Affordable housing is an intractable problem, so it shouldn’t be surprising that it takes a village to make even a small impact. That’s evident in a $68 million project led by Charlotte’s Laurel Street group on east Charlotte land owned by the Aldersgate senior housing community.
Business North Carolina wrote about Aldersgate’s financial problems in our February edition. One part of the turnaround there involves leasing 10 acres for a mixed-income apartment community adjacent to continuing-care retirement community.
Springhouse Square will include 236 units, split between 200 that are designated for adults 55 and over, and 36 that aren’t age-restricted. The older-adult community will involve two buildings with fitness rooms, large patios and other amenities. The other 36 units will be in eight separate buildings. It’s in a middle-income neighborhood of Charlotte that is gentrifying as housing closer to the center city becomes more expensive.
Of those 236 units, 100 will be reserved for people with household income that is between 30% and 80% of the area median income. The AMI in Charlotte for a single person is about $70,000, $80,000 for two people and $100,000 for a four-person household, so folks with incomes of as much as $56,000 to $80,000 will qualify. (Or as low as $21,000 to $30,000.)
Some potential tenants also may qualify for federal housing vouchers, “so about anyone who wants to live there, can live there,” says Lee Cochran, a Laurel Street vice president with more than 20 years of experience in affordable and mixed-income housing.
There’s a huge shortage of such housing nationally because too few units have been built to meet increasing demand from low- and middle-income folks. Into that vacuum comes these bankers and investors involved in this specific project:
- The city of Charlotte, which is providing $2.9 million through its Housing Trust Fund.
- TD Bank, which is the construction lender and the investor in federal tax credits that were awarded to Laurel Street for the project. The Toronto-based bank is expanding in Charlotte.
- Local Initiatives Support Corp., or LISC, manages the Charlotte Housing Opportunity Investment Fund and Black Economic Development Fund, both investors in the project.
- N.C. Housing Finance Agency, which issued low-income housing tax credits and tax-exempt bonds.
- Bank of America Community Development Corp., equity investor.
- Prudential, equity investor.
- Crescent Communities, equity investor.
“There are multiple layers of funding, which is needed to serve the different income levels that will be part of this development,” Cochran says. He notes that for every $1 of public and philanthropic support for the project, Laurel Street raised $7 of private equity and debt.
Beyond their desire to do good, these investors know demand is so strong that they can count on getting paid back both interest and principal, Cochran says.
Projects like Springhouse Square are occurring all over North Carolina, but not quickly enough to meet demand, industry officials say.
Springhouse Square’s contractor is Harkins Builders, while Shook Kelley is the architect.
Founded by Dionne Nelson in 2011, Laurel Street has completed or is developing about 5,500 units, mostly in North Carolina and Georgia. About 2,000 units are in the Charlotte metro area.
Aldersgate has no other involvement in the project other than holding the multi-decade ground lease, Cochran says.
