The Charlotte City Council voted Monday to spend all the money left in its Housing Trust Fund on subsidizing more than 600 affordable units.
The council approved allocating $9.2 million from the Housing Trust Fund and $6.6 million in American Rescue Plan Act (ARPA) funds for eight affordable housing projects. The vote drained the trust fund before it’s replenished with $50 million approved by voters this month in a bond referendum.
The money will maintain between 15 to 60 years of affordability for 632 units expected to be built with the city’s subsidy.
The money is “gap funding,” a term used to describe when low-income rents are too low to cover the costs of building and managing the property, according to housing policy group Local Housing Solutions. Some projects already received money from the city and are receiving a second round of funding.
In its presentation, the city said, “unprecedented changes in market conditions, including construction material pricing and interest rates,” led to higher costs for the projects.
For some affordable units, the maintenance and cost more than the rent the tenant pays. That’s why Charlotte’s subsidy for each project can only cover a certain time period — 15, 40, 60 years, for example — where it’s certain the units will remain affordable for people making lower than a designated percentage of the city’s median income.
The allocations approved by council Monday include:
- Fairhaven Glen — $1.15 million in gap funding to maintain 40-year affordability for 140 units on Nations Ford Road.
- Ovata at Reedy Creek — $2 million in gap funding to maintain 40-year affordability for 78 senior apartments on Newell Hickory Grove Road.
- Galloway Crossing — $1 million in gap funding to maintain 40-year affordability for apartments on East W.T. Harris Boulevard.
- Bishop Madison Homes — $250,000 to maintain 15-year affordability for nine for-sale units.
Grounds for Change — $4.5 million in gap funding to maintain 60-year affordability for 104 units on Park Road.
- Evoke Living at Morris Field — $5.5 million in gap funding to maintain 40-year affordability for 132 units.
- South Village Apartments — $4.7 million to maintain 60-year affordability for 82 units. Funding for this project will come from the city’s ARPA funds.
Easter’s Home, 21 units for homeless people on East Fifth Street, didn’t receive its $1.9 million gap funding request, but Charlotte Housing Director Shawn Heath said the project could still happen.
Read more at The Charlotte Observer
