These uncertain times push us all to consider just how we spend our days and to see our neighbors in a kinder light. Times are scary, and this post is the start of our story of how we are trying to help. I once watched a great TED Talk by Rev. Bill Stanfield of Metanoia. His premise was that a healthy society improves itself from within and less so through outside intervention. By that, the inference was that outside agencies created a dependency in their helicopter largesse, they disenfranchised vulnerable communities and ultimately lead to a repeating cycle of inequality and poverty. That talk had a significant influence on my thought process. The second influence was a series of local conferences on workforce housing convened over an extended period. Many concerned individuals earnestly declaring how difficult it all was, how intractable, how impossible, how it needed to be studied, examined, how we needed committees, conferences and all manner of ancillary activities. The earnestness was authentic, but real solution absent.
I came to these shores with a European view of the world, in that there is benefit from society working together to solve complex problems for the greater good of others. It’s a belief in society that I've espoused all my life. Early in my time here, a conversation I held with the Federal Housing Authority on Meeting Street stuck in my mind. We have few houses for our working people and it’s only set to get worse. So, what if the problem should become "our" problem not simply "someone else's?” Thus, our journey to find a solution began.
Here is the problem - next to no one is building houses suitable for our workforce near the places they work, at prices they can afford and in anything like the required numbers. It's not an impossible problem; rather it's merely a difficult one. It takes a lot of will, opportunity, and a team to make it happen. What if this could be achieved on the Charleston Peninsula, downtown where the jobs are, and affordable housing has the greatest need?
Let us start by defining "workforce" housing. The Department of Housing and Urban Development (HUD) defines it as any homes that can be afforded by those earning between 80 and 120% of Area Median Income (AMI). Put simply, In Charleston, that means good quality housing costing well below $200,000 each, fee simple and close to downtown.
Next we set some "Golden Rules":
- Less than $200K for a new three-bedroom family home, inclusive of land, entitlement, building, landscaping, holding costs
- Less than 2 miles from the center of downtown Charleston and a similar distance from the employment centers in North Charleston
- Land with potential transport links (the future Low Line)
- High land (think X Zone) free from tidal flooding
- Land with the infrastructure in place to keep build costs down
- Empty land, where homes can be built within a community and not to displace that community.
We have exactly this mix on the Peninsula and surrounding area, but you have to look for it. You have to be holistic in how a project is assembled, you have to be pragmatic, and you need the political or at least impartial will to support and execute. What we wanted was a model that others could emulate, predicating that the project must have a "for profit" basis. A good friend once told me that "finance goes where it’s needed and stays where its welcome" so make it profitable and others will repeat the exercise to create a snowballing effect.
Nothing is going to happen without first finding land, and after a lot of searching, we settled on Union Heights. It ticked all the “Golden Rules” and the neighborhood were willing to work with us to help restore the tight knit community to what it once was. Others are looking there now but at the time, it was mostly ignored. Our goal to acquire lots was purposeful, and we built our portfolio being careful only to buy empty land and never to displace anyone. It is relevant to note here the key role played by the administration in the City of North Charleston from the Mayor's Office through to their support staff. They had the power to make or break this project, but from the first day we approached them, they have freely offered help, guidance and support even when we stumbled, and they have remained steadfast in their supportive position.
Next we needed financing. Our own resources would only go so far so we looked at sources of financing to fill the gap. We hit the road. We prodded and poked in any way we could looking for help though in the end there was none or certainly none that other good institutions had not already tapped for their own projects.
After this we looked at build cost. In a city full of building activity and its effect on price-point, that was a very difficult hurdle. We looked at panelized systems, building a small demonstration on Line Street downtown to test this. We looked at modular systems, running a parallel test on Folly Beach. Both worked, but not at the price point we needed. Sometimes fate has a cruel hand and at other moments, its largess can be both timely and transformative. Enter a chance bank introduction to JJR Development, LLC and their ability to build speedily, at a price point that worked for us, and aligned in ethics having already constructed many workforce homes for the City of Charleston. A lone effort had become a joint one, it's good to have friends.
Designs were developed for small, low cost houses. These met the price point, but the market demand was for bigger family homes. Designs were redrafted, adding a story but still keeping the lowcountry style in mind and including front stoops, common in this neighborhood. Around and around the plans went, input form City of North Charleston, Zoning Variances, engineering reviews, design modifications. We eventually hit all our targets. A range of 2- and 3-bedroom homes, brand new, fee simple, X Zone, easy access to Charleston area employment centers, no gap financing and well within the HUD Criteria of 80% to 120% AMI.
Initial renderings for houses of 938 Sq. ft & 1040 Sq. ft:
Homes are only as good as the ability for working citizens to pay for them. We have met the affordability criteria, but can they attract a mortgage? National banks would always be a difficult proposition. Instead, we turned to local Banks. They understand both the need and the economy. Two banks have agreed to offer mortgages for this product to those who can meet a few simple criteria, those of sufficient family income and credit score.
Note: It takes a team to make a project happen. The Neighborhood, City of North Charleston, Developers, Contractor, Homeowner. This is no longer an academic, improbable exercise. Building land is secure, it is funded by local banks, build methods have been tested, homes have been designed, and we have the necessary Zoning variances. Construction of the first of 50 homes is now underway. More to follow in this space as the development builds out.