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Action Plan: Solving Charlotte's 36,000 Affordable Housing Deficit with Expansion and Innovation

As Mayor of Charlotte, NC, addressing the affordable housing crisis requires a balanced approach that builds on existing successes while introducing innovative strategies. With nearly half of residents cost-burdened and a deficit of 36,000 affordable units, this plan aims to create and preserve housing, targeting a 50% reduction in the gap within 10 years. Below, we outline enhancements to current initiatives, new techniques, funding sources, and projections.

Expanding Current Programs

Enhancing the Housing Trust Fund (HTF) and scaling the Charlotte Housing Opportunity Investment Fund (CHOIF) to increase home ownership opportunities

Introducing Innovative Solutions

Adopting cutting-edge methods that reduce costs, accelerate construction, and ensure sustainability.

New Funding Sources

To finance these initiatives, Charlotte must diversify beyond traditional bonds and private donations

New Organizations to Partner With

To execute this plan, Charlotte should collaborate with organizations not currently active in its housing ecosystem

Vision

To create a Charlotte where every resident has access to safe, affordable, and opportunity-rich housing by integrating innovative construction and financing techniques, fostering new partnerships, and enhancing proven local initiatives. The goal is to reduce the affordable housing gap with 25,900 homes within 10 years while promoting equitable economic mobility.

Current Techniques Showing Progress

Charlotte has made strides in affordable housing through initiatives like the Housing Trust Fund (HTF), Charlotte Housing Opportunity Investment Fund (CHOIF), and partnerships with organizations like Local Initiatives Support Corporation (LISC) and Habitat for Humanity. These will be enhanced as follows:

1. Housing Trust Fund (HTF) Enhancement (https://www.charlottenc.gov/Streets-and-Neighborhoods/Housing/Resources-for-Developers-and-Contractors/Housing-Trust-Fund)

- Current Success: Funded by voter-approved bonds, the HTF has supported 10,818 permanent housing units and 888 shelter beds since its inception.(https://www.charlotteobserver.com/news/local/article260095410.html)

- Enhancement: Increase bond referenda frequency to every 2 years (from every 4), aiming for $75M per cycle to fund 1,500–2,000 units annually. Streamline the application process for developers by creating a digital portal for HTF proposals, reducing approval times from 6–12 months to 3–4 months.

- Impact: Faster project approvals and increased funding will accelerate unit creation, targeting 2,000 units per year by Year 5.

2. Charlotte Housing Opportunity Investment Fund (CHOIF) Scaling

(https://www.liscstrategicinvestments.org/choif-charlotte-housing-opportunity-investment-fund)

- Current Success: Managed by LISC, CHOIF has raised $53M in private funds, leveraging $167M in total development for 1,047 units, 93% of which serve households earning ≤80% AMI.(https://www.lisc.org/our-stories/story/charlotte-housing-opportunity-investment-fund-creates-affordable-housing-and-model-future/)

- Enhancement: Expand CHOIF’s private investment pool to $100M by Year 5 by engaging new corporate partners (e.g., tech firms like Red Ventures, Honeywell) and offering tax incentives for contributions. Pair CHOIF with federal Low-Income Housing Tax Credits (LIHTC) to maximize leverage.

- Impact: Scaling CHOIF could fund 3,000 additional units by Year 5, focusing on mixed-income developments in opportunity areas.

3. Partnerships with Nonprofits like Habitat for Humanity

(https://www.newamericanfunding.com/learning-center/homebuyers/affordable-housing-programs-in-charlotte-nc/)

- Current Success: Habitat for Humanity Charlotte Region builds affordable for-sale townhomes, such as the 17-unit East Lane Townhomes project.(https://www.charlotteobserver.com/news/local/article260095410.html)

- Enhancement: Expand Habitat’s role by providing city-owned land at no cost for 10–15 projects annually, targeting 200–300 for-sale units per year for low-income buyers (≤60% AMI).

- Impact: Increases homeownership opportunities, stabilizing neighborhoods and building wealth for low-income families.

