Friday, February 3, 2023

Reader questions: What you wanted to know about the Wilmington-area affordable housing crisis

In the final installment of our series, we tackle some reader questions about the region's housing crisis.

The state's top lobbyist for the home-building industry went to Raleigh to appeal a state decision requiring building frame inspections before further construction. (Port City Daily photo / File)
In the final story for our affordable housing series, we answer some of the questions from our readers submitted through social media and email. (Port City Daily photo / File)

WILMINGTON — We have reached the end of our affordable housing series and wanted to conclude by answering readers questions, as best as we can, surrounding the topic of affordable housing.

We asked for our readers to submit questions they had on social media, they have been edited for formatting purposes and clarity.


Reader: I want to know what the definition of affordable is and to whom. As a realtor, I know that houses in the $200,000s and rent at $1,000 are not affordable to service industry workers.

Wilmington is quickly pricing service workers into poverty. We need subsidized, affordable housing that is something better than the [current] projects, not luxury [housing], safe, secure and reasonable. My generation lived quite comfortably in 2-3 bedroom, 1-1.5 bath homes with 6 people, no dishwasher, and hard surface flooring. It can be done.

PCD: The question as to what is considered affordable is somewhat vague since affordability to someone making $100,000 is different than someone making $25,000 annually.

Affordability in the sense of affordable housing means a household does not spend more than 30 percent of their income on housing. This includes utilities, maintenance, rent/mortgage.

One of the issues we have seen is that even when developers say they will include affordable housing, someone living at 80 percent of the average median income might still be able to afford $1,100 a month and be within the 30 percent range.

From our conversations with stakeholders in the community, most people are referring to affordability for service industry workers, nurses, teachers, and police officers. Their incomes vary but tend to top out around $50,000.


Reader: There is no such thing as “affordable housing” in Wilmington any more and soon all of New Hanover and surrounding counties will be enclaves of the “haves” while the “have nots” will spending more on gas to get to their job in the Wilmington area.

PCD: This was not a question but it does reflect the opinion of many of our commenters on social media, as well as those who email and call us. Traffic is a big concern for residents already and it is correct that — as prices go up — more and more people move out of the area and will commute into the city.


Reader: You can find affordable homes in our area. The best tip I could tell any prospective buyers is to get with a local mortgage lender and at the least be pre-qualified for a loan. Even better, be pre-approved for a loan before you start looking. The houses that are affordable to the average Wilmington worker are gone in the blink of an eye. You need to be able to pull the trigger on an offer when you find what you are looking for.

PCD: Not a question but a comment from someone who works in the industry. Starter homes in the region do tend to move quite fast, both due to demand and investors buying them up and renting them out.


Reader: What is 2018-2019, to date, market rate for a newly built “starter home” in Brunswick County? What is classified as a starter home? Perhaps a particular square footage floor plan on a smaller than average single-family sized residential lot. Or, conversely, the sale price of a new townhome in Brunswick County? And lastly, is upzoning, which is a trend in larger US cities right now, a solution for the current lack of housing in the Wilmington metro tri-county area?

PCD: For perspective, in 2012 the average home price in Brunswick County for an existing home was $221,811 and $231,870 for new home construction. In 2018 those numbers increased to $269,679 and $285,719 respectively. That is an increase of $47,868 for existing homes and $53,849 for newly built homes.

In general, starter homes are smaller and use lower-priced materials but we’ve yet to come across an official definition.

A graphic explaining the lack of affordable housing in Brunswick County (Port City Daily/Courtesy Cape Fear Realtors)
A graphic explaining the lack of affordable housing in Brunswick County (Port City Daily/Courtesy Cape Fear Realtors)

In a graph provided by the Cape Fear Realtors, the supply of affordable housing in terms of months supply has dropped significantly since 2012.

In 2012 the supply of existing homes ranging from $75,000 – $225,000 dropped off from more than 15 months worth of supply to under five.

When it comes to new homes in Brunswick County, that number is lower. For homes priced $75,000-$124,999 the county has only 0.1 months supply of housing. Homes ranging from $125,000 – $174,999 are at 2.5 months, and homes $175,000 – $225,000 have a 4.5-month supply.


Reader: What is affordable off of minimum wage and a standard set of realistic bills? Example: $8 per hour job, phone bill, internet, utilities, say one credit card with a $30 monthly payment, medical costs, a $250-per-month car payment and insurance. How much house could they afford to buy? They can’t? There is the problem. A $200,000 mortgage runs about $1300/mo with insurance and everything tied in. Find a good home, 2-3 bedroom, 1-2 bathroom, that does not need to be gutted, something people would say, “yes, I’d live in that,” for under $150,000. 

PCD: For our example, we will stick with the federal minimum wage at $7.25 an hour. According to the National Low Income Housing Coalition’s 2018 Out of Reach Report, “For someone working at minimum wage in N.C., it is even harder. A full-time minimum wage worker can only afford $377 per month — less than half the fair market rent (FMR). Just to afford FMR that person would need to work 90 hours or 2.3 full-time jobs.”

From the Cape Fear Realtors group, a look at affordable housing prices in New Hanover County (Port City Daily/Courtesy Cape Fear Realtors)
From the Cape Fear Realtors group, a look at affordable housing prices in New Hanover County (Port City Daily/Courtesy Cape Fear Realtors)

In reality, the FMR in Wilmington and the surrounding area is even higher at $915 per month. The average renter can only afford $647 per month, according to the Cape Fear Realtors.

The max home affordability for someone in retail sales is a home cost of $81,653, finding a home for that price in New Hanover County or the surrounding areas is difficult.


 

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