North Carolina

‘We missed a major opportunity.’ Affordable housing lags near new Charlotte light rail

A light rail train passes through New Bern Street at Rail Crossing Lane, where high-end apartments keep springing up in South End. Despite city leaders saying affordable housing should be a priority near the light rail, almost none has been built.
A light rail train passes through New Bern Street at Rail Crossing Lane, where high-end apartments keep springing up in South End. Despite city leaders saying affordable housing should be a priority near the light rail, almost none has been built.

Long before the mid-March grand opening of Charlotte’s light-rail extension, city leaders vowed to help build affordable housing along the Blue Line.

More than 15 years ago, a Charlotte City Council plan recommended that the city buy land and take other steps to ensure the people who most need access to public transportation and jobs were not priced out.

But that didn’t happen.

Instead, the South End exploded with development after the Blue Line started running in 2007, turning into a haven for young professionals who pay $1,500 a month or more to live in new apartments near the tracks.

Almost none of the housing is reserved for people with lower incomes. Now, the same thing appears to be happening on the light-rail extension, which runs from uptown to UNC Charlotte.

“The talk about affordable housing was a publicity stunt, or they (city officials) don’t care about the poorest among us,” said Corine Mack, president of the Charlotte NAACP.

Almost 5,500 apartments are planned or under construction along the route. Most are high-end, luxury developments. Only a pair of developments totaling about 250 apartments, less than 5 percent of the units coming to the area, are reserved for people who need low-cost housing.

Charlotte leaders acknowledge that their strategy to draw affordable housing to the Blue Line has been ineffective. But some said affordable housing near rail lines remains an attainable goal.

Officials plan to explore whether low-cost housing can be built on excess land that was acquired for the extension, said Pamela Wideman, the city’s director of housing and neighborhood development.

Wideman did not provide a timetable for officials to study options or propose solutions.

“For me, a successful rail line includes diverse price points,” Wideman said. “It’s not just for wealthy people.”

But there are only about 14 acres of city-owned land left over along the 9-mile rail extension, a spokeswoman for the Charlotte Area Transit System said. Some of it is covered with stormwater runoff ponds and might not be suitable for development, and all are subject to federal restrictions that could make it more complicated to build.

Charlotte’s failure to draw more low-income housing near the rail line serves as a cautionary tale to advocates for the poor and transit planning experts, who point to other cities that have seen better outcomes.

Places such as Seattle and Denver have created public-private partnerships to provide low-cost loans for affordable housing near transit stops. City Council member LaWana Mayfield said Charlotte should have planned ahead and bought land for future affordable housing projects before private developers and real-estate speculators moved in.

LaWana Mayfield Robert Lahser

“We missed a major opportunity,” said Mayfield, chair of the Housing and Neighborhood Development Committee. “When the Blue Line opened in South End, the previous council had the same opportunity. Unfortunately, we did the exact same thing our predecessors did, and missed that ball.”

‘No other plan’

When Charlotte officials began reckoning with the potential impact of light rail, the logic behind the drive for affordable housing was simple: Transit would help connect people to jobs and boost economic opportunity for residents who can’t afford a car.

A 2002 city policy that was supposed to guide development said leaders should “aggressively pursue opportunities” to partner with private companies to build low-cost housing within a 1/2-mile walking distance of transit stations.

Officials envisioned providing government subsidies to mixed-income developments where well-to-do residents would live next to families who made about $53,000 a year or less. The city should encourage “a minimum of five percent up to a maximum of 25 percent” in multifamily buildings be affordable, according to documents.

But of the nearly 4,300 new housing units built in South End since 2007, almost none are reserved for lower-income renters. South Oak Crossing, built by the Charlotte-Mecklenburg Housing Partnership near the Arrowood Station, are the only new units built along the line for affordable housing. The development includes 100 income-restricted apartments where rents range from $390 to $915, depending on how much tenants make, and 92 market-rate units that cost up to $1,025.

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And Charlotte’s highest profile project along the original Blue Line fizzled. Before the light rail opened, the city spent more than $9 million buying land near South End’s Scaleybark station, clearing buildings and other site work.

Leaders agreed to sell 16 acres of land to Pappas Properties, and the private developer agreed to include 80 units of affordable housing for families making less than roughly $40,320 a year.

But more than a decade later, none of the affordable housing has been built. The land sits mostly idle, except for several dozen new townhouses under construction with prices starting around $400,000.

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Former city council member Michael Barnes, a Democrat who served from 2005 to 2015, said the Scaleybark project killed momentum for affordable housing along the light rail.

“The city hung its hat on Scaleybark,” Barnes said. “There was no other plan for anything.”

Michael Barnes answers a question during The Charlotte Observer/WBTV mayoral debate sponsored by Duke Energy and hosted by Queens University of Charlotte on Tuesday, September 1, 2015. David T. Foster III

‘Out of the question’

For years, a top priority of the City Council has been to disperse affordable housing to avoid concentrations in poor neighborhoods. Clusters of poverty have been linked to crime, school segregation and other social ills.

Barnes said council members agreed that Optimist Park, Villa Heights, Belmont and other neighborhoods adjacent to the Blue Line extension would be hurt by adding government-subsidized apartments since they were already beset by poverty and blight.