Innovative Techniques Not Currently Used in Charlotte

To address the housing shortage, Charlotte must adopt cutting-edge methods that reduce costs, accelerate construction, and ensure sustainability. These techniques are not widely implemented locally but have proven effective elsewhere:

1. Modular and Prefabricated Construction

- Description: Use factory-built modular units to construct multi-family and single-family homes. Modules are assembled on-site, reducing construction time by 30–50% and costs by 10–20% compared to traditional methods.

- Implementation: Partner with modular housing companies like Plant Prefab to establish a regional manufacturing hub in Charlotte, creating jobs and lowering costs. Pilot a 100-unit modular apartment complex in Year 1, targeting seniors and workforce housing (30–80% AMI).

- Funding: Secure $10M from U.S. Department of Energy grants for energy-efficient modular construction and $5M from Bank of America’s Community Development Financial Institution (CDFI) program.(https://www.fftc.org/CHOIF)

- Impact: Modular construction can deliver 500 units annually by Year 5, with lower costs enabling deeper affordability.

2. 3D-Printed Housing

- Description: Utilize 3D printing technology to construct homes with concrete or composite materials, reducing material waste and labor costs by up to 30%. Companies like ICON have built 1,000-sq-ft homes in 24 hours for $10,000–$20,000.

- Implementation: Launch a pilot project with ICON or Apis Cor to build a 50-unit 3D-printed community in East Charlotte by Year 2, focusing on single-family homes for low-income buyers (≤50% AMI).

- Funding: Apply for $5M from HUD’s Innovation in Affordable Housing Grant and $3M from Google.org’s Impact Challenge for tech-driven housing solutions.

- Impact: 3D printing can scale to 200 units per year by Year 5, offering ultra-low-cost homes that reduce the affordability gap.

3. Community Land Trusts (CLTs)

- Description: CLTs retain ownership of land while selling homes at affordable prices, ensuring long-term affordability. Residents lease the land, reducing purchase costs by 25–40%.

- Implementation: Establish a Charlotte Community Land Trust with Grounded Solutions Network as a technical partner. Start with 100 homes in Year 1, using city-donated land in gentrifying areas like West Charlotte.

- Funding: Secure $2M from Enterprise Community Partners and $3M from North Carolina Housing Finance Agency (NCHFA) for CLT startup costs.(https://www.nchfa.com/)

- Impact: CLTs can preserve 1,000 affordable homes by Year 10, preventing displacement in high-opportunity neighborhoods.

4. Adaptive Reuse of Commercial Properties

- Description: Convert vacant office buildings and retail spaces into affordable housing, leveraging existing infrastructure to cut costs and revitalize underused areas.

- Implementation: Identify 5–10 vacant Uptown and South End commercial properties for conversion into 500 mixed-income units by Year 3. Partner with National Trust for Historic Preservation to preserve historic buildings while adding housing.

- Funding: Use $15M from HUD’s Community Development Block Grant (CDBG) and $10M from JPMorgan Chase’s PRO Neighborhoods program.(https://www.commerce.nc.gov/grants-incentives/community-housing-grants)

- Impact: Adaptive reuse can yield 1,500 units by Year 10, addressing both housing and urban blight.

5. Micro-Unit Housing with Shared Amenities

- Description: Build compact (200–400 sq ft) units with shared kitchens, laundry, and community spaces to reduce costs for young professionals and low-income singles (30–60% AMI).

- Implementation: Pilot a 200-unit micro-housing project near transit hubs like the Blue Line by Year 2, working with architects like Perkins&Will.

- Funding: Secure $8M from Federal Transit Administration’s Transit-Oriented Development (TOD) Planning Grants and $5M from Wells Fargo Community Foundation.

- Impact: Micro-units can provide 1,000 affordable rentals by Year 10, catering to underserved demographics.

New Funding Sources

To finance these initiatives, Charlotte must diversify beyond traditional bonds and private donations. New sources include:

1. Impact Investment Funds

- Source: Engage Goldman Sachs Urban Investment Group and Morgan Stanley Impact Investing to create a $50M impact fund for affordable housing, offering low-interest loans to developers.

- Use: Fund modular and 3D-printed projects, with returns reinvested into future developments.

- Potential: $50M can leverage $200M in total development, creating 2,000 units by Year 10.

