The challenge of building more affordable housing in Charlotte can be described in a word problem. Here’s how it goes.

The Charlotte-Mecklenburg Housing Partnership wants to build a $16 million affordable apartment community. But when rent will average only $600 per unit each month, the bank will only lend $3.5 million. Where does the rest of the money come from?

The problem is getting increasingly hard to solve as Charlotte’s booming rental market drives up costs — even though the issue of affordable housing has perhaps never been more at the forefront of our civic conversation.

Three experts in the field discussed the problem at a meeting Friday for candidates in this fall’s municipal elections, hosted by the Greater Charlotte Apartment Association.


And they revealed a handful of critical problems that are driving rents increasingly skyward, even for apartment units without all the bells and whistles.

The definition of affordable housing is complicated and continually shifting. It’s pegged to the median income of a city, and follows the assumption that families should not spend more than one-third of their income on housing.

In Charlotte, the median household income is about $53,000 — meaning they could afford rent of about $1,300 per month. That still leaves half the population who does not make that much.

Ken Szymanski, CEO of the Greater Charlotte Apartment Association, said that only about 20,000 units rent for less than $800 per month in the city, and that federal housing assistance programs only meet about 25 percent of the need in Charlotte.

[Agenda story: What does affordable housing mean in Charlotte?]

So why doesn’t the city just build more?

For one, the grants and resources used to fill the gap outlined by the Charlotte-Mecklenburg Housing Partnership are stretched thin, said Liz Ward, the partnership’s vice president of development.

In the current market, private developers aren’t able to step in and build new apartments with affordable rents.

“It’s impossible to construct apartments at the price level,” said Michael Tubridy, Charlotte managing director for Crescent Communities. “No matter how affordably you try to program them, the average apartment is going to command much higher rent.”

That’s due to rising land costs — which don’t change whether it’s a luxury apartment or affordable one — and rising labor costs. With the current construction boom, general contractors are at capacity and essentially able to “name their price,” said Hollis Fitch, ‎principal at The Flatiron Group.

Tubridy gave an example of how quickly those costs have translated into higher rent.

Take a typical garden-style apartment in the University City area. Crescent has done several, including essentially identical projects in 2012 and this year.

In 2012, construction costs ran about $115,000 per unit. That requires a rent of $1,150 to make the deal work.

In 2017, construction costs have risen to $175,000 per unit. That equates to a $1,400 a month rent.

The Greater Charlotte Apartment Association suggested several tweaks that could make things easier for affordable housing to be developed. One idea is to eliminate the need for rezoning on projects that include a certain number of affordable housing units. Another is to offer property tax rebates on affordable housing projects.

But even with these fairly extreme changes, the housing crisis won’t be solved.

“We’re not going to solve the affordable housing problem,” Szymanski said. “We can make it better, we can work on some of the issues, but we’re not going to solve it.”