Soon after coronavirus arrived in Charlotte, Greg Jackson started to hear from families who needed help. Some had been laid off. Others were sleeping in cars. A few were about to be evicted.
Housing, Jackson realized, was the common dire concern for these families. Without a place to sleep at night, it’s hard to find a job. It’s near impossible to educate your kids online, too.
So through his organization Heal Charlotte, Jackson set up a Covid-19 assistance program to coordinate temporary housing at a local hotel near University City. Since April, Heal Charlotte has rented 20 rooms there.
Steady demand for low-cost temporary housing has proved to Jackson that now is the time to move on to another idea he’s had for a while: Buy a hotel as a way to help solve Charlotte’s affordable housing crisis.
This week, Heal Charlotte announced plans to do just that, through a new capital campaign to raise $10 million. The plan is to purchase a 130-plus room hotel in northeast Charlotte, near the Baymont Inn that Heal Charlotte’s been renting out, and turn it into a transitional housing facility. Heal Charlotte is looking at a number of hotels in that area.
One of the hotels on the 5500 block of Reagan Drive is where a two-year old died last week after accidentally shooting himself with his father’s unlocked gun. “This is the type of stuff that led us to really do something,” Jackson says.
Heal Charlotte will not only refurbish the hotel, but also develop an entire community campus on its 2.5-acre property.
Onsite is a 4,000-square-foot management office that Jackson would like to turn into a Community Matters cafe-like space with room for educational programs, like financial literacy courses, and a hub for other local nonprofits to offer services.
The campus will be a home base of sorts for other like-minded organizations working to support the community around Reagan Drive, near I-85. Last year, Jackson brought together educators, CMPD officers, and community members to begin working on something called the Reagan Drive Initiative. It’s an effort to improve the community from the inside out.
Additionally, the campus will have a playground and soccer fields. Heal Charlotte plans to have a Black Lives Matter mural on the hotel’s facade, too.
“(The pandemic) has opened our eyes up to a lot of families who are either going into homelessness or who are already homeless. Some have two jobs, some have two parents,” Jackson says.
“They can afford to work here but they just can’t afford to live here.”
We all know that Charlotte’s breakneck growth has benefitted some communities — new skyscrapers, luxury apartment complexes, corporate expansions and relocations, breweries everywhere. It’s also left many communities behind.
Given the population growth and demand, Charlotte has a shortage of about 34,000 affordable housing units, the city has reported. On top of that, nearly half of renters in the region are cost-burdened. That means they pay more than 30 percent of their incomes on housing.
A household is severely cost burdened if they spend more than 50 percent of their incomes on housing. And there are plenty of those households in Charlotte — more than 38,000, according to one report.
That means that it only takes one thing — a car breakdown, a job loss — to strain their finances.
“We want to help families that are going through a transition. The families that are staying somewhere for 16-24 months and need a stepping stone to get into permanent housing. We all know the affordable housing crisis is real in Charlotte,” Jackson says.
[Related Agenda story: 1,000 people lined up for 129 new affordable housing units on Freedom Drive on Monday]
Roughly $5.5 million of what Heal Charlotte is raising will be for the acquisition and renovations of the hotel. The organization hopes to close on the deal by the end of the year, then start construction in early 2021, says Dr. Shanté Williams, the organization’s board chair.
The remaining funds will go into a few buckets: salaries for people who work at the campus, such as case managers and café employees, as well as rental subsidies.
Everyone who lives there will pay no more than $500 a month for rent, which is significantly below market rate for Charlotte. Average rent for a two-bedroom apartment in Charlotte is more than $1,100.
“That’s specifically designed to give them the opportunity to make a savings, create a plan to get from the transitional living space to an apartment, and finally into housing,” Williams says.
“We’re creating a pipeline of people who are financially sound.”
Heal Charlotte plans to present the plan for the hotel project to city council within a few weeks. The goal, Jackson says, would be to tap into the city’s Housing Trust Fund. Created in 2001, the HTF is the affordable housing fund to which Charlotte has committed about $136 million.
As for individuals and investors, anyone who contributes to the Heal Charlotte campus will have an equity stake in it.
That could be as low as $1, or as high as $250,000, the minimum amount for a traditional equity investor. For that highest investment level, investors can expect a 12.5 percent market rate return on their investment over 10 years, according to Williams.
“I am in the private sector and I can tell you there are very few real estate projects that are offering that kind of return,” says Williams, a venture capitalist and CEO of Black Pearl Global Investments.