New multifamily rental housing projects in Winston-Salem tilt heavily towards high-income residents.

Winston-Salem is at the bleeding edge of a nationwide trend of developers increasingly catering to the wealthy while people with modest incomes find themselves ever more squeezed by high costs.

That’s according to a recent report by RentCafé, a nationwide apartment search website that used data from sister company Yardi Matrix on large-scale, multi-family properties of 50 units or more.

The report found that Winston-Salem is one of only 14 cities where 100 percent of new apartment buildings — not counting projects accommodating less than 50 units — delivered only luxury, or high-end apartments in 2015. Many of the worst offenders are clustered in the Southeast. Durham is also on the list, along with Jacksonville and Fort Lauderdale, in Florida; Alexandria, Va.; Milwaukee, Wis.; Kansas City, Mo.; and a Sunbelt arc of cities from San Antonio, Texas to Scottsdale and Tempe in Arizona, and San Jose, Calif.

While it might be a stretch to call all of the major multifamily housing projects that came online in Winston-Salem last year “luxury,” new housing did skew toward higher incomes. Because of the way the study was structured, RentCafé’s report did not include Camden Station, a public-housing community that opened in November, adding 30 units of subsidized housing. And the timeline parameters excluded Rockwood at Oliver’s Crossing, an apartment complex with 64 units renting from $535 to $750 per month that opened earlier this year.

“Lured by rising rents, the prospect of steady income and stable cash flows, developers are rushing to build apartments that appeal to more sophisticated generations of renters,” the RentCafé report states. “The new wave of rental properties offers more than just apartments for rent; it offers an upscale lifestyle. In addition to top-quality interior finishes, high-end appliances, beautiful building structures, designer landscaping and coveted locations, they also provide exclusive access to resort-style amenities, first-class fitness centers, concierge services, socializing opportunities and other resident services.”

The report goes on to say: “While lower-income households have been struggling with rising rates for decades, middle-income renters are affected the most by this trend. The rent crunch is climbing up the ladder to middle-income renters. With fewer affordable options, many double-income professionals who used to populate the urban cores are being priced out of the areas where they want to live. They are forced to choose between spending more than they can afford on rent and utilities, or settle for older buildings, in less attractive locations.”

The report found that while all regions of the country are experiencing an upward trend in new luxury apartment construction, the most significant increase from 2012 to 2015 took place in the Southeast, a region that includes the Carolinas, Georgia and Florida, with the number of projects leaping by 119 percent.

The Edge Flats, an apartment complex touting “oversized windows with panoramic views” for units renting from $1,400 to $1,800 per month that opened last year, is representative of the location-driven criteria of many new luxury apartments in Winston-Salem. The apartments tower over Business 40, facing towards Baptist Hospital, and is close to Thruway Shopping Center and Whole Foods.

Similarly, Link Apartments Brookstown opened last year across from BB&T Ballpark, touting “the urban living experience of your dreams,” stainless steel and granite kitchens and “private patios with spectacular ballparks views.”

Two other large-scale apartment communities that came online last year, Stafford Place Luxury Apartments and the Lofts at Little Creek, also market themselves as “luxury,” but Chris Murphy, deputy director of planning and development services for the city, questioned if the term is really meaningful.

“If I’m in the apartment business and I want to tout my apartments I’m going to tout them as ‘high-end, luxury,’ that could be just a marketing tool,” he said. “Some of them certainly cater to that. I just have a hard time believing that all those apartments that came online are luxury if you were looking at them.”

The RentCafé report defines “high-end” or “luxury” rental properties as “renters by choice” — those who who are capable of owning a residence but who choose to rent, including empty nesters and high net worth households, who generally demand exceptional quality — and “lifestyle renters,” including double-income-no-kids, or DINKs, who also demand excellent finishing quality and seek a “more social experience.”

The definition for “luxury” or “high-end” excludes apartment communities designed for working professionals such as police officers, firefighters, teachers and technical workers who are renters of necessity, and housing for blue-collar workers who can only afford lower market-rate rent, along with subsidized housing.

The Lofts at Little Creek near Hanes Mall, with rents ranging from $915 to $1,075 —are well below the affordability threshold for families earning the city’s median income of $52,339. And rents start at $759 per month at Stafford Place Luxury Apartments, located on the south end, Families earning from 30 to 60 percent of the city’s median income can afford to spend $393 to $785 on rent — barely enough to afford the community’s most basic offering — based on the rule of thumb that households should spend no more than 30 percent of income on housing.

Andrew Brod, an economist at UNCG, counseled skepticism about the findings of the RentCafé report.

