Bridgeview Village has provided affordable apartments for low-income Charleston families for nearly 50 years in an out-of-the way location on the peninsula.
Tucked between several cemeteries, the Cooper River marsh and two former landfills, it's the largest privately owned affordable housing complex in the Charleston area, with 26 buildings and 300 apartments. Now, the California company that owns the complex has put it up for sale, raising fears about a potential loss of affordable housing that one city official said would be "unbelievably devastating."
Charleston is preparing to spend nearly $40 million developing affordable housing, but the fate of Bridgeview Village highlights a major challenge: As the city works to create new housing, existing affordable apartments are disappearing as rent restrictions tied to the use of federal tax credits expire.
It's a growing problem in the city, the state and the nation.
“We’re about to face an unbelievable crisis in this city. We really are," said William Dudley Gregorie, a Charleston councilman who was state administrator for the U.S. Department of Housing and Urban Development until 2007.
“The rents will go up, the affordability will be gone and people will be priced out," he said. "No one has come up with a solution."
Across South Carolina, rent restrictions will phase out on more than 1,050 apartments that taxpayers helped to create between the start of this year and mid-2022. Nationwide, restrictions on nearly half a million low-income housing units are scheduled to expire by 2030, according to the National Low Income Housing Coalition.
Three apartment complexes in Charleston are going through affordability phase-outs right now, transitioning to higher rents. Other private complexes that once served low-income tenants with federal assistance have been sold to investors who raised the rents.
The area's desirability means landlords can charge higher rents, and that's put economic pressure on the remaining affordable housing complexes.
The once-industrial northern Charleston peninsula along Morrison Drive has become the trendy NoMo neighborhood. More than $100 million of luxury apartment buildings are under construction near Bridgeview Village, and even the former landfills are slated for development.
Built as low-income housing near a trash dump, Bridgeview Village has become 13 acres of very valuable real estate.
Fears of change
Bridgeview resident Bryant Powell, 47, lives in poverty partly due to two recent strokes and pays just 30 percent of his income to rent an apartment thanks to federal subsidies. He said the appearance of a bike-share station in the apartment complex was perceived by fellow tenants as an ominous sign changes were coming.
"The word is they're going to tear this place down and relocate everyone," Powell said.
"They" would be Highridge Costa, the company that owns Bridgeview and renovated it using federal tax credits in 2006. The company has no plans to demolish Bridgeview or relocate anyone — a federal contracts would prevent that, for now — but the fate of the complex will likely be up to a future owner.
“We plan to sell the building, and we don’t know what will happen beyond that," said Thomas Erickson, a senior vice president at Highridge Costa. “We’re just selling it straight out.
“It’s a real estate asset, just like any other," he said. "It just happens to be in the affordable housing space."
Bridgeview Village has affordable rent requirements tied to the federal tax credits that helped pay for renovations. Those restrictions will expire, but the complex also has long-term Housing Assistance Payment contracts with HUD, assuring low-income housing there through 2036, according to state and federal officials.
“This allows us some time to see how we approach this," said Geona Shaw Johnson, Charleston's housing director. “Seventeen years will be here before you know it. The need for affordable housing is not going to disappear."
Meanwhile, existing affordable housing in the city continues to disappear, including low-income rentals at another complex that Highridge Costa owned.
Many years ago, The Palace apartment building on King Street was an auditorium known as County Hall, where Elvis Presley and Bob Dylan performed, Dr. Martin Luther King Jr. spoke and professional wrestling events were held on Friday nights.
More recently, Highridge Costa owned The Palace and operated the 75-apartment building as low-income housing. The company sold the complex in 2018, and it's going through a required three-year phase-out of affordable rents that have been offered there.
Charleston Councilman Robert Mitchell, a former housing counselor, represents the area that includes Bridgeview Village and The Palace. He said he wouldn't be surprised to see Bridgeview sold "because it's prime property back there."
"If that happens, what happens to all those people?," he said.
Due to the existing federal contracts, a sale wouldn't change the affordable rents for many years. However, when affordable housing does vanish in costly places such as the Charleston peninsula, residents typically move to lower-cost areas, often in neighboring cities or suburbs less convenient to jobs and social services.
Charleston was named the fastest-gentrifying large U.S. city in 2017, but one of the peninsula's largest losses of low-income housing happened years earlier.
In 2000, The Beach Company announced plans to demolish Shoreview, a 161-unit apartment complex on the upper West Side that was home to federally subsidized low-income residents. Now, a neighborhood of pricey single-family homes called Longborough sits on the land Shoreview once occupied.
When Shoreview was demolished, the city spent $6 million to create 42 below-market-rate condominiums in the same neighborhood to make up for some of the loss. It was an innovative approach to creating long-term affordable homes, but purchasing a condo was a challenge for low-income renters, and only one former Shoreview resident bought one.
Affordable and troubled
Bridgeview Village was built in 1971 and was originally known as Bayside Manor. Over the years it's been mostly out of public view, except when violent crimes there have put it in the news.
In 2010 and 2012, following homicides in the complex, city police barricaded the entrances to Bridgeview and created checkpoints there. Residents and city officials say things have gotten better since then.
"It has its problems, but it's all right," said Powell, who has lived there for two years.