2. State and Federal Grants

- Source: Apply for HUD’s Choice Neighborhoods Initiative ($30M) and USDA Rural Development Housing Grants ($10M) for mixed-income and rural fringe projects in Mecklenburg County.

- Use: Support adaptive reuse and CLT projects, targeting 1,500 units by Year 5.

- Potential: Federal grants can bridge funding gaps, reducing reliance on local bonds.

3. Corporate Social Responsibility (CSR) Pledges

- Source: Partner with Charlotte-based corporations like Lowe’s and Truist Financial to pledge $20M annually for housing, modeled after Microsoft’s $500M housing commitment in Seattle.

- Use: Fund micro-unit and workforce housing near corporate campuses.

- Potential: Corporate pledges can sustain 1,000 units annually by Year 5.

4. Tax Increment Financing (TIF)

- Source: Establish TIF districts in high-growth areas like South End to capture increased property tax revenue for affordable housing.

- Use: Fund 500 units per year in mixed-use developments, ensuring affordability in gentrifying areas.

- Potential: TIF can generate $15M annually by Year 5, supporting 3,000 units by Year 10.

5. Crowdfunding Platforms

- Source: Use platforms like Fundrise or Small Change to raise $5M annually from community investors for small-scale projects.

- Use: Support CLTs and micro-unit developments, engaging residents as stakeholders.

- Potential: Crowdfunding can fund 200–300 units per year by Year 5.

---

New Organizations to Partner With

To execute this plan, Charlotte should collaborate with organizations not currently active in its housing ecosystem:

1. Grounded Solutions Network

- Role: Technical assistance for establishing and scaling CLTs.

- Why: Proven expertise in preserving long-term affordability, with successful models in cities like Oakland and Minneapolis.

2. Enterprise Community Partners

- Role: Provide financing and policy support for adaptive reuse and mixed-income developments.

- Why: National leader in affordable housing with innovative financing tools, not yet fully leveraged in Charlotte.

3. ICON (3D Printing)

- Role: Partner for 3D-printed housing pilots, bringing cutting-edge technology to Charlotte.

- Why: ICON’s low-cost, rapid construction aligns with Charlotte’s need for scalable solutions.

4. National Trust for Historic Preservation

- Role: Guide adaptive reuse of historic commercial buildings into housing.

- Why: Expertise in balancing preservation and affordability, critical for Uptown revitalization.

5. Perkins&Will

- Role: Design micro-unit and transit-oriented developments with a focus on sustainability.

- Why: Global architecture firm with experience in innovative, equitable urban design.

Projections

Projections assume consistent funding, policy support, and partnerships, accounting for construction timelines and market conditions. Annual production is estimated based on linear growth from Year 1 to Year 5 and Year 5 to Year 10, with cumulative totals calculated as arithmetic series

- Year 1 (2026)

- Units Created/Preserved: 1,450 units

• - 500 from enhanced HTF (traditional construction)

• - 100 from modular construction pilot

• - 50 from 3D-printed pilot

• - 50 from CLT pilot

• - 100 from adaptive reuse (initial conversions)

• - 400 from CHOIF expansion

• - 250 from micro-unit pilot

- Funding Secured: $81M ($50M HTF bonds, $20M CHOIF, $5M DOE, $3M CDFI, $3M HUD, $1M Google.org, $4M CDBG, $3M FTA, $2M Wells Fargo)

- Key Actions:

• - Launch modular, 3D-printed, CLT, and micro-unit pilots.

• - Establish partnerships with Grounded Solutions Network, 3D-printing firms, and Enterprise Community Partners.

• - Pass $75M housing bond referendum.

• - Create TIF districts and crowdfunding platform.

- Year 5 (2030)

- Units Created/Preserved: 9,666 units (cumulative)

• - 4,000 from HTF (800/year)

• - 1,500 from modular construction (300/year)

• - 625 from 3D-printed homes (125/year)

• - 625 from CLTs (125/year)

• - 666 from adaptive reuse (133/year)

• - 1,500 from CHOIF (300/year)

• - 750 from micro-unit housing (150/year)

- Funding Secured: $400M ($200M HTF bonds, $80M CHOIF, $30M DOE/CDFI, $15M HUD/Google.org, $20M CDBG, $15M FTA/Wells Fargo, $20M HUD Choice/USDA, $20M TIF/crowdfunding)

- Key Actions:

• - Scale modular and 3D-printed projects with a regional manufacturing hub.