“They’re looking for a quick hit,” he said of the study. “They’re looking for the clicks. It’s a blog. What is the purpose of RentCafé? A blog is a great way to draw traffic to your site. The [search engine optimization] people tell me that.”

He added that excluding projects with fewer than 50 units is a significant flaw of the study.

“What it tells us is that there are no big projects built with affordable units,” Brod said. “You could spin that in a way that makes that good news. Nothing excites NIMBYism so quickly as a big complex of affordable housing. As soon as the neighbors hear the term ‘affordable housing’ they start asking questions about traffic counts and crime.”

Construction of the Edge Flats near Baptist Hospital tells a story in microcosm about how poor and working poor people are being displaced and scattered to the outskirts of Winston-Salem.

The site was previously occupied by the West Side Apartments, whose sick, poor and disabled residents flooded a Winston-Salem City Council meeting in 2012 to oppose the rezoning request allowing the redevelopment of the property. Residents of the 75-unit community told council members they had nowhere else to go and were at risk of ending up homeless. Council members approved the rezoning under the condition that the developer provide assistance to help the former residents move.

Meanwhile, the newest affordable housing project, Rockwood at Oliver’s Crossing, is as far from the city center as possible. The complex, whose 64 units range in price from $535 to $750 per month, is located behind Griffith Fire Station, scarcely a half-mile from the Davidson county line and at least 10 minutes from downtown. The Shops at Oliver’s Crossing, a bustling shopping center anchored by a Lowes Foods grocery and provisioned with fast-food restaurants, a drugstore and barbershop, is only a half mile away, but the apartment complex’s driveway empties onto south-bound Peters Creek Parkway, forcing residents to drive in the opposite direction and make a U-turn to get back to the shopping center and other destinations towards the city center.

While council members overcame whatever misgivings they might have had about displacing poor people with their 2012 decision to approve a rezoning to make way for the Edge Flats, they could not bring themselves to pull the trigger earlier this month when neighboring residents turned out in opposition to an affordable-housing project.

The proposed 54-unit apartment complex geared for lower-income seniors at the intersection of Reynolda Road and Briarcliff Road was almost a textbook example of the kind of urban multifamily project that planning staff sees as a replacement for the utilitarian apartment complex of the 1980s, which typically lacked a connection to the surrounding community. The new multifamily housing, staff argued in a 2015 presentation, should be “responsive to consumer desires for connectivity, walkability and livability.”

The two-story apartment complex would have been built within easy walking distance of Reynolda Library and Reynolda Manor Shopping Center, and on a significant public-transit corridor.

The project also met a market need, with rents ranging from $235 to $605 per month so that residents with income between 30 and 60 percent of area median income would not spend more than 30 percent of their income for rent and utilities. As a reward for ensuring affordability, the developer would have qualified for tax credits through the NC Housing Finance Agency.

Developer Bill Scantland told council members during the May 2 hearing for the rezoning request that a market study commissioned by the state housing finance agency “indicates there’s a net demand in our city in that particular region for about 709 units that are needed. That means those are folks who are overburdened today or in substandard housing. We are proposing 54, which addresses only 8 percent of that need.”

The proposal raised immediate objections from residents of Town & Country Estates, whose residents use Briarcliffe Road to access Reynolda Road.

“Approval, as you might imagine, will lower our property values, greatly increase congestion on Reynolda Road, possibly affect the crime rate, and generally have a negative effect on the safe and quiet enjoyment of our properties,” William and Jeanne Piodela wrote in an email to staff.

The age of the future residents only partly assuaged the misgivings of the neighbors.

“This apartment complex is really 55+ low-income housing,” Debby Browder wrote. “While it would not have the problems that an apartment complex would have that was not restricted to 55+, the low income aspect causes some concern for our property values in T&C.”

Of particular concern to Browder and other Town & Country Estates residents was two dumpsters. Despite plans for 6-foot “opaque screens,” Browder objected, “We still know what is behind those screens. I assume that screening is something like what fast food restaurants use. This is not something I want to see when turning into our neighborhood.”

Scantland agreed to enclose the dumpsters in brick matching the exterior of the buildings, but he said he was not able to fulfill a request by Councilman Jeff MacIntosh to reduce the height of the buildings and set them back further from the road. At the lead of MacIntosh, who represents the Northwest Ward where the proposed project was located, council members voted 5-2 to defeat the rezoning request.

Normally, he would be inclined to support a project like the one proposed, Councilman Dan Besse said, but he felt obliged to go with the recommendation of the ward’s representative.

“I would like to be able to support affordable housing for that site,” Besse said. “It’s the kind of site that that fits.”

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