Welcome back to Property Lines, a column by Curbed senior reporter Patrick Sisson that spotlights real estate trends and hot housing markets across the country. Comments, tips, and suggestions on where Property Lines should head next are welcome at email@example.com.
The Sun Belt has been exploding with new arrivals for decades. But even amid the current urban renaissance, few places have as sunny an outlook right now as Charlotte, North Carolina, especially if you’re a developer. Coming off a particularly large growth spurt, the city has so many multi-million dollars developments in the works—more than 12,300 units were under construction at the start of the year, with about 13,500 more planned—that locals have complained about a forest of look-alike apartment buildings.
People are flocking to the Queen City. Charlotte’s post-recession growth rate is second only to Austin, and the city is the top destination for millennials, according to a recent report from Apartment List. The metro area population swelled from 1.6 to 2.2 million between 2000 and 2014, and it’s projected to hit the 3 million mark by 2030. Charlotte has grown from a solid second-tier metro to one of the rising cities of the Southeast.
“During the Great Recession, the sprawling developments in the exurbs ground to a halt,” says Brian Leary, president of Crescent Communities, a local firm that is developing the River District, a massive mixed-use project along the Catawba River, along with Lincoln Harris. “You then saw these places start coming back to life, and the core urban areas started gaining strength. People are craving connectivity to each other and experiences, and those places that can deliver the most experiences in an accessible way can command premiums and value over time.”
Based on the big bets developers like Leary are making, there’s still a lot more to gain. Crescent Communities’s River District is massive: The 1,400-acre project, situated on land that was just annexed into the city last month, will include 8 million square feet of office space, 500,000 square feet of retail, 4,000 residential units, and a hotel, all less than 15 minutes from the city’s central business district.
When Leary says it has the opportunity to “redefine what Charlotte expects from placemaking and residential development,” it’s hyperbole, but to scale. This is a parcel that will take decades, not years, to complete.
And it’s also just one of a number of big projects in the works that will reshape a city already in the midst of a development boom. Apartments can’t go up fast enough. Vacancy rates are at a historic low (3.5 percent), and monthly rent averages $1,027 citywide, a 6 percent bump from last year, according to data from Marcus & Millichap.
Charlotte Center City Partners, a nonprofit that focuses on the cultural and economic development of the city’s core, notes that private groups will invest nearly $3 billion in projects along Stonewall Street in the Uptown neighborhood. In Uptown’s First Ward, development firm Levine Properties recently restarted a series of projects in an area where they’ve been quietly buying property for decades. They aim to build a walkable residential and commercial district in a nine-square-block area newly tied to the city’s expanding light rail system.
People keep coming, which is why developers of all stripes are coming to Charlotte, says Levine Properties president Daniel Levine.
“We’re getting a broad cross-section of people choosing Charlotte because of location, weather, and lifestyle,” he says. “A more dynamic lifestyle is being requested and required. The cul-de-sac doesn’t work any longer.”
Charlotte has emerged as a regional powerhouse by virtue of smart planning, a great location, and strong business ties in industries such as finance. But as infill and new developments reshape real estate in this red-hot economy, can Charlotte grow in a way that benefits everyone?
“What kind of place do we want it to be?” says Leary. “It’s a lot different than we wanted 20 years ago. Back then, we would have asked a golf course architect to design 18 holes, and we would have used that to sell nearby lots. Now, we’re looking to build a place that’s more compact, that cultivates a village approach.”
According to Bruce Katz, a Centennial Scholar at the Brookings Institution focused on urban development and globalization, Charlotte has become a regional hub by playing up its role as a global financial center (it’s home to Bank of America) and focusing on advanced manufacturing and foreign investment. But the engines of growth that fueled the last decade may not work any more; without a dedicated innovation hub and startup scene, he wonders if the city can expand at the same pace.
“Can you be a world-leading metropolis without having advanced research at your core?” he says. “That’s the question that every major metro in the United States needs to ask itself. It’s a changing world. Whatever got you to this point isn’t going to move things forward.”
Katz believes that all metro areas are at a junction, not just Charlotte. Most American cities need to sharpen their competitive edge and upgrade their brand. Charlotte has done that, in many respects.
The city has expanded its transit options with the expansion of light rail and grown much more diverse (the foreign-born population jumped 110 percent between 2000 and 2014). But the city has strained when it comes to improving equity and addressing affordability; in a 2013 study led by economist Raj Chetty, Charlotte was 49th of the 50 largest cities in terms of social mobility.
“It’s now a destination city, not just a city in the Carolinas,” says Ken Szymanski, Executive Director of the Greater Charlotte Apartment Association. “Sixty-eight languages are spoken here, and now it’s got a creative draw that’s attracting millennials. It used to not compete with a Seattle or Boston, and now it does. That means a challenge for low- to middle-income renters.”
“I think there’s a lot of people in Charlotte who want to see our community grow and offer up opportunity,” says Levine. “There are certainly people throughout Charlotte who see their neighborhoods changing, some for the better and some for the worse. At the end of the day, people are rooting for the city to get bigger and better opportunities.”
Echoing Leary’s comments, Levine feels the city needs more connections. It’s clean, compact, walkable, and beautiful; why doesn’t downtown have more walkable pedestrian environments and ground-floor retail to help create a more accessible, and perhaps affordable, urban landscape?
“I don’t care what happens more than 24 feet above the ground,” he says. “That’ll sort itself out. I want to see the first few stories offer retail diversity and really connect.”
Leary calls Charlotte’s current path a “cooler boom,” less focused on a rapidly expanding skyline and more in tune with granular, organic growth in neighborhoods and villages. To help settle the thousands on new arrivals, new developments need to create a more urban experience.
“I think what’s happening is breathtaking in its scope and velocity,” says Levine. “It’s a lot of impact in a short amount of time. The good news is that the consistent population and employment growth can have a dramatic impact on the built environment. You’re either enjoying it if you’re in the development community, or lamenting if you’re getting gentrified out of a neighborhood you enjoy.”