Apartment Complexity 

Mecklenburg County is in a housing catch-22. On the one hand, the area suffers a shortage of low-income homes. On the other hand, aging apartment complexes along some of Charlotte's most populated corridors have high vacancy rates. One local advocate for the homeless hopes to turn this paradox into an opportunity to relieve the county's dearth of affordable homes.

Hoping to use a mix of public and private dollars, Chris Wolf, director of A Way Home, recently tried to buy Sandhurst Apartments, an aging complex on West Boulevard. The deal fell through because he couldn't get enough money in time. But Wolf hasn't given up. He still wants the city of Charlotte, religious groups, corporations and social service agencies to pool money for the purchase of apartment complexes that have seen better days. He hopes these complexes can be turned into apartments nice enough that he wouldn't mind his mom living in one.

"Affordable housing shouldn't be crap," said Wolf. "It should be something that somebody's happy to live in."

By many estimates, affordable housing is in short supply. In 2004, the city needed nearly 8,000 units, according to a city-county housing report released last year. By 2010, that number is expected to grow to more than 12,000 units; of those, about 63 percent will require rents of less than $200 a month to be affordable.

"I think the American Dream is, if I'm willing to work hard, I can have a decent life," said Wolf, who was an investment banker before becoming a housing advocate. "That dream, that promise, has gone away for a lot of folks."

Wolf's goal of turning vacant apartments into affordable housing is possible because of trends in rental pricing. Recent years' lower interest rates have allowed many renters to buy homes, leaving apartment landlords scrambling to attract renters and using offers of special deals. Renters end up getting nicer apartments than what they would have previously. "The same apartment in 2004 was cheaper than it was in 2001," said Ken Szymanski, executive director of the Charlotte Apartment Association. "It was a bonanza for consumers."

But if landlords lower prices too much, they can't cover their operating costs, and they may be better off leaving the units empty or returning a complex to a lender, said Darren Ash, managing partner of Apartment Realty Advisors, a Denver-based company with offices in Charlotte. "The owners are faced with fixed-rate mortgages and operating expenses that indicate that they have to get $500 minimum rent; otherwise, they can't rent that unit," Ash said.

This explains why the area has, by Szymanski's estimation, about 8,000 vacant apartments. He and others, including Ash, believe the market will correct itself as interest rates increase. Which means now is the time for affordable housing advocates to act. "It's the only time where -- we've called it the perfect storm -- where the value of this particular class of assets is as low as it can possibly go," said Ash. "That's why if we can't take advantage of it as a community [now] ... we probably never can do it."

If these complexes were renovated, people could move in and pay an affordable price. They could receive social services. United Family Services, for instance, could help renters with credit counseling. The YMCA could do programs for kids. Legal Aid could help people with immigration problems. People who need job skills could learn apartment maintenance or landscape management by working on site. Residents would have a say in how the complex is handled, which Wolf said would help them feel invested in their community.

"What you do is create a neighborhood that people want to live in, instead of being a dump," Wolf said. "It's not palatial -- they're small apartments -- but you make them decent, you make them safe.

"You can make it work," Wolf added. "For the community, it takes a blighted property and it makes it viable, makes it healthy."

Ash, who has talked with Wolf about the project, said it costs about $100,000 each to build new units in an apartment complex, but that Charlotte has about 5,000 apartments that can be bought for less than $20,000 per unit and renovated for about $10,000.

Wolf estimates it would cost about $50 million to provide decent, affordable housing for 1,000 families using this method. And while that sum may seem overwhelming, Wolf believes it's achievable if the corporate and religious communities pool their resources. For business, creating affordable housing helps reduce social problems that sap worker productivity; for people of faith, creating housing fulfills altruistic goals.

Sandhurst, the apartment complex Wolf approached, has seen better days. But the surrounding area has experienced a lot of new development, including retail shops and a YMCA on West Boulevard that is set to open in 2007. Wolf said the 163-unit Sandhurst complex had vacancy rates approaching 60 percent. A Way Home, he said, needed $5 million for the project -- renovations and all -- but couldn't get the money in time.

Sandhurst's' owners, Finley Properties of Jacksonville Beach, FL, could not be reached for comment. But Rra Mack, the complex's property manager, said rents range from $424, for a one-bedroom garden apartment, to $599, for a three-bedroom town home. She wouldn't disclose the vacancy rate, but said many apartments in the area are in need of revitalization.

Wolf said others have tried the apartment conversion concept on a much smaller scale, but an entire complex such as Sandhurst, geared toward low-income people, would be the largest single project of its kind. Elsewhere, projects like Rocky Mountain Mutual Housing Association in Denver, CO, use a similar strategy to house people affordably.

The Rev. Bill Jeffries of Providence United Methodist Church has worked with A Way Home on getting church support. He had worried about concentrating lower-income people in a housing project but said the social service agencies' involvement would make a difference.

"The big question is, can we marshal enough interest within appropriate groups to 1) raise the money, and 2) pull all the pieces together," Jeffries said.

To get the job done, the city's housing trust fund would need replenishing. Voters in 2002 and 2004 approved the fund as part of bond referendums, and Wolf hopes to get a similar item on Mecklenburg ballots soon. "If I talk about homelessness or poverty, people roll their eyes, or they're concerned, but they have no ideas how to get their hands around it ... ," said Wolf. "But if we take it one piece at a time, we can make a difference."

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