Charlotte City Council votes to incentivize affordable housing development

February 19, 2013 at 8:00 am 1 comment

Consultants hired by the city of Charlotte had advised the city council back in October that it needed to create more affordable housing for the city’s lower-income residents.  According tot he consultants, Charlotte is short 15,000 units for residents making less than 30 percent of the median income, but has a surplus of 10,000 units for those making more than 60 percent of the median income. Last night, in response to this recommendation, Charlotte’s City Council voted to provide developers with a “density bonuses”– an allowance to develop more units than what the zoning laws allow– if they incorporate affordable housing into their development. Developers could then build more market-rate units to offset the cost of the affordable units.

Interestingly, what the city council voted on would not actually be targeted toward the city’s poorest residents– the ones, mentioned above, that make less than 30 percent of the median income, and who face a significant affordable housing deficit. Instead, these affordable units would be for those making 60 to 80 percent of the median income.

Zoning laws have often been used to delineate boundaries and exclude certain groups. For example, by regulating minimum lot sizes, minimum home sizes, density, etc, zoning ordinances have effectively been used to steer away lower-income residents. This kind of initiative falls under the category of ‘inclusionary zoning‘– efforts to ensure that development within a city include housing opportunities for a mix of incomes. In many cities across the country, inclusionary zoning has been successful in reversing this segregation. Inclusionary zoning helps to incorporate affordable housing across cities, rather than letting it get clustered in certain areas, as it currently is in Charlotte.

The density bonus program approved by the city council is an example of voluntary inclusionary zoning. Developers are given the bonus if they choose to build affordable units, but they don’t have to. Other cities have implemented mandatory affordable housing programs, where developers are required to set aside a certain percentage of their units as affordable.

Mixed-income developments are good for cities and communities. The ultimate impact of Charlotte’s new program, however, is uncertain. Since it does not target those residents that are most in need of affordable housing, it is not addressing the root problem identified by the consultants in the first place.  The city’s poorest residents will continue to be relegated to the clusters of low-income housing, and even then will continue to face a shortfall in affordable units. Also, since the new program is voluntary, developers would have to opt into this program. The density bonus may be a big enough incentive some, but it is yet to be seen whether it will it be enough to encourage affordable housing on the scale that it is needed.

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Entry filed under: Economic Development, Housing. Tags: , .

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