How Unaffordable? A Look at the Data

Last week, Chapel Hill’s economic development officer, Dwight Bassett, presented some data on Chapel Hill’s housing market to a reasonably-sized crowd at Town Hall. Bassett’s presentation followed a brief talk from Robert Hickey of the National Housing Conference about what’s happening in housing trends around the country.

Like many of the other audience members, it was Bassett’s data that struck me the most. (During the Q&A following the presentations, all but one question was directed at Bassett rather than Hickey). The one number that really stood out: 3117%. That is, since 1990, the number of houses in Chapel Hill valued at over $500,000 has increased by 3117%.

Compare this to more affordable price ranges: For houses valued between $100,000-$149,000, the number of houses has increased by only 32%. For houses valued between $150,000-$199,999, there has only been a 107% increase in the number of houses.

Bassett added some comparative data to further contextualize what’s happening in Chapel Hill when it comes to housing affordability compared with surrounding communities. While the median home price in Chapel Hill has risen to $388,000 in 2013, it’s only $315,000 in Cary, $237,00 in Raleigh, and $192,000 in Durham.

As these numbers alone suggest – and as Bassett emphasized during his presentation – the demand for affordable housing (for those below 80% of median income) in Chapel Hill is going unmet by quite a lot. Additional data presented by Bassett also showed that, in Chapel Hill, the growth in median housing value has outpaced inflation-adjusted median household income growth since 1990.

These numbers, along with the other numbers Bassett presented, paint a worrisome picture. How can our community, with its progressive reputation, be such an unaffordable place? The consequences of unaffordability are clear: Our community becomes a less diverse, less inclusive, less exciting and less vibrant place to live, as those who cannot afford the high prices are forced to move somewhere else more affordable.

Regional data confirm that this is the case. Intrigued by Bassett’s initial data, I wanted a few more data points, so I went to the American Community Survey to pull some comparative statistics looking at Carrboro, Chapel Hill, Chatham County, Durham (city), and Raleigh.

Housing Values

First, let’s look at the distribution of housing values among each community. You can click through the names of each area below to compare the distributions of house values (you can view the larger versions of these charts here):

As you can see from comparing the distributions, Carrboro’s and Chapel Hill’s are heavily skewed toward the higher end of the market with a very limited supply of affordably-priced houses. This becomes particularly clear when you collapse the categories and look at the percentage of houses in each community valued above and below $200,000:

These numbers speak for themselves. There’s no question that people are being priced out of Chapel Hill and Carrboro and are looking to other, more affordable places in our region to live.

Rentals

Now, let’s take a look at the rental market. Here are the distributions of the number of rental units by the monthly rental price (larger charts here):

While, on the whole, what we see in the rental market seems less out-of-step with neighboring communities, Chapel Hill’s median monthly rent is nearly $100 greater than any neighboring community:

Lessons to Learn and Policy Implications

As these data indicate, our planning policies are failing to live up to our progressive values. Housing prices are incredibly high and pricing individuals out of our community. It is vitally important that we take action now to implement policies that will enable the housing market to provide more affordable units, which means first and foremost improving our development processes to allow for more housing to be built to meet demand.

Robert Hickey posed these questions for any city looking to provide more affordable housing:

• Are adequately sized sites properly zoned to support multi-family housing?

• What underutilized publicly-owned land could be redeveloped with mixed-income housing?

• Could new neighborhood plans or master developments incentivize additional affordability?

• What would it take to reduce the time, costs and unpredictability of getting land use permits?

• Could the town join others in the region in generating funds for affordable housing?

These are critical questions that our communities need to address, particularly when it comes to adequate zoning, long-range planning that incorporates concerns about affordability, and reducing the time, costs, and unpredictability of the development approval process. His last question about joining with regional partners is also of great importance, particularly given the relatively high rents we see across the Triangle.

If we fail to take action to change course on housing affordability, I worry what Chapel Hill and Carrboro will look like in the future. I especially worry that if we don’t start changing policies now and thinking long-term about who the future residents of Chapel Hill and Carrboro will be, those future residents will only be members of a very specific group of people.