NEW HANOVER COUNTY — It’s no surprise New Hanover County has a perilously low stock of affordable housing. With results now in from a years-long research effort, the area’s affordability problem may be worse than previously thought.
Half of all rental households countywide are cost-burdened, meaning they pay a disproportionate share — 30% or more — of their income on housing.
To avoid being cost-burdened, a first-year New Hanover County Schools teacher earning a $38,000 annual income should not pay more than $950 a month toward their living expenses. At that rate, both renting and homeownership are nearly unreachable because there’s next to nothing in town available in an affordable price range.
Countywide, 60% of rental households are earning less than $40,000 a year. Wages are stagnant and living costs are escalating as thousands more pour into the community annually, outpacing national growth trends.
There’s broad public support for increasing affordable housing. The question is no longer if, but how the city and county will do it.
This week both New Hanover County commissioners and Wilmington City Council heard presentations commissioned by the local governments’ joint Workforce Housing Advisory Committee. Commissioner Jonathan Barfield addressed a common misconception about affordable housing.
“Typically with affordable housing, the first thing people think about are Black people and public housing,” he said. “And the two have nothing to do with affordable housing.”
Dr. Stephen Sills, director of the University of North Carolina at Greensboro’s Center for Housing and Community Studies, presented the results from a comprehensive public opinion survey, which gathered 1,463 responses. While nearly all responders (93%) said they believed affordable housing is necessary for the regional economy, Sills said a question about allowing it in an individual’s neighborhood elicited strong resistance.
A prime example of NIMBYism (not in my backyard), responders worried affordable housing would increase traffic and crime while decreasing property values. Barfield spoke to this negative perception.
“We’ve had folks that come and we have affordable housing items on our agenda like tonight that will come and say: ‘We don’t want this here.’ And for me, The underlying message is that we don’t want them here. But the reality is they don’t even know who them are. Them are your children. I’m using a bad phrase, but them are the folks that work in your county government, those people that are teaching your children. That’s who them are. But we don’t want them in our neighborhood because they are going to increase crime,” he said. “I don’t see many teachers or firefighters that are going to increase crime anywhere. But it’s this perception we have here.”
Sills found homeownership is “unreachable” for service and middle-class jobs. Those in higher income brackets ($100,000 or more) reported the highest satisfaction with their current housing condition, while those earning less than $50,000 reported the lowest satisfaction.
A majority of respondents (87%) reported affordable housing should be a top priority for their local government.
Though task-force and committee recommendations often go unadopted, Barfield said he didn’t want to put this work “on the shelf somewhere.”
“I’m ready,” he said.
Depleted housing stock
Patrick Bowen of Bowen National Research presented data to document the problem.
“You know there’s a shortage?” he asked commissioners. “Let me show you how significant the shortage of housing is.”
Over the past decade, growth in New Hanover County (15.7%) has outpaced the state (10%) and nation (6.3%), with nearly 32,000 new residents, according to U.S. Census data.
By 2025, 18,888 more people are projected to call New Hanover County home, according to Bowen. To accommodate this growth, the county (including city limits) will need 10,776 more rental units and 13,017 more for-sale units over the next decade to meet growing demand.
“You guys know me — I’m optimistic,” Dave Spetrino, developer and task force chair, told city council. “It is a lot more than I thought we would need and we are sorely behind that ball.”
Growth is projected in all age and income categories (with the exception of the 25-35 segment, which will have minor negative growth — a nationwide pattern of younger adults leaving for better jobs and a different lifestyle in larger cities).
Local incomes aren’t keeping up with soaring home prices. While median income increased by 5.8% between 2016-2019, median home prices grew three times as much, up 16.5%. Most sales are occurring in the $300,000-plus range, with dismal supply below this threshold. In June 2020 (Bowen’s study sample month), just 6% of available homes on the market (58) were priced below $200,000.
“The gap is getting wider and wider for people to purchase a house,” he said.
As for rentals, a majority of apartment complexes (59 projects, 11,627 units) offer market rates — which are on average above the affordability threshold for renters’ median income level. Vacancy rates are lower in complexes that offer subsidies or a tax credit. All apartments countywide (14,744 units) are at a 96% occupancy rate.
“You’re right on the bubble in terms of having a multi-family rental housing shortage,” Bowen told the board.
Subsidized housing has a 99.5% occupancy rate, with waitlists at a majority of public-housing projects. More than 2,300 people are on Wilmington Housing Authority’s waitlist for housing vouchers. A majority of all non-student, non-conventional rentals (duplexes, house rentals, mobile homes) cost more than $1,500 a month.
“So if you’re a low-income person that wanted to rent an apartment, I just showed you, there really isn’t much available in terms of affordable product. So then your next choice is, well, housing choice vouchers. Well, you have a long wait to get one of those. Your next choice is a non-conventional rental. And in this case, there isn’t much available under $1,500. You have to make over $60,000 a year to afford most of your non-conventional rentals,” he said.
But most rental households in the area earn less than $40,000. “So you’re starting to see, I think, a theme,” Bowen said.
Building an affordably priced rental is generally not possible without government assistance, Bowen said: “If you’re going to build a rental, you cannot start under $1,100 to make those projects work. Even if developers wanted to — to try to build affordable housing — they have a tough road to go and really development costs are so high they prevent them from doing that.”
Over the next five years, more than 4,100 new units are needed to meet growth in the city alone. Bowen explained it’s not the city’s job to build the new units, but it can and should oversee the growth with affordability in mind.
“The city in no way can support the development of over 5,000 rental units, but what the city can do is help on the affordable side where the private sector just can’t pull it off on their own,” he told council.
Both Bowen and Sills recommended the city and county adopt an official affordable housing plan that sets specific and realistic goals, including how many new affordable units or programs to support each year.
Possible tools the city and county may choose to use include providing incentives, issuing a housing bond, permitting in-laws quarters, tapping into hospital sale proceeds or increasing taxes.
With the study results in hand, the joint task force is set to present a plan at a joint city and county meeting April 27 beginning at 9 a.m. at the Wilmington Convention Center.
Send tips and comments to Johanna Ferebee Still at email@example.com