Tuesday, April 23, 2024

One-third of Wilmington households are cost-burdened. Breaking down the affordable housing crisis by the numbers

Affordable housing in Wilmington as well as the rest of the country is in short supply (Port City Daily/Ben Schachtman)
Affordable housing in Wilmington, as well as the rest of the country, is in short supply (Port City Daily/Ben Schachtman)

(Editor’s note: This is the first installment of a series looking at affordable housing in the Wilmington area. It follows our first investigation into the issue, 18 months ago. You can read that series here.)

WILMINGTON — Did you know it would take someone working 61-80 hours per week at minimum wage to afford a one-bedroom home at fair market rent in Wilmington?

In fact, in North Carolina, a full-time worker must earn $16.38 per hour to afford a two-bedroom rental without spending more than 30-percent of their annual income on housing.

These are just two of several statistics in a report provided by the Cape Fear Realtors (CFR) group — and this is why the discussion surrounding affordable housing, and the lack thereof, has been so prevalent in Wilmington.

But affordable housing can get a bad reputation simply due to ignorance — people often mistake the term as some sort of government-funded welfare push.

But that’s not the case.

“Also referred to as ‘workforce’ housing in order to emphasize the vast group of people it affects and differentiate it from public housing, affordable housing exists when housing costs do not exceed 30 percent of a household’s total gross income,” according to CFR.

This means that affordable housing affects everyone — from the homeless to billionaires — if someone spends more than 30 percent of their income on housing they are considered cost burdened.

In Wilmington, one-third of all households are cost burdened.

Of course, those who are generally most vocal about affordable housing are those who are struggling to make ends meet, but it is important to everyone.

“A city cannot be strong and vibrant if it does not offer ample housing opportunities for all income brackets or if any of its citizens are too concerned with the serious financial burden of their homes expenses to contribute to the local economy and culture,” according to the report.

A lack of affordable housing will drive residents out creating an even large income gap, but it also affects all aspects of the local economy. When people can’t afford to live where they work they have to commute — this increases traffic in and out of the city.

It can also lead to staff shortages when employees decide the travel is not worth it.

But Wilmington is not unique when it comes to the housing affordability crisis — it is a nationwide situation.

According to CFR, “In 2016, 38.1 million households were cost-burdened — 8.3 million households were severely cost-burdened (meaning they spent more than 50 percent of their income on housing) and that number continues to grow annually. Nearly half of all renters are cost-burdened, and half of those renters are severely cost-burdened.”

So how did this happen?

Since the 1960s, housing costs have continued to rise while income has barely risen at all.

“Median rent has grown 62 percent; median renter income has grown a measly 5 percent. Median home value has increased 112 percent; median owner income has increased only 50 percent,” according to the report.

It’s easy to be distracted by positive numbers that show wage growth and unemployment rates, but these often leave out things like inflation.

According to CFR, “Since 2006, wages have risen 12.9 percent overall in the U.S. But when you factor in inflation, ‘real wages’ have actually fallen 9.3 percent. In other words, the income for a typical worker today buys them less than it did in 2006.”

It’s worse locally

From the Cape Fear Realtors report.

It is difficult to talk about affordable housing in abstract terms, which is why it is important to give actual figures when discussing the problem.

In N.C., the fair market rent (FMR) for a two-bedroom home or apartment is $850.

“In order for someone to afford this FMR working full time at 40 hours each week, they need to earn at least $16.35 per hour; the actual mean wage for the average renter in N.C. is only $14.66 per hour. At this actual mean wage, the average N.C. renter can only afford $762 per month … this means that one full-time job is not enough for the average N.C. renter,” according to the report.

So what about those working for minimum wage? Well, at $7.25 per hour workers can only afford $377 per month.

“Just to afford FMR, that person [making minimum wage] would need to work 90 hours, or 2.3 full-time jobs,” the report states.

Wilmington is actually in the top five most expensive areas in the state with a housing wage of $19.10 hourly needed to afford rent. Only Raleigh, Camden County, and Currituck County ranked higher.

In New Hanover County, 38 percent of all households are cost-burdened.

“The New Hanover County FMR is $915 per month or earn $36,600 per year, but the average renter can only afford $647 per month,” according to CFR.

Not only is the cost of living higher in the Wilmington area, but wages are also lower than the state average.

“The actual mean wages in Wilmington are 13 percent lower than the state average … The actual mean wage for the average N.C. renter is $14.66 per hour, while the actual mean wage for the average Wilmington renter is only $12.77 per hour,” according to the report.

In the following series, Port City Daily will examine the affordable housing crisis post-Hurricane Florence and speak with several members of the community all working on different ends of the problem.

Send comments and tips to Michael.p@localvoicemedia.com

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