Charleston officials are trying to convince homeowners they should add small, affordably priced apartments on their properties, and the city is prepared to offer funding to several residents to help build that housing.
The city's Department of Housing and Community Development intends to release up to $200,000 in grants this summer to 20 homeowners to help them build apartments above their garages or in the yards behind their homes.
The goal of the grant program is to foster more affordable housing options in areas of the city that are zoned for single-family residences.
Charleston City Council voted in August 2020 to change the zoning code to allow property owners in those areas to build or renovate so-called accessory dwelling units and to rent them out as affordable housing. In Charleston, those structures are more commonly referred to as flats, mother-in-law suites or carriage houses.
The planning department released a study earlier this year showing Charleston is likely to need an extra 16,351 affordably priced homes and apartments over the next decade to keep up with the expected population growth and ensure housing in the city is accessible for people in all income brackets.
Geona Shaw Johnson, Charleston’s housing director, said adding small apartments behind people's homes won't solve the region's affordable-housing crisis on its own, but it should make it easier to increase the housing stock in parts of the city where there isn't enough room to build larger apartment complexes.
"Our goal is to grow the number of units and housing choices that are available," Johnson said. "We know that in larger cities and other municipalities across the country accessory dwellings are being used and they are being used quite successfully."
The city's new ordinance sets several limits for the accessory dwellings: The size of apartments are limited to 850 square feet. They can't be used as a short-term rentals. Only two adults can live in a unit at one time. The people who rent the apartment need enough space for one off-street parking spot. And the property owner is required to live in the house that the unit is located next to.
City Council also decided to regulate what price the property owners can rent the apartments for in an attempt to promote affordability.
In order to receive a permit for the accessory dwelling from the city, the property owner needs to agree to set the rental price so it is available to individuals and families earning less than 80 percent of Charleston's area median income. That income level currently comes out to roughly $45,400 for an individual or $51,850 for two people.
Even with those requirements, the property owner will still be able to charge over $1,100 per month in rent. That's roughly 30 percent of the renter's annual income, which is what the federal government considers affordable.
Under that setup, Johnson said, the property owners should also benefit from the additional money the apartment will bring in.
The median purchase price for a single-family home in Charleston County is now over $500,000, according to the Charleston Trident Association of Realtors. That means adding rental income could help new homeowners pay off their mortgage faster, Johnson said, or enable older city residents to remain in their homes.
"That's a plus in my opinion," Johnson said.
For now, the city is working on the permitting process for homeowners who want to add an accessory dwelling to their property. Johnson said her department is also working with architectural firms to develop some preapproved blueprints for homeowners to build those units.
She expects the city to start accepting applications for the grant program by late July or early August.