New Private Fund To Help Preserve Existing Affordable Apartments
A new private sector housing fund has raised $58 million to buy and preserve existing apartments in Charlotte as affordable housing.
The Housing Impact Fund is working with the city of Charlotte, Mecklenburg County and the private Charlotte Housing Opportunity Investment Fund. Ascent Housing of Charlotte is buying and managing the properties.
The company plans to convert about 1,500 units over the next two years — all reserved for low-income renters.
Ascent President Mark Ethridge said those apartments will be in gentrifying areas near jobs, transit and services.
"There are neighborhoods that I think anybody could identify that are near major public and private investments, that are in mixed-income areas, that you know that affordability is eroding," Ethridge said.
The Housing Impact Fund was started by local investors Nelson Schwab III and Erskine Bowles and includes $15 million from lead investor Truist Financial. Other investors include Atrium Health, LendingTree, Movement Mortgage and nine local real estate development firms.
The new fund will become an equity investor in projects acquired by Ascent. The company has invested in two projects over the past two years - Sharon Oaks Apartments off North Sharon Amity Road and HillRock Estates off the Eastway in East Charlotte.
A third project — Lake Mist apartments on Old Pineville Road — is the first investment for the new fund.
"It's literally on a light rail stop at South Boulevard and Archdale. It's a sub-market where rents have increased 34% in the last five years," Ethridge said.
Apartments acquired by Ascent and the fund will have deed restrictions that require them to remain affordable for 20 years. That's also the expected length of the fund. After that, new owners could decide to end affordability. But Ethridge said they'll try to sell to investors who will commit to preserving affordability, or profits from the fund could be somehow reinvested to achieve that goal.
"We've given every option we can to try to see affordability continue at these sites beyond the 20 year period," Ethridge said.
Ascent said the apartments would be for households making less than 80% of the area median income, or AMI. But about one-third would for people who make less than 30% of AMI. That's less than $24,000 a year for a family of four.