Milner Commons is a 156-unit public/private venture on Russ Street in Raleigh is uilt to house seniors 55 and older with modest incomes. (Photo: Greg Childress)
High construction costs, labor shortages and supply chain issues all contribute to soaring housing costs and supply shortages, Gov. Josh Stein said Tuesday. But the state’s growing popularity as a destination for transplants is also a big part of the problem, Stein said.
The governor noted that North Carolina is the third fastest growing state since the last census. The state, he said, added more people than any other except Texas and Florida. “There are just a lot of people moving here and houses aren’t being built fast enough,” Stein said.
When people move to North Carolina, Stein said, they need a place to stay and when there is a shortage of available units, newcomers, who often come with higher salaries and larger bank accounts, are willing to pay more for housing.
“And then it means everybody else is left to struggle,” he said.
Experts, advocates, elected leaders gather
Stein made his remarks during a roundtable discussion in Raleigh with more than a half-dozen housing experts and elected officials. The event was held at Milner Commons, a 156-unit public/private venture on Russ Street in Raleigh that was built to house seniors 55 and older with modest incomes.
Tuesday’s meeting was an opportunity for Stein to discuss solutions to the housing crisis with housing experts and local officials and to consider legislation and public policy initiatives to speed up the building process to boost the state’s housing supply.
Gov. Josh Stein (Photo: Greg Childress)“Our state is growing, and people need a safe and affordable place to live,” Stein said. “We will remain focused on identifying solutions to lower the cost of housing for North Carolinians at every stage of life and work to ensure every person has a safe place to call home.”
The housing crisis in North Carolina is real. The state faces a five-year housing inventory gap of 764,478 units (322,360 rental units and 442,118 for-sale units), according to a recent statewide report commissioned by the NC Chamber Foundation, NC REALTORS and the N.C. Homebuilders Association.
And across the country, people, particularly those with low incomes, are finding rents increasingly unaffordable. A recent report by the National Low Income Housing Coalition (NLIHC) found a national shortage of 7.1 million affordable and available rental homes for extremely low-income renter households – those with incomes at or below the poverty level or 30% of their area median income, whichever is greater. This means that there are just 35 affordable and available rental homes for every 100 extremely low-income renter households nationwide.
North Carolina was slightly better off than the nation as a whole, but only slightly. The report revealed that only 41 affordable and available rental homes are available for every 100 of the 332,199 extremely low-income households in the state.
Affordable housing developers face challenges
Even though Milner Commons is considered an affordable property, Yolanda Winstead, president and CEO of DHIC, the nonprofit that developed the senior community, said the rents are higher than DHIC would like because construction costs grew and interest rates continued to increase during the development process.
Yolanda Winstead (Photo: Greg Childress)“With those things happening in real time as we’re trying to get it on the ground, we had to fill the gaps that we experienced,” Winstead said.
Raleigh City Councilman Corey Branch said affordable housing developers are facing funding challenges that require government assistance due to higher construction costs and other development obstacles.
“A lot of the costs developers are facing, people don’t see,” Branch said. “So those are the things that we see and continue to put money into … but if you raise property taxes, then you’re impacting the people you’re trying to help.”
Samuel Gunter, executive director of the NC Housing Coalition, said it is critical to focus on increasing the state’s housing supply.
“If we’re not fixing and making sure that we have enough supply, then all of the other stuff we do to subsidize and stabilize [housing] is just not going to go far,” Gunter said.
Scott Farmer (Courtesy photo: NC Housing Finance Agency)Keeping people in their homes
Scott Farmer, executive director of the NC Housing Finance Agency, said the preservation of existing homes is often overlooked in the struggle to provide safe and affordable housing. One of the agency’s most important tools is its Urgent Repair Program, which finances emergency repairs for low-income homeowners who are elderly or have disabilities and whose incomes are below 50% of the area media, Farmer said.
“We’re able to go in and do small scale repairs to keep people in their homes,” Farmer said. “Being able to open $17,000 to keep somebody in their house for an additional five years goes a long way toward saving those [state and federal] dollars because in an institutional setting, we know that’s going to cost the state and federal government a lot more money.”
Stein’s proposed state budget included $60 million to leverage federal and private resources to build more housing for low-income families, veterans, seniors and people with disabilities, he said. His proposal also includes $15 million for the Workforce Loan Program to aid in the construction and repair of affordable housing. He said he supports bipartisan proposals in the General Assembly to cut red tape and make it easier to build more homes. Budgets advanced by state lawmakers, however, have not been nearly so ambitious.
State Sen. Julie Mayfield (Photo: NCGA video stream)Roadblocks to speeding construction
State Sen. Julie Mayfield (D-Buncombe) said getting legislation passed to ease construction restrictions has been difficult this legislative session. Mayfield has introduced several housing-related bills including one that would allow more mixed-used developments across the state.
“We’re working on it, but we haven’t gotten anything passed yet,” Mayfield said. “It’s a little challenging … but I’m not giving up until that gavel comes down.”
Mayfield said voting to increase density in many communities across the state has proven to be a “one-way ticket to getting unelected.”
“Now, there are enlightened communities like Raleigh and Chapel Hill and Durham and Asheville where that’s not so much the case, but we have some communities who are not there.” As a fan of local government, Mayfield said she doesn’t like telling local officials what to do. But adopting state laws to increase density could give resistant communities a much-needed nudge.
“These bills are not trying to be punitive to local governments; they’re just trying to say we’re [lawmakers] going to take this problem and pull it up here, so you don’t have political risk around it anymore,” Mayfield said.
Homebuilder D.R. Bryan said local ordinances restricting density slows the development process and makes it difficult to build multi-family homes, which helps to increase the housing supply.
Another obstacle, Bryan said, is city and town employees who continue to work from home five years after the pandemic. He said the practice also slows the development process. Many builders prefer to meet face-to-face to discuss project rather than over Zoom, he said.
“The people who are reviewing our plans, we’re having to communicate through email and maybe Zoom, and you just can’t get it done,” Bryan said. “You need to sit there and either have paper plans or a computer and say, “OK, what do you mean here or there?’”
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