You may have heard.
There’s a bit of an apartment boom here in Charlotte.
You can’t stand in the check-out line Harris Teeter without overhearing someone moaning about how their previously “undiscovered” neighborhood has been taken over by new apartment buildings. People here have a lot of opinions on everything from the design of Charlotte’s newest complexes to landowners’ responsibilities toward retaining a neighborhood’s character.
“I mean, really. I heard that empty lot is going to become more APARTMENTS! Don’t we have enough apartments by now…yeesh!” people say.
Well, folks. It’s time to stop bitching about all the apartments.
The Numbers Conundrum
If you had to guess, how many apartment units would you say were built in the Charlotte metro area in 2016? 10,000? 50,000? You can probably name five huge, under-construction apartment complexes just off the top of your head! In 2016, Charlotte developers built 6,529 apartment units.
That’s a lot, but it’s not enough.
American developers need to build over 4,600,000 new apartment units between now and 2030 just to keep up with rental demand. The hottest apartment markets in the country? One of them is North Carolina. Over 100 people move to Charlotte every single day…in 2015 nearly 35,000 new people moved to Charlotte alone. Looking at it that way, it’s easier to see why we still don’t have enough apartment units to accommodate them all.
Sky-High Rental Rates
It’s no secret that as recently as 2008, Charlotte real estate was a steal. Today, not so much. Home prices are soaring across the area (and across the country) which means more people are renting than ever. Low housing inventory combined with high numbers of people moving into urban SunBelt cities means one thing: apartments in Charlotte are getting more expensive.
The average rental rate for an apartment in CLT topped $1,000 back in February. Thankfully, blessedly, that number is cooling…slightly. What’s causing the cool? The some 26,000+ new apartment units currently planned or under construction across the city. Experts say rents can’t keep climbing the way they have been and will eventually hit a topping-out point; developers say land is getting pricier and construction slower, too. All that means that developers will have to resort to new strategies to get units rented…not everyone in Charlotte can – or wants to – afford a $1,640 a month one-bedroom in a hip, walkable neighborhood.
A Shift in the System
What’s to come? Well, despite the cool down, developers are optimistic about continued demand for apartments in and around Charlotte. Some say they’ll shift to less high-end, lower-priced units. There are even murmurs in some circles that if the market tips, certain apartment projects could be turned into condos. Forward-thinking philanthropies are even getting into the game, buying up old apartment buildings to use for low-income housing, a step in the right direction for Charlotte’s upward mobility. Even the city is doing its part by subsidizing some 34,000 affordable housing units all over town.
The moral of the story is: There still aren’t enough apartments.
Not even close.
So, whatever you think about hardiplank and parking garages and all the things you love to hate on, remember that new apartments are a measure of a city on the move.
All of that said, there will be a slow down at some point> I already here rumblings of slower lease up and absorption rates. When the music stops and banks stop lending money, there will be a sudden stop in development. This could be so swift that some developers will be forced to abandon projects mid build (remember when the Vue was a laughingstock instead of a marquee Uptown address? This is Capitalism in its purist sense. Money runs to the market, and when it dries up, it does so sometimes violently.
In a world of car dependent Urban sprawl, high density residential with close proximity to mass transit is the only way to slow the crippling congestion problems of a city with meteoric population growth. This density also promotes eclectic and successful retail and restaurant culture.
You want Charlotte to stay prosperous? Take a sip of that craft beer, and thank your lucky stars for all the apartments.