CHARLOTTE, N.C. (Sept. 12, 2022) — The Charlotte City Council on Monday approved allocating $8 million in federal coronavirus relief funding to preserve affordable housing in east Charlotte, and to create rental subsidies for people earning very low incomes.
Peppertree Apartment Homes, at the corner of Central Avenue and Kilborne Drive, is considered naturally occurring affordable housing, or NOAH: housing with relatively low rents because of age, geography or other circumstances, but that may not stay affordable without government subsidies to keep rents down. Development firm Ascent Real Estate Capital is seeking to acquire and renovate the complex as part of its
NOAH preservation efforts.
Ascent estimates the cost to develop and preserve Peppertree Apartments will be $55.9 million. The firm requested $8 million from the city to help acquire and renovate the 292-unit complex, which was built in 1985, and has committed to keeping the units affordable for 20 years through a deed restriction.
Currently, Peppertree Apartment rents are between $1,150 and $1,400 per month for a one-bedroom, and between $1,400 and $1,750 for a two-bedroom — below the average asking rate in Charlotte, but fast approaching the average. Ascent is aiming to significantly reduce rents for income-eligible tenants, with plans for:
88 units with rents between $390 and $465 per month to serve families that annually earn at or below 30% of Charlotte area's median income (AMI), which is $28,250 or less for a family of four.
146 units with rents between $845 and $1,152 per month for families that annually earn between 31% and 60% AMI – for a family of four, that's between $29,202 and $56,520 per year.
58 units with rents between $845 and $1,295 per month for families that annually earn between 61% and 80% AMI – for a family of four that's between $57,462 and $75,350 per year.
Funding from the city is provided by the American Rescue Plan Act of 2021 and can be used for eligible housing costs.
Rental Subsidies for Families with Very Low Incomes
Of the 88 units for families earning 30% AMI, Ascent will set aside and further reduce the rents of 44 units by providing additional subsidies for residents who do not have Section 8 vouchers or other forms of rental assistance.
For the 20 years of the deed restriction, the city will use an amount equal to the property's annual city tax bill to provide the additional
rental subsidies for families earning very low incomes. Local nonprofit
Housing Collaborative will identify eligible tenants and administer the rental subsidies. New residents who receive rental subsidies will be housed as units become available through natural turnover to avoid displacement.
Access to Necessities
Local NOAH preservation efforts are prioritizing main transportation corridors like Central Avenue.
Peppertree Apartment residents have access to employment centers such as Uptown and are within walking distance of pharmacies, grocery stores, shopping centers, bank branches, and transit options —
key criteria for the city when supporting NOAH developments.
Additionally, Ascent, with support from the Housing Impact Fund, a $58 million fund established in 2020 by Charlotte businesses for NOAH preservation, and Atrium Health will bring in a community health navigator to assess residents' health needs and make referrals, and to organize educational opportunities about health and wellness, workforce development, financial literacy and more.
"Ultimately what we're trying to do is build healthy households," said Shawn Heath, director of the Housing & Neighborhood Services Department, when he recommended the NOAH investment to City Council members on Aug. 22. "It's not just the housing alone or in isolation that's going to do it, but how do we get [residents] connected to the other things that are really going to help them thrive."
Financing the Renovations
Developers with Ascent are also seeking $13.5 million from the Housing Impact Fund, $8 million in private financing available through
the Charlotte Housing Opportunity Investment Fund, and $4 million from Mecklenburg County.
Mecklenburg County commissioners will consider the $4 million funding request on Sept. 20. If approved, Peppertree Apartments would be the first NOAH collaboration for the city and the county.