September 6, 2018; WUNC
As NPQ’s Martin Levine recently observed, when a community lacks affordable housing, the problem often is more about incomes and wealth gaps than housing stock. The story of housing policy in Raleigh and surrounding Wake County, North Carolina, illustrates some of the dynamics.
In Wake County, a local government report last year found that a total of 56,500 families who make less than $39,400 a year, an amount equivalent to 50 percent of the county median income, were unable to find housing that is “affordable,” a term that is generally defined as housing that costs less than 30 percent of family income. Overall, more than three in four low-income households in the county, home to about 1.07 million people, are affected.
“It’s easy to think of housing affordability in terms of supply. But that misses the mark,” explains Jason deBruyn of public radio station WUNC. Henry McKoy Jr., a former state assistant secretary of commerce who now teaches at NC Central University, informs deBruyn, “The lack of affordability is more a symptom of wealth inequality that we currently see than it is that we don’t have enough housing.”
Of course, Wake County is hardly the only community where it is hard for low-income families to find an affordable place to live. But therein lies its importance: The trends in Wake County are hardly unique. And sadly, but predictably, the county is treating what is largely a problem of income and wealth inequality as a simpler problem of housing supply.
The trends are clear: Between 2006 and 2016 in Wake County, the median household income for families who lack an earner with a bachelor’s degree increased by 10 percent, but rents climbed 35 percent. DeBruyn also notes that the top one percent of the population in the county now earn 20.6 times what the bottom 99 percent earn (up from less than a ten-to-one ratio in the 1970s), with the average household in the top one-percent earning $902,972 compared to the average household income of $43,850 among the bottom 99 percent.
Moreover, according to Wake County’s own data, in the next 20 years, the number of local families priced out of affordable housing is expected to climb from 56,500 families to somewhere between 120,000 and 150,000 families by 2035. The trend lines from the government’s report make it clear why this is the case.
The report projects that each year between zero and 900 units of affordable housing will be lost. Recently, losing 800–900 units a year has been the norm. As the report explains, “From 2009 to 2015, Wake County experienced a loss of approximately 5,000 naturally occurring affordable rental units offered at prices affordable to households with incomes below $39,000.” Meanwhile, the expected need is for 3,100 to 3,700 new units of affordable housing a year. The result is that the gap between housing prices and what residents can afford widens by 3,100 to 4,600 housing units a year.
DeBruyn notes that the local government has responded by adding $15 million a year to affordable housing spending. “These funds will increase and preserve affordable housing units, fund a women’s shelter, and increase the availability of housing vouchers. There’s also more funding for a program to aid homeless veterans,” DeBruyn explains.
Still, $15 million is clearly inadequate. Indeed, the county’s own report indicates that spending an additional $20 million a year might generate between 600 and 1,100 units, far short of the need. One no-cost provision, changing zoning laws to encourage the creation of new “accessory dwelling units”—also known as in-law units or granny flats—is recommended, which, if adopted, might increase the housing supply by up to 500 units a year.
The bottom line: Housing access is declining, and this, notes deBruyn, has “edged more and more people out of the market, forcing them to move farther away from Raleigh or even out of the county. This puts them farther from their communities, jobs and access to public transportation or carpool options. It also segregates the haves from the have-nots.”
And, as McKoy notes, the implications go far beyond housing:
One of the—I say—the tragedies that’s creating this vicious cycle, is that this re-segregation is happening, not only in racial lines, but economic lines, which correlate with one another. And that ultimately creates more challenges in the future to create these pathways and these ladders out of those communities. When you are thinking about building a community economic ecosystem, then you have to think very intentionally about how you connect individuals and families and neighborhoods and communities to some pathway to prosperity.