As housing costs increase, Wake County takes measures to address affordability concerns

Michael Perchick Image
Thursday, September 14, 2023
Wake County measures aimed at relieving affordable housing crunch
Wake County spends $10 million annually on development and preservation of affordable units, and offers incentives to landlords and developers.

RALEIGH, N.C. (WTVD) -- On a beautiful, late-summer day at Lake Johnson, it's easy to see how Wake County's ample greenspace can attract people to the region. However, the rising costs associated with living here could be keeping others out.

"(Since the beginning of the pandemic), we noticed that the rent has increased significantly," said Fatima Zahra, who lives in Raleigh.

Zahra said her family used to save $500 a month, but is now unable to do so because of rising costs.

"I don't see an increase in salaries as much to afford this (increase)," added Meriem Elhieni, who lives in Fuquay-Varina.

"Home costs have gone up 54% in five years -- 54% in five years. I can almost guarantee you that most people's income has not gone up 54% in five years," said Lorena McDowell, who serves as the Director of the Wake County Department of Housing Affordability and Community Revitalization.

A report released Thursday by Redfin noted that the median monthly mortgage payment across the country hit an all-time high of $2,632 during the four-week period which ended Sept. 10th.

"This is a national crisis," McDowell said.

Wake County spends $10 million annually on the development and preservation of affordable units and offers incentives to landlords and developers to create more opportunities.

"One of the largest costs right now for development is land. We have county-owned land that we are now dispositioning for affordable housing. If you were a market-rate developer, you can still build your building in the same way, you can still make decent rents. We're going to help you in by providing the land and then just a certain number of units, you just need to make them more affordable for 30 years. You're going to wash out, still making a lot of money, but you will have helped a lot of people in the process," McDowell said.

Since 2018, Wake County has approved or preserved 3,600 residential units. As they work to increase that number, McDowell pointed to the role that public transportation plays in expanding possible areas to build.

"We have so many areas in Wake County where we don't have those bus stops. There's tons of pockets of land that we can't develop on affordable housing because we can't get the tax credits on it or we have to do without tax credits, which means each unit costs that much more," said McDowell.

According to Triangle MLS, the median sales price for a home in Wake County in July was $474,000; coupled with interest rates that sit above 7% and many would-be buyers are opting to wait. Elevated costs have likely played a role in depressed inventory, with the same Triangle MLS report noting that new home listings fell by 31.2% in July compared to the same month last year.

There are 2,899 residential units under construction in downtown Raleigh, an area that has an apartment occupancy rate of 94.1%. Increasing stock in a high-demand area can help alleviate pricing pressure, though whether it's enough to keep up with the influx of people moving into the area remains to be seen.

"If you have more units available for those who are higher earners who might be in a unit right now that they'd like to move out of, they might want to move up to a fancier apartment, a bigger condo, buy their own house. But because that doesn't exist in our current market, they're kind of stuck in the unit they are in," McDowell said. "That unit they're in is the unit somebody else who might need that more affordable unit would love to move into. There's definitely a conversation to be had around creating more units at any level and how that does help take some of the pressure off. But the market itself will not create affordable housing. We don't have the type of laws at the state level that would require it."

Wake County has a public land disposition policy, which requires all county-owned land to be evaluated for affordable housing prior to it being used for other purposes. In a region that has earned national praise for its business community, McDowell bsaid she believes addressing housing affordability is a necessity to maintain momentum.

"If you want a healthy, thriving community, you want all the nice things that you like to have at your fingertips, then you have to consider affordable housing," said McDowell.