Does Charlotte have wrong focus in building affordable housing?

Does Charlotte have wrong focus in building affordable housing?

CHARLOTTE, NC (Steve Harrison and Ely Portillo/The Charlotte Observer) - Has Charlotte's strategy for building affordable housing been wrong?

For the second time in five years, a city-hired consultant has said the city's biggest need is to help Charlotte's poorest residents – not people like teachers and firefighters, who have received most of the city's focus.

The consultant's report touched off controversy among some housing advocates, as well as city officials, who said the two consultant's findings were being misconstrued and shouldn't be taken as a firm recommendation.

Five years ago, consultant Todd Noell told council members the city had enough "workforce housing" for people earning 60 percent or more of the area median income. Someone earning 60 percent of the area income means they would have made about $41,000 a year, under U.S. Housing and Urban Development guidelines for 2012.

The real problem, he said, was for the city's poorest residents who earn less than $20,550 a year, or 30 percent of the area median income. There, he said a gap of some 15,000 units existed.

As for people earning more than $41,000 a year? Noell said there was "plenty of supply" of housing.

"The greatest need we see is of the under 30 percent area median income," said Noell.

But in the last five years, city staff members and council members have focused on subsidizing housing for professionals such as teachers, firefighters and police officers – the so-called "workforce" housing that Noell said wasn't the area of greatest need. Such housing often includes people making about 80 percent of the area's median income, or $56,560 in Charlotte.

The issue was raised again earlier this week, when a different consultant, Christopher Kizzie of Enterprise Community Partners, told council members a similar story.

Kizzie said the biggest need – a gap of more than 21,000 units – is housing for very low-income renters, those making 50 percent or less of the area's median income. Many of the city's poorest residents move from place to place, facing evictions, sleeping on a relatives' couch or sometimes ending up in run-down hotels with weekly rates because they don't have enough money for a security deposit.

Republican council member Ed Driggs said he was surprised by the recent Enterprise Community Partners report. He wasn't on council in 2012 when Noell told council members the biggest need was for the poorest residents.

He said the city emphasizes housing for teachers and police officers because "they are seen as so deserving."

"That was a strong emotional argument in favor of addressing one housing problem, and an easier problem to address than the one at the bottom," he said. "It would take hundreds of millions of dollars to fully address the needs at the bottom of the scale."

After Kizzie gave his report to council last month, the city and housing advocates said his findings were misconstrued. In an interview this week, Kizzie said the housing shortage was significant for everyone earning less than the average wage.

"The city of Charlotte does not have enough affordable housing for all low-income renters who need it," said Kizzie. Although there are enough units mathematically to house those people, he said many of those units are occupied by people making more money.

"Even though there's sufficient supply," said Kizzie, "these (lower-income) households often encounter competition from higher-income households."

For example, imagine an older, three-bedroom apartment on Monroe Road that rents for $1,400 a month. That would meet the "affordability" standard for a family of four making 80 percent of the area's median income ($56,550), and it's counted toward the supply of units in that income range.

But just because it meets that standard doesn't mean it's actually occupied by the family of four making 80 percent of the area median income who needs it. There could be three young, single roommates living there who each could afford to spend more but choose to save money.

That's why Charlotte doesn't really have a surplus of affordable housing, even for people making 80 percent of the area's income or more, officials said.

"People who don't necessarily need to live in that 80 percent (housing) are living there," said Pam Wideman, the city's housing and neighborhoods director. "What we have is a unit mismatch, rather than a surplus."

That means, Wideman said, many people making moderate incomes are spending too big a share of their income on rent.

"They're paying more than 30 percent, more than 50 percent, for their housing," she said. Studies have found almost half of renters in Mecklenburg County are "cost-burdened," spending more than 30 percent of their income on shelter.

Peter Kelly, a local housing advocate, said Enterprise Community Partners was comparing "apples and grapefruits."

He said they compared the number of families who need housing with the number of apartments available, but didn't do a deep enough dive to see if the apartments had enough bedrooms and space.

"The problem is that the number of apartments does not differentiate based upon the size of the apartment," he told council members in an email.

Building apartments for people with very low incomes is the most costly and difficult. While the city can subsidize private developers building at 80 percent of the area's median through its housing trust fund, it's far harder to attract people to build units affordable to someone making $15,000 a year. That person would need an apartment renting for about $375 a month, in order not to exceed the affordability benchmark of spending no more than 30 percent of their income on housing.

The city has convinced some developers to include affordable housing in market-rate developments, but it's almost always for people earning up to 80 percent of the median income, about $56,550 a year for a family of four. That's the case for the new River District west of the airport, where the developers, Lincoln Harris and Crescent Communities, have agreed to reserve 365 out of more than 4,000 units for people earning 80 percent or less of the median income. In SouthPark, Synco Properties has agreed to reserve 55 apartments out of almost 1,000 at a new development for people at 80 percent of the median income.