It was heartening news when Infosys, a global technology consulting firm, announced plans to hire 2,000 people in Wake County over the next five years. The news was especially good because the new jobs will pay, on average, $72,146 a year, nearly $20,000 a year more than the average wage in Wake County.
But the addition of more high-paying jobs isn’t without complications. It’s part of a trend in the Triangle in which newcomers are driving up rents and overall housing costs and those of lesser means are struggling to keep or find affordable housing. It’s a growing problem for middle-income families and a crisis for low-income ones.
Samuel Gunther, policy director at the nonprofit North Carolina Housing Coalition, says developers in the Triangle are tearing down more affordable apartments and homes and replacing them with luxury apartments and larger, more expensive homes.
“As the population has been growing in the Triangle, all the new housing tends to be high-end,” he says. “It’s often replacing B- and C-level stock, what we call ‘natural affordable housing,’ the older stock.”
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The phenomenon is clear in Wake County. A developer has purchased the 140-unit Sir Walter Apartments in downtown Raleigh with plans to renovate the former grand hotel that had become HUD-subsidized housing for seniors. Other subsidized housing is being lost in Southeast Raleigh