We had another meeting, more talk and no action this week on the Charlotte City Council. Critical issues require decisive leadership. The past two decades have been an era of unprecedented growth for our city; with that growth, property values have risen and too many Charlotteans are now unable to afford housing.
A lack of affordable, privately financed housing often leads to publicly funded entitlements that cost taxpayers millions. Our current ad-hoc approach to affordable housing randomly forces some developers to “voluntarily” include affordable units to receive rezoning approval, while exempting others. This offers little certainty to private investment and fails to adequately address the problem.
We must address Charlotte’s affordable housing need before it becomes too late. It’s time for creative solutions to solve the housing crisis in a way that encourages increased philanthropy, private investment and fiscally responsible stewardship of our tax dollars. The solutions require a clear understanding of the structural market obstacles that prevent developers from increasing the affordable housing stock, thus limiting housing choice and diversity.
As a commercial real estate broker, I can attest that expensive land is the primary obstacle to increasing affordable housing throughout the city. We must coordinate with the private and philanthropic sectors to create a land trust. The primary objective of the land trust will be to purchase, through private investment, sites dedicated to building affordable housing that are otherwise cost prohibitive. Neutralizing land cost will make affordable housing a more attractive investment to the private sector, thus increasing supply.
Return on investment is also a constraint. Too often, apartment owners are faced with the dilemma: make investments in an aging property and raise rents, or let it decline beyond the point of return while keeping rates low. We must target aging apartments and leverage housing trust dollars to renovate in lieu of tearing them down. In return, owners would keep rates affordable for a predetermined period while earning a reasonable return on their investments. This will ensure we’re able to increase affordable housing, limit blight, and encourage private operation of these properties while limiting taxpayer exposure.
Governmental mandates for housing dispersion hinder accessibility, affordability and limit supply. We must re-examine our locational policy to match today’s evolving affordable housing market. Current policy sets tight restrictions on where affordable housing can be located. We can either achieve dispersion or have a meaningful reduction in the 34,000-unit deficit, but not both.
A good start is to double the multi-year bond offering from $15 million to $30 million, or pursue alternative means of financing, just as my colleague Ed Driggs proposed to the City Council earlier this week. Both the Council and the community have determined that affordable housing is a priority and it should be funded accordingly. It’s going to require a responsible public investment to attract additional private and philanthropic investment. These non-public investments will not only help solve our affordable housing shortage but will also generate millions in economic activity and city revenue.
Charlotte desperately needs more affordable housing. The city must remove barriers that slow down delivery of product. We need 21st century solutions to solve the problem. By combining philanthropic leadership, private investment, and cooperation from our city, we can solve this crisis and generate economic development in all corners of our city. Charlotte Deserves Better.