“We needed to let the market lift values before we introduced affordable housing,” he said.

Former Republican city council member Kenny Smith said the issue reflects how affordable housing was not a major priority for city leaders until violence erupted after the fatal 2016 police shooting of Keith Lamont Scott. Following the unrest, city council members said they understood the frustration and vowed to restore public trust. In a letter to the community, they promised to help build or preserve 5,000 units of affordable and workforce housing over three years.

“Everybody was not on board until two years (ago),” said Smith. “The riots changed everything.”

Adding to the city's concerns: A 2014 study from Harvard and UC-Berkeley showed that poor children in Charlotte are less likely to escape poverty than their peers in America’s 50 largest cities, ranking Charlotte dead last for economic mobility.

Now, Smith said, city leaders have few ways to bring affordable housing to the Blue Line unless they purchase property – an increasingly expensive proposition along the Blue Line route.

Kaleia Martin knows how pricey that can be.

Martin, who grew up in Charlotte and rode the light rail as a teen, has been searching for housing she can afford since she graduated last year from UNC Chapel Hill with a master’s degree in social work. But she is living in her parents house in northwest Charlotte to save money.

“It would be amazing” to live on the Blue Line, said Martin, 24, who earns about $39,000 a year. “In my situation, it doesn’t make sense to live in a $1,500 a month apartment. I’d be spending two-thirds of my income.”

“I don’t know anyone I graduated with who can afford to live on that rail line,” she said. “We already know it’s out of the question, so we don’t even plan on going there.”

‘Time for Charlotte to step up’

CATS chief executive John Lewis wants to build three new transit lines. They ‘d go to the airport, to Matthews and to Lake Norman.

“With future alignments CATS must be more strategic about land acquisition” to accommodate affordable housing, Lewis said.

But the timetable for the new rail lines is uncertain since it could cost as much as $7 billion and CATS has not said how it will pay for them.

Some affordable housing is coming to the Blue Line Extension. At North Tryon Street and Old Concord Road, Ohio-based NRP Group is planning to break ground this summer on 204 apartments reserved for people making 60 percent or less of the median income, or about $53,000 a year for a family of four.

A light rail train passes through New Bern Street at Rail Crossing Lane station heading to uptown Charlotte on Wednesday, March 28, 2018. Luxury apartments catering to young professionals have come to dominate South End, and the same sort of high-end building is marching up the light rail's northern extension. Jeff Siner

The company received $5.1 million from the city’s Housing Trust Fund last year, along with $1 million in federal housing tax credits and a $16.5 million tax-free bond issuance. NRP Group senior vice president Aaron Pechota praised the city for supporting the plan with trust fund money.

“I think the city of Charlotte’s been very proactive,” Pechota said. He said finding the site at Tryon and Old Concord took years, and that financing an affordable development — with a mix of city funds, federal tax credits, bonds and other money – is a much bigger challenge than simply building luxury apartments along the transit line.

“We found a site that needed some TLC,” he said.

But others said Charlotte has already missed its window to build any significant amount of affordable housing on the light-rail extension. Land values shot up as the opening approached, which limits the city’s ability to purchase or entice developers to build low-cost housing.

For instance, a patch of land near the future Parkwood Station sold for $525,000 in 2004, records show.

In 2013, an investor purchased the site for just under $1.6 million. Then, in 2017 NRP Group bought the land for $6.6 million — a more than four-fold increase — and started construction on 309 luxury apartments.

“We didn’t know then what we know now,” said Wideman, the city neighborhood development official. “You really have to be proactive about preserving the land.”

But advocates for the poor said Charlotte leaders should have anticipated what might happen based on their experience with the original Blue Line.

Melinda Pollack, vice president for transit-oriented development in Denver for Enterprise Community Partners, a national nonprofit focused on affordable housing, said it is well known that without significant intervention and planning from cities that transit lines are likely to primarily benefit the well-to-do.

"The land prices will escalate around these transit stops," Pollack said. "The market will price out people with lower incomes."

Michael Gallis, chief executive officer of Gallis & Associates, a Charlotte-based-developer of metropolitan planning strategies, said Charlotte's failure to move proactively means multifamily housing along the Blue Line will remain expensive — largely excluding people who could benefit from access to jobs and educational opportunities transit can provide.

Charlotte Mecklenburg Opportunity Task Force cited a severe shortage of affordable housing as a major hurdle for Charlotte’s poor.

Rent has jumped 36 percent in the past five years in Charlotte, climbing to a monthly average $1,142. Officials acknowledge the city has an affordable housing shortfall of 34,000 units. Last year, a consultant told City Council that the biggest – 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.

“The whole system is screwed up at this point,” Gallis said. “It’s time for Charlotte to step up.”

In Durham, officials who plan to build light rail have set a goal of having at least 15 percent of housing units within a half-mile of stations be for residents earning less than 60 percent of the average median income.

“Our light rail is probably 10 or 12 years out,” said Terry Allebaugh, a member of the Coalition for Affordable Housing and Transit in Durham, an advocacy group that pushed for inclusion of affordable housing.

“We want to discuss now how we can ensure people who need transit can live there," he said. “People said ‘Charlotte didn’t have these discussions and look what happened there.’ ”

Clasen-Kelly: 704 358-5027