Renters struggle to afford costly Charlotte housing market

Vivian Sipe is a proud Charlotte native. She grew up here, and as soon as she graduated from college, she came right back.

But she doesn’t live in the city anymore. Even with a roommate, she couldn’t afford it.

Sipe, 30, decided to move to a new development in Concord last year. Her current unit, which she’s able to afford with just one roommate, is better for her budget. Still, when she renewed her lease this year, she learned that her rent would increase.

Sipe ended up quitting her job — a job she liked — to start a higher-paying position that would help her manage the rent increase.

“I was kind of in a panic of having to pay extra money each month when I didn’t have extra money to spend,” Sipe said.

Renters make up a little less than half of all households in the Charlotte area. But as the market grows hotter, and homeownership slips out of the hands of many, renting in the Charlotte area is becoming more difficult than ever. People who have lived in the city for years are finding their money doesn’t go as far as it used to.

In the Charlotte market, the current asking rent across all unit types is about $1,544 per month, according to data from real estate research firm CoStar. The data reflects the current market rate being offered to new tenants in multifamily buildings with five or more units. It’s a 15.8% increase from this time last year. Nationwide, asking rent is up by about 10.6% since this time last year, according to CoStar data.

‘Really shady’

Aoife Kavanagh and Jess Hudson have been renters in the Wesley Heights area since 2020. They were hoping to buy a house this year, but knew they would have difficulty finding something they could afford, so they decided to renew their lease.

Despite multiple attempts to reach their leasing office, they didn’t receive their lease renewal until two days before their current lease ended — at which point they were informed their monthly rent would increase by about $200. If they chose to rent on a month-to-month basis, they would have had to pay another $300 on top of that, which would have put their rent at nearly $2,400 for a small one-bedroom apartment.

Kavanagh and Hudson felt they had no choice but to accept the increase; their lease states that they have to give 60 days notice before vacating the unit.

“We can afford it,” Hudson said. “But the ethics part of it, I mean, that’s really shady.”

North Carolina is generally considered a landlord-friendly state. The state has a ban on rent control, so there’s no limit to how much private landlords can increase your rent when your lease ends.

There’s also no state law that requires a certain amount of notice be given before your rent is raised, O’Shauna M. Hunter, a Charlotte-based attorney for Legal Aid of North Carolina said. Still, you should check your lease agreement, because it may say otherwise.

A growing problem

Charlotte has especially struggled to provide enough affordable housing to low-income residents. The $219 million it has invested in affordable housing projects over the past two decades has hardly lessened the need. Now, even those who once could afford to live here are being priced out.

Rent is generally considered “affordable” as long as it doesn’t exceed 30% of your gross monthly income. Applying that rule, someone living in the Charlotte market would have to earn an annual salary of $61,760 in order to reasonably afford a monthly rent of $1,544.

According to the latest county data, nearly half of renters in Mecklenburg County are cost-burdened, meaning their monthly housing costs exceed that 30% threshold.

That was in 2019, before the pandemic, and the problem is only getting worse.

“From the leases that we’re seeing, from the renewal letters that we’re seeing, from the complaints that we’re seeing that showed the rate of rent, I would say that the problem is only increasing for our community,” Hunter said.

It all comes back to the crux of Charlotte’s housing crisis: limited housing supply. There aren’t really enough units to accommodate the existing population, let alone a population that’s increasing rapidly. And as long as the demand for housing exceeds the supply, it will remain prohibitively expensive for many.

“Data shows that every day there are about 100 people moving into this area. So obviously, that creates a huge amount of demand for housing,” Yongqiang Chu, director of the Childress Klein Center for Real Estate at UNC Charlotte, said.

Charlotte doesn’t simply need more housing — it needs a lot more of it, and fast. Unfortunately, that’s proving to be a lot easier said than done. The 2040 Comprehensive Plan includes a provision that would allow for higher-density housing citywide, but it fiercely divided council members and passed with only slim margins. And new developments that would help increase housing supply have received strong pushback from residents who complain it threatens their neighborhood’s identity. Of course, Charlotte isn’t going to build its way out of its housing problem, but it’s certainly a good way to start.

“The only solution to this kind of problem is to increase supply,” Chu said. “So, to allow builders to build or to allow developers to develop more rental housing.”

This story was originally published May 22, 2022 6:00 AM.

Paige Masten is an opinion writer for the Charlotte Observer and McClatchy’s North Carolina opinion team, covering issues that impact the city and state. She grew up in Raleigh and graduated from UNC-Chapel Hill in 2021.