Apartment construction slows down as rent in Charlotte neighborhoods expected to rise

CHARLOTTE , N.C. — Apartment experts and developers met on Wednesday to discuss the industry's forecast for 2018. Experts said that from 2010 to 2018, 36,723 apartment units hade been built in Charlotte, and that 30 percent were constructed near the heart of the city.

Jay Parsons, vice president of data analytics at Real Page, Inc., said construction peaked at end of 2017 and the start of 2018.

He believes apartment construction will start to slow down.

"We are seeing the last big wave of construction coming in,” Parsons said.

For years, developers have focused on building luxury units for millennials and people who make between $50,000 to $75,000 a year.

South End had some of the most construction, with several apartments being built along the light rail.

Parsons said that while renters in South End and Uptown pay the most per month in the Charlotte region, their bills are the least likely to jump in 2018.

The average monthly rent for South End and uptown is $1,485 with a projected increase of only 0.3 percent.

Parsons said the competition is driving complexes to offer free rent for one, two or three months in exchange for a rental contract.

However, for neighborhoods in Matthews, southeast Charlotte and east Charlotte that have little construction, Parsons expects rent will increase nearly 4 percent. For Matthews and southeast Charlotte, the average monthly rent is $1,113 with a projected increase of 4 percent. For east Charlotte, the average monthly rent is $908, with an expected increase of 3.9 percent.

Industry experts said they have been talking with developers about their role in affordable housing. They said it’s a problem, not just in Charlotte, but across the country.

Many developers said they would need tax incentives and large-scale programs to get a return on their investments.

Charlotte developer Wyatt Dixon, of Proffitt Dixon Partners, who has several buildings in Charlotte, including the Presley Uptown Apartments, said many projects are being put on hold.

"The cost to construct is just (has) just (been) escalating so rapidly over the past two decades,” Dixon said.

While developers figure out how they fit into the solution, Charlotte officials are working to meet council's goal of building 5,000 affordable units in three years.

To date, the city has committed to 3,315 units, which is 66 percent of its goal.

Last year, the city put out a request for developers to submit quotes.

The city is currently reviewing four submissions from developers interested in building affordable housing on city-owned land.

The city said it plans to meet the 5,000 goal by utilizing the HouseCharlotte program, a down-payment program for qualified buyers, and the Home Rehabilitation program, which helps make repairs to existing affordable housing units.

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