Now, Let’s Talk About Housing Affordability (2/2)

For a full discussion about Affordable Housing, please read our first post. As a reminder, the City of Raleigh says families qualify for subsidized Affordable Housing if they make below 80% of the Area Median Income (AMI), which is $67,450 for a family of four.

But there’s a broader issue of housing affordability that we also need to address. Those who make above 80% of the AMI are served by the private housing market. But that doesn’t necessarily mean they can afford to live here. Many people who make 80% to 120% of AMI, including some of our teachers, firefighters, police officers, and other public servants, are still priced out of the majority of our housing options.

The lack of an abundance of diverse housing options is a challenge.

So, why is Raleigh in this position?

1) We’re growing. Raleigh is an attractive place to live with a high quality of life, which is inviting more people to our area. Overall, that’s a good thing.

2) The people who are moving here are doing so with higher incomes, so they are able to spend more on housing.

3) Demand is outpacing supply. There are fewer houses on the market. In January 2009, there were about 4,500 units for sale, including single family homes, townhomes, and condos. In January 2014, there were about 2,500 units. Last month, there were less than 1,300 units.

4) There are fewer housing options. City of Raleigh’s development code (like many U.S. cities) has made it harder in recent years to build housing options such as granny cottages (ADUS), duplexes, triplexes, cottage courts, and townhomes. This type of housing is now referred to as the Missing Middle.

5) The cost of building has increased. The cost of steel, land, labor, and even city-issued building permits have all increased, contributing to rising overall construction costs.

This all results in higher housing prices. In January 2009, the median home sale across all housing types was $175,000. In January 2014, it was $180,000. This past month, it was nearly $270,000.

Since the City of Raleigh can’t set a minimum or living wage for everyone (only the state can do that), I’ll focus on how Raleigh City Council can bring housing costs down.

Presently, one of the few tools the city has for preserving affordability is called an Overlay District. This tool retains the character of a neighborhood in part by preventing teardowns of modest homes to build larger homes. Teardowns have a ripple effect of increasing the tax value of the nearby homes. While this tool is effective at preventing teardowns, it does little else to help our housing affordability challenges and only helps those already owning homes in the neighborhood.

So, in short, we’ve got to get our housing supply up for both buyers and renters. And, we should be doing so by providing an abundance of diverse housing options.

Thankfully, there are proven strategies for how the City of Raleigh and our partners can do this. In fact, Wake County’s Affordable Housing Plan mentions a few.

Here are the solutions I’ve been exploring this past year:

1) Looking to add gentle density by advocating for a by-right option to build ADUs and talking to experts about how Raleigh can grow our stock of missing middle housing.

2) Increasing density in our urban core and along transit corridors, including talking with leaders in the building and development community about how they can work in more affordable units into their market-rate projects.

3) Reducing the time and cost of doing business with the city including opposing unnecessary regulations that add to the time and cost of permitting and building housing, and finding ways to provide more design flexibility for developers.

4) Increasing the number of builders and contractors in the housing labor market by working with our partners to create a pathway for those who need jobs to get the appropriate training and connect with job providers.

This work will be challenging and it will take time. If done right, in addition to creating an abundance of diverse housing options, we’ll also be able to better protect our environment, preserve neighborhood character, create jobs, and create more equitable communities.