — $63,200 for a family of four.
With land and construction costs rising, developers say it keeps getting harder to make the numbers work, even on projects that get subsidies.
Changes in government rules at local, state and federal levels are also needed, said Taiwo Jaiyeoba, Charlotte's planning director and assistant city manager.
“Sometimes the barriers are rooted in policies, practices and regulations. And so some of the things that we're doing have focused in those areas,” Jaiyeoba said.
For example, Jaiyeoba said it can take three to six months to get planning approval for a complex project. He wants to shave 30 days off that timeline. And then there's the process of getting permits.
… And Speed Up Approvals
In late January, the city opened its new Charlotte Development Center on the ground floor of the government center uptown. It's designed as a "one-stop shop" for developers and property owners, with employees from six city departments all in one place. The goal is to speed up the time it takes to get projects reviewed and permitted, said Jaiyeoba.
“If the permitting process takes about 45 days, how can we get it down to about 21 days? So we've tested a few small-scale, moderate- and large-scale (projects) and we've been able to do that,” he said.
In another initiative, City Council last year approved new zoning rules for transit-oriented developments, near Blue Line light rail stations. They allow more density and extra height for developers that include affordable housing.
“The closer you are to the station platform, the higher you can build," Jaiyeoba said. "And then if you come in and you say we even want to go higher, how can we make sure that we incentivize you by you making some type of either contribution towards environmental sustainability or towards affordable housing, if you want to go higher."
Since last April, developers have submitted 28 petitions under the new rules, and 21 have been approved. About 1,500 parcels are affected. Jaiyeoba doesn't have any numbers yet on how many new housing units might be built because of the change. But a new online calculator gives a hint of how policy changes like these affect development.
“In the case of the Blue Line transit rezoning, our estimate using the calculator is that 450 more homes are possible between 2021 and 2023,” said Mike Kingsella, whose nonprofit consulting firm Up for Growth developed the tool.
“But that's not a one-time shock that's actually increasing the capacity for housing citywide in perpetuity. So it’s a huge benefit,” he said, after unveiling the calculator earlier this month at an uptown Charlotte conference hosted by the Urban Land Institute.
The calculator also helps gauge the effects of other changes, such as reducing review and permit times, relaxing parking requirements, and tax abatements.
An End To Single-Family-Only Zoning?
Another idea in the works is eliminating single-family-only zoning. Right now, 84% of Charlotte's neighborhoods are zoned for detached single-family units, Jaiyeoba said.
“We want to be able to encourage duplexes and triplexes and quadplexes — really moderate housing,” Jaiyeoba said. “There will always be single-family homes, but (we) want to make sure that we have more opportunities to build different housing products, regardless of where you live in the city.”
Charlotte already allows what are called accessory dwelling units — basement or attic apartments or garage units. And this change might not mean new construction, Jaiyeoba said. For example, it would allow subdividing a larger house into multiple units. That would give a modest boost in the number of housing units without radically altering the character of neighborhoods, he said.
City Council member Julie Eiselt expressed support for the idea last week at a housing forum uptown.
“I don't think we should be afraid of saying, 'Let's be able to put a duplex there or a triplex,'" she said. "But in particular, it isn't just across the whole city. Let's put it on our transit routes."
That's important, Eiselt said, because the city has not invested enough in its transportation system. So people wind up paying big percentages of their incomes on transportation.
New Planning Vision And Rules On The Way
We'll be hearing more about this and other ideas in the coming months. Jaiyeoba and other city officials are in the midst of drafting both a new vision for growth in Charlotte, called the 2040 Comprehensive Plan, and new rules to carry out the plan, called the Unified Development Ordinance.
City officials also are taking a look at development and utility fees, and whether they can be reduced for affordable housing projects.
Meanwhile, city officials also are targeting state and federal laws. In recent weeks, the City Council's Intergovernmental Relations Committee has recommended state and federal lobbying agendas for this year that includes housing-related goals. Just last week, the committee recommended seeking a change in state law that would actually reduce the percentage of affordable housing units required for housing subsidies. Assistant planning director Alyson Craig said that would help the city as it works with developers.
“State statutes are very specific in that financial assistance can only be provided for projects that have 20% of the project devoted to 60% (area median income) or below," Craig said during a recent City Council committee meeting. "And so while I agree that that's a need in our community, there's other needs.”
That missing middle is those who make 80-100% of the area median income, where there's also a housing shortage. Craig said the change would help encourage more developers to build mixed-income developments that include affordable housing.
Will Lawmakers And Neighbors Be Receptive?
Republican state Sen. Paul Newton of Cabarrus County said he's willing to work with cities and towns. He calls zoning and land-use regulations a major hindrance to development of affordable housing, accounting for up to one-quarter of the cost of development.
“You look at regulatory burden. It adds costs," Newton said last Thursday at a panel discussion uptown. "You talk about density issues, minimum lot sizes, it's a root cause, if not the root cause of the problem."
But even as local officials, builders and legislators talk about altering traditional planning and zoning rules, there's another, possibly more formidable barrier: neighborhood opposition, sometimes referred to as NIMBY, for "not in my backyard." Newton said he thinks that's not insurmountable.
“I think part of that is persuasion, convincing people that it's a societal benefit to go with YIMBY-ism, instead of NIMBY-ism. YIMBY-ism being ‘yes in my backyard,’” he said.
Newton said allowing more housing types makes sense. But he also said rules can't be changed without talking to property owners and making sure they get what he called "due process."
Jaiyeoba agreed and said the key is making sure residents have a say.
“We may never be able to truly eliminate NIMBYism — 'not in my backyard' — but if the community is informed about what's going on in that community and that is codified in a policy form, then the regulatory piece will help to bring that alive,” he said.
With that in mind, here are a few dates to remember: The City Council is expected to adopt its 2020 lobbying goals Monday night. The comprehensive plan is expected to be unveiled in September 2020, and the new ordinance will be up for approval in early 2021.
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