Closing the gap

Nonprofit developer serves working poor in Charlotte.

By Ret Boney

CHARLOTTE, N.C. [05.25.04] – Charlotte and Mecklenburg County represent one of North Carolina’s wealthiest areas, with healthy salaries making nice homes affordable.

But for the county’s poorest workers, the search for quality affordable housing is a hard one.

About one-third of Charlotte/Mecklenburg households do not have housing they can afford, according to the National Low Income Housing Coalition.

Either they are paying too much compared to their income, or the quality is substandard.

The Charlotte-Mecklenburg Housing Partnership, a nonprofit housing developer and finance company, was created to address that need.

For the past 15 years, the group says, it has developed over 1,500 affordable housing units, both homes and apartments, and has helped nearly 700 families become homeowners through counseling, mortgages and other homeowner services.

Overall, the group says, it has helped improve the lives of more than 4,000 people directly, and another 60,000 counting all the residents that have benefited from its neighborhood revitalization efforts.

The housing partnership came about when a 1987 housing task force made up of city and county citizens identified a gap between public housing, built using federal dollars for the lowest-income residents, and market-rate housing, built by for-profit developers for the population as a whole.

“There was a gap between the market and public housing,” says Pat Garrett, partnership president since 1989, “there was this group of people that wasn’t being served.”

The group started mainly as a homebuilder for the working poor, a “full-cycle lender” providing counseling services, budgeting assistance, low-interest mortgages, and quality homes, with some financing for apartment complexes.

In 2000, with a shift in the housing market that saw for-profit builders starting to serve the single-family affordable housing market, the partnership’s role became less critical.

In response, the group shifted its focus to another market gap, building rental housing for low-income workers, while continuing to provide low-interest financing and related services for homeowners.

“We’ve had the ability to change when we needed to,” says Garrett.

The group today focuses on reviving existing neighborhoods; encouraging homeownership through counseling, training and low-interest mortgages; and building and managing affordable rental properties.

Quality is not sacrificed in making affordable housing, says Garrett, because building costs are the same for nonprofit and for-profit developers, and affordable housing units are usually indistinguishable from “market-rate” units.

Rather, she says, creative and often complex financing, both for production costs and mortgages, make these units affordable for the working poor.

One of the group’s newest projects is The Gables at Druid Hills, a 63-unit development for people age 55 and older with an average income just over $11,000 that offers one- and two-bedroom apartments, elevators, a common area, walking paths and gardening plots for residents.

It was developed with funds from the city, Wachovia, the housing partnership and Bank of America with tax credits, a form of federal financing through which, exchange for investment, corporations receive credits against their federal tax filings.

Just breaking ground is Rocky Branch, a 192-unit rental development that will house mainly low-income people and was cobbled together with financing from the sale of bonds, city money, federal dollars and tax credits.

Garrett credits the group’s success in large part to its strong relationship with the banking community, county and city, which she says considers her a partner.

James Mitchell Jr., Charlotte’s District Two councilman and a partnership board member since 1999, agrees, adding that each dollar the city invests with the group is leveraged by other funds at a ratio of 12 to one.

“They do a good job not only of building roofs, but of empowering and engaging neighborhoods,” he says, citing work done in the Seversville and Genesis Park areas.

Garrett also says the partnership has a strong board of directors that includes representatives from the city council, county board of commissioners, for-profit developers and financial powerhouses like BB&T, Wachovia, Bank of America and PricewaterhouseCoopers.

Equally important, she says, two board seats are reserved for community members.

“You’ve got to pay attention to the people you’re working with,” says Garrett. “They’re the ones who live there all day every day.”

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