A report released this week by the Urban Institute at UNC Charlotte offers 12 strategies for expanding the supply of affordable housing in the City of Charlotte and Mecklenburg County. Prepared for the Charlotte-Mecklenburg Housing Advisory Board, the 66-page report outlines policies that ‘can be used to finance and facilitate the development of quality affordable housing, with a focus on long-term affordability.’
While many of the suggestions have been embraced for some time by REBIC and its member organizations, others — such as Deed Restrictions, Mandatory Inclusionary Zoning, and Housing Impact Fees — have been consistently opposed by the real estate industry, and are illegal in North Carolina.
The recommended strategies are as follows:
Expedited and Predictable Permitting Processes & Fee Waivers: Currently, no expedited process exists in Mecklenburg County for plan review and permitting of affordable housing development. REBIC has been working with Charlotte and Mecklenburg County over the last two years to improve the permitting process for all developers, and believe this to be a critical tool in expanding the supply of affordable housing.
Housing Impact Fees: A fee on non-residential development ‘to offset the increased need for affordable housing’ generated by new development. This tool is currently illegal in North Carolina, and would be strongly opposed by REBIC and other real estate industry groups.
Housing Trust Funds: A dedicated source of public funding for affordable housing. Charlotte has had a local Housing Trust Fund since 2001, which is periodically enhanced through a community improvement bond. REBIC and its member organizations have consistently supported this strategy, and are endorsing a 2016 bond referendum that would add $15 million to the fund.
Land Use Incentive Policies: Would provide grants and/or fee reductions to encourage affordable housing development, paid for through broad funding sources such as property taxes. REBIC would support this approach, as long as the incentives are financially sufficient to encourage developer participation.
Strategic Use of Public, Private, and Non-Profit Owned Land: Land owned by the City, County, School Board or other public agencies is sold at a reduced price, conditional upon the inclusion of a certain percentage of affordable housing units. For example, an ongoing sale by Mecklenburg County of 17 acres in Uptown’s Second Ward would include 120 units of affordable housing as currently proposed.
Tax-Increment Financing & Synthetic TIFs: Incentivize and pay for construction of new buildings and public infrastructure to improve property values and tax revenue in a targeted area, then using those increased revenues to pay for affordable housing projects. Rarely used in Charlotte, but most notably in the mixed-income Brightwalk development.
Increased Use of Low-Income Housing Tax Credit: This 4% tax credit is available for projects financed with at least 50% tax-exempt bonds, but requires additional sources of equity (such as the Housing Trust Fund), to make projects financially feasible.
Zoning Overlays for Affordable Housing: Creates a by-right overlay zoning district with modified standards to incentivize affordable housing developments. REBIC supports this approach, and believes it should be evaluated when the City begins drafting its Unified Development Ordinance early next year.
Community Land Trusts: Typically nonprofit groups, these trusts own land and build affordable housing on it. The residences, but not the land, are sold with resale restrictions and affordability requirements to homebuyers.
Affordable Housing Deed Restrictions: Control the resale price of a home to protect long-term affordability. REBIC has serious concerns about the use of this tool, as it restricts the ability of homeowners to accumulate equity from rising property values.
Employer-Assisted Housing: A program partly or fully financed by an employer to benefit employees.
Inclusionary Zoning: Either voluntary or mandatory policies that encourage or require a certain percentage of affordable units in all new residential developments. Charlotte has had an Voluntary Mixed-Income Housing program in place since 2013, but it has yet to see any takers. Mandatory Inclusionary Zoning is illegal in North Carolina and strongly opposed by REBIC and other real estate industry groups at both the state and local levels.
As a member of the Housing Advisory Board, REBIC looks forward to working with the City and County to identify additional policies and tools to improve the supply of affordable housing. We will continue to discuss the recommendations of the UNC Urban Institute report with other community stakeholders, and determine opportunities to implement strategies that are both legal and effective.