North Carolina’s Housing Shortage

Secure housing is a basic human need that is out of reach for a large portion of the nation’s population. Three main factors are contributing to a national housing crisis: affordability, availability, and accessibility. Escalating prices are making housing unaffordable for a range of incomes, with impacts particularly severe for low-income households. There is an increasing mismatch between demand and supply of reasonably priced housing options other than single-family homes to meet the needs of a changing population. Finally, housing is increasingly inaccessible, which means convenient access to jobs, transportation, community facilities, and the like, as well as housing designs that enable independent living by seniors and persons with disabilities.

The Challenge

A shortage of decent, secure, and affordable housing is impacting North Carolina’s urban, suburban, and rural communities. In the first quarter of 2023, median housing prices in eight urban markets ranged from a high of $420,000 for Raleigh to a low of $220,300 for Fayetteville, compared to $366,733 for the U.S. (National Association of Realtors (NAR), 2023). Led by Raleigh-Durham (which NAR ranked as the sixth hottest of 300 U.S. metropolitan markets in 2022), all eight markets experienced significant price appreciation during the pandemic, as advantages such as relative affordability, economic strength, and quality of life attracted in-migration to the state.

Affordable rental housing is by far North Carolina’s largest housing need, one that is especially severe for low-income households. The most expensive areas are Asheville, Raleigh, Charlotte-Concord-Gastonia, Currituck County, and Durham-Chapel Hill. In many rural and urban counties, more than 50% of renters are cost-burdened (i.e., they spend more than 30% of their income on housing costs). Housing issues in rural areas can be less visible, and resources to address them are less available than in urban areas. In attempting to address the housing crisis, local governments often find themselves caught between advocates and opponents of housing and density reform (NCLM 2023).

(SOURCE: Chatham County Affordable Rental Housing Report & Strategy Toolbox)

Potential Responses

Short-Term

Conduct municipal and county need analyses
Research comparable best practices (alternative housing types, construction methods, funding tools, etc.)
Establish housing committees to define and coordinate efforts to meet housing needs
Communicate need and identify attractive examples to build acceptance of affordable housing

Medium-Term

Develop regional housing plans to address housing needs at the regional scale
Implement universal design standards to make homes more accessible
Develop housing best practices toolboxes
Implement funding tools (housing trust funds, innovative financing mechanisms, etc.)

Long-Term

Incorporate goals such as net zero emissions, multimodal transportation, economic security, and healthy communities into housing policy and investment
Monitor national housing trends, technological and market innovations, and their implications for local, regional, and state needs and solutions

Key Stats

28% of North Carolina households are considered cost-burdened (spend more than 30% of income on housing). This includes 43% of rental and 20% of homeowner households (North Carolina Housing Coalition 2023).
The average Fair Market Rent (FMR) for a two-bedroom apartment in North Carolina is $1,120 in monthly rent and utilities (#29 nationally). An hourly wage of $21.54 ($44,812 annually) is required to afford this rent without paying more than 30% of income on housing (NLIHC 2023).
72% of extremely low-income households (0-30% of area median income) spend more than 50% of their income on housing. There is a statewide shortage of 207,837 affordable rental units available for these severely cost-burdened households (NLIHC 2023).
The number of people experiencing homelessness in the U.S. increased 12% from January 2022 to January 2023 to approximately 653,100 or roughly 20 of every 10,000 persons. The number of North Carolinians experiencing homelessness was tabulated at 9,754 in January 2023, a 4% increase from 2022 (HUD 2023).

Where in Chatham can people find affordable housing? (SOURCE: CHATHAM MAGAZINE)

Example: Chatham County

The Chatham County Housing Committee was formed in 2016 to focus on affordable rental housing in the County, Goldston, Pittsboro, and Siler City. The product of the Committee’s work was the Affordable Rental Housing Report (2017). The report’s housing needs assessment found that 66% of renter households making less than 80% of average median income were cost-burdened; the county had an estimated gap of 1,995 affordable rental units; a typical household spent 60% of income on housing (32%) and transportation (28%), less than the recommended threshold of 45%; and equity (age, race, etc.) was an important issue. The plan set seven goals to address these issues. Desired outcomes, baseline data, targets, and metrics to measure progress were established for each goal. Implementation measures have included, among others, a Housing Trust Fund, an Emergency Housing Fund, and a dedicated sales tax for affordable housing.

References

Chatham County, NC Housing Committee and Triangle J Council of Governments (2017). Affordable Rental Housing Report & Strategy Toolbox.

NC League of Municipalities (NCLM) (2023). Local Governments Responding: The Housing Crisis in North Carolina.

National Association of Realtors (NAR) (2023). Local Market Reports: North Carolina.

National Low Income Housing Coalition (NLIHC) (2023). 2023 North Carolina Housing Profile, North Carolina State Housing Wage.

North Carolina Housing Coalition (2023). County Profiles.

U.S. Department of Housing and Urban Development (HUD) (2023). The 2023 Annual Homelessness Assessment Report to Congress, Part 1: Point-in-Time Estimates of Homelessness.

David Rouse, Ben Hitchings, Anita Brown-Graham