Meanwhile, the surrounding area has changed dramatically.
Walking from Bridgeview Village along North Romney Street, Powell passed the 275-unit Foundry Point apartment complex under construction, where two-bedroom apartments will rent for up to $3,600 monthly, according to the development's website. Next door, The Merchant complex will have 231 luxury apartments.
"I'll probably have to do what everyone else has do, go out to James Island or Johns Island where it's more affordable," Powell said, while carrying window-washing equipment to a job nearby.
While Bridgeview residents' fears of an imminent loss of affordable housing have turned out to be unfounded, due to the federal restrictions, those fears are based on other losses of affordable housing in Charleston that are all too real.
Federal restrictions on rent prices at 220 apartments in South Carolina that taxpayers helped pay for, with tax credits for construction or renovations, ended early this year. Statewide, another 837 affordable apartments — 176 of them in Charleston — are going through the phase-out period on restrictions right now.
“Losing inventory means that we have to make up for that," said Johnson, the city's housing director. “Naturally, the city can’t go scooping up every property where restrictions are expiring."
Most apartments where affordable rents are phasing out are in urban areas — Bluffton, Charleston, Myrtle Beach, Spartanburg and others — where market-rate rents are high and property values have soared.
In Charleston, The Palace apartments formerly owned by Highridge Costa are among those where affordable rents are phasing out. The company sold The Palace for $8 million to a Los Angeles investment company in January 2018. A year later, the three-year phase-out of restrictions on rent prices began.
The Palace has been rebranded as 1000 King, and market-rate apartments now list for $1,600 to $2,100 per month. By the end of February 2022, all 75 apartments could be rented at market rates.
Charleston Housing Authority Executive Director Donald Cameron said one fundamental problem is that low-income housing tax credits are a financing plan, not a housing program. And once the value of the federal tax credits is exhausted, the best financial move for an investor is often to sell the real estate.
Even apartment complexes owned by nonprofit groups that are in the affordable housing business can become less affordable when federal restrictions tied to tax credits expire.
Two Charleston apartment complexes owned by the nonprofit Humanities Foundation with 101 apartments combined are going through the three-year affordability phase-out period right now: Grand Oak apartments in West Ashley, which has been renamed Magnolia 61, and Rutledge Place on the peninsula.
By mid-2021, any low-income seniors still living in those buildings "have to go up on the rent, or move,” said Humanities Foundation President Tracy Doran.
Both complexes serve seniors with very low incomes, roughly $30,000 to $35,000 for a family of two. Both are transitioning to apartments that would be considered affordable for middle-income seniors, but not those with low incomes, with two-bedroom apartments starting at $1,175 monthly.
"We’re a nonprofit, but at the same time we have to be smart business people," Doran said.
She said Grand Oak and Rutledge Place will still fill an affordable housing need, but not the same need they previously addressed.
“As people move out during that three-year period, we go in and renovate them and (those apartments) go to the new rent," she said. “It’s not something that people like, but we’re trying to do it in the best way we can.”
Doran said that by the time rent restrictions expire, apartment buildings typically need renovations, ranging from new appliances to new air-conditioning systems. And to pay for those repairs, rents must rise.
The Charleston Housing Authority did something similar in 2009 when it purchased two peninsula apartment complexes, 670 and 676 King St., after the buildings went up for sale because tax-credit restrictions expired.
Cameron said the complexes needed repairs and upgrades when the authority bought them. To pay for that, the authority borrowed money, and to repay the debt the authority raised the rents. Both apartment complexes are now self-supporting, with no taxpayer subsidies.
The lack of affordable housing has become a crisis in urban areas across the U.S. and in many nations. Here's a look at some approaches cities are taking.
The path forward
If Bridgeview is sold, as planned, the affordable rents there won't suddenly vanish, but city officials believe it's just a matter of time.
"It's going to be a very different community back there," Gregorie said.
Charleston officials, including the mayor and council members, are considering the city's options.
“We’re still going to try and see if we can acquire (Bridgeview), but we’d have to find someone else to go along with us," Mitchell said. “We would need someone with very deep pockets."
Doran said the high cost of land in the Charleston area is a big challenge and a key reason why the Humanities Foundation has been doing more affordable housing construction outside South Carolina recently, including creating about 1,000 apartments in Virginia.
“Normally, you would hope that as older housing phases out, new housing comes on," Doran said. "There have been a few here and there, but (in Charleston) nothing substantial."
Johnson, the city's housing director, wouldn't go so far as to say the city is considering buying the Bridgeview complex — it sits on 13 acres of what's become very expensive real estate — but "I would just say we're going to be aggressive in our approach."
While Bridgeview Village is the largest privately owned affordable housing complex in the area, many smaller apartment complexes were built with financing from federal tax credits, and rent price restrictions that came with that financing will end.
Charleston is working on a $39 million affordable housing plan, mostly financed by borrowing $20 million that voters approved in 2017. The $20 million housing bond is enough to help create roughly 600 apartments that will rent at below-market rates, the city estimates.
Despite the unusually large financial commitment to affordable housing by a South Carolina city, 600 apartments is only double the number that exist now at Bridgeview Village. And while the city works to create affordable apartments, 176 that already exist will have price limits lifted by 2022. That's the nature of the challenge Charleston and other cities face.