Ask the expert: How do we solve Charlotte’s inventory problem?

Ask the expert: How do we solve Charlotte’s inventory problem?

Photo: Andy Weber/Axios

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In 2021, inventory remained critically low in Charlotte. So I asked Canopy Realtor Association president David Kennedy if there’s a way to navigate it in 2022.

There aren’t any quick, easy answers. But Kennedy shared some multi-faceted, long-terms possibilities for increasing local housing supply.

Situational awareness: Making homeownership a possibility for more people in Charlotte isn’t just about increasing the supply.

  • It’s also about paying people a fair, livable wage so they can afford to buy a home here.
  • These suggestions are exploration of possible solutions to just one side of the coin.

Here are Kennedy’s thoughts on how to create more supply in Charlotte.

 1. Curb iBuyers and investors.

Kennedy says we need some “bumpers and regulations” in place on iBuyers and investors gobbling up real estate until supply can catch up with demand in Charlotte. Buyers are losing out to all-cash investors and iBuyers who turn these homes into rentals or sell them to other corporations.

  • Investors and iBuyers, Kennedy explained, treat housing like stocks and bonds — a means to make money. And while housing can be a part of building wealth, homes are a necessity, not just a commodity.
  • “Everybody has to win because everybody needs a house,” Kennedy said. “When you bring that kind of investing to housing, more people lose.”

Of note: Outside investors made up 14% of all home buyers in Charlotte from January to April 2021. They created the second largest net negative impact on housing inventory in the country, according to data shared with Axios in an earlier story.

  • Since 2018 in Mecklenburg County, more than a quarter of the homes sold on iBuyer platforms Opendoor and Offerpad have gone to corporations rather than individuals, according to an Axios analysis of county data published in August.

2. Innovate on home building materials and design.

Solving the housing inventory shortage in Charlotte isn’t just about ramping up building, Kennedy told Axios. It’s also about innovating with home-building materials so we can build quicker, and help make it more affordable.

  • The price of oriented strand board, one of the most-used materials in new construction, has increased 500% since 2020, Kennedy said.

Examples: Out-of-the-box solutions could look like 3D-printed housing — a technology being explored in Texas as one way to build more supply affordably.

  • Or modular construction, where multi-family projects, like condos or apartments, are made in chunks in factories. It can make home-building 50% faster and 20% cheaper, according to a recent New York Times article.

3. Allow for denser housing.

Charlotte’s working to address this problem now with the 2040 Comprehensive Plan and the Unified Development Ordinance, a document that acts as a guide post for Charlotte’s growth. If zoning and permitting allowed more multi-family projects in Charlotte, like duplexes and quadraplexes, then supply could increase.

  • Kennedy sees these multi-family homes as a place to start. It would create the opportunity for people to get into something and start building equity.
  • “Denser smaller housing is the future,” Kennedy said. “I don’t think people need 5,000 square feet. I think they can make do with 1,500.”

Of note: Denser housing doesn’t necessarily equal more affordable housing, but it will help create more stock.

  • And if supply can catch up to demand, prices will stabilize.

4. Build mixed-income communities.

“Whenever there’s development, there’s usually displacement,” Kennedy said, adding that oftentimes people get priced out of their communities, then can’t afford to buy in new areas, either.

If a developer wants to redevelop a neighborhood of single-family homes in Charlotte, Kennedy says creating a mix of housing styles could held prevent displacement while bringing more inventory to market.

How it could work: Instead of paying people off for their properties, Kennedy says developers could reserve housing of a similar size in the project for the community members who already lived on the land.

  • These housing developments could have a mix of condos, townhouses and single-family homes, each with a different starting price point.
  • By reserving units for those who would otherwise be displaced, it gives them something to pass down or sell one day.

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