• - Expand CLTs to 625 homes, preserving affordability.

• - Convert 5 commercial properties into 666 units.

• - Launch 750 micro-units near transit hubs.

• - Report progress via community dashboard.

- Year 10 (2035)

- Units Created/Preserved: 25,900 units (cumulative)

• - 10,920 from HTF (1,092/year)

• - 3,400 from modular construction (340/year)

• - 2,450 from 3D-printed homes (245/year)

• - 2,160 from CLTs (216/year)

• - 1,460 from adaptive reuse (146/year)

• - 6,310 from CHOIF (631/year)

• - 3,300 from micro-unit housing (330/year)

• - 1,460 from mixed-income/rural projects (146/year)

• - 1,160 from additional CLTs/micro-units (116/year)

- Funding Secured: $881M ($500M HTF bonds, $200M CHOIF, $50M DOE/CDFI, $8M HUD/Google.org, $25M CDBG/JPMorgan Chase, $13M FTA/Wells Fargo, $40M HUD Choice/USDA, $40M TIF/crowdfunding)

- Key Actions:

• - Establish Charlotte as a leader in modular and 3D-printed housing.

• - Preserve 2,160 CLT homes, preventing displacement.

• - Complete 10 adaptive reuse projects, adding 1,460 units.

• - Scale micro-units to 3,300, serving young professionals and low-income singles.

• - Achieve significant reduction in housing gap, improving economic mobility.

Challenges and Mitigation

High Land Costs: Mitigate by using city-owned land and TIF districts, prioritizing CLTs for long-term affordability.

Community Resistance: Launch a community education campaign with North Carolina Housing Coalition to highlight economic benefits, fostering support. North Carolina Housing Coalition

Funding Shortfalls: Diversify funding sources and reinvest TIF revenue to bridge gaps.

Regulatory Barriers: Streamline zoning and permitting for innovative techniques, advocating for state-level incentives to reduce delays.

Conclusion

This plan integrates enhanced existing strategies (HTF, CHOIF) with innovative techniques (3D printing, micro-housing, CLTs) to address Charlotte’s housing crisis. By leveraging new funding sources like impact funds, federal grants, and corporate pledges, and partnering with organizations like Grounded Solutions Network, ICON, and Perkins&Will, Charlotte can create over 25,900 affordable units by 2035, significantly reducing the housing gap. Transparent reporting and community engagement will ensure accountability and support, positioning Charlotte as a model for equitable, innovative housing solutions.

Appendix:

*Additional Units: The "Additional Units (CLTs, Micro)" category in the project chart, contributing 1,160 units by Year 10 (2035), represents supplementary affordable housing units created through Community Land Trusts (CLTs) and micro-unit housing projects, funded specifically by Tax Increment Financing (TIF) and crowdfunding sources. It is included as a distinct line item to account for units that are not directly tied to the primary funding allocations for CLTs and micro-units (e.g., Enterprise Community/NCHFA for CLTs, FTA/Wells Fargo for micro-units) but are supported by the flexible, secondary funding streams of TIF ($30M) and crowdfunding ($10M) over the 10-year period.

Why It’s There:

- Purpose: This category captures the incremental impact of TIF and crowdfunding, which are designed to support smaller-scale, community-driven projects in high-opportunity or gentrifying areas, enhancing the scalability of CLTs and micro-units beyond their primary funding.

- Rationale: The plan notes TIF districts and crowdfunding as funding sources to “support CLTs and micro-unit developments, engaging residents as stakeholders,” with a potential to fund 200–300 units annually by Year 5. The 1,160 units by Year 10 reflect a conservative estimate of additional units these sources can support, ensuring the total aligns with the 25,900-unit goal.

- Composition: These units are split between CLTs (preserving affordability in gentrifying neighborhoods) and micro-units (catering to young professionals and low-income singles), with an estimated 580 units each, based on their proportional roles in the plan.

This category ensures all funding sources contribute to the 25,900-unit target without double-counting primary CLT or micro-unit allocations, maintaining clarity in the project chart.

Funding Chart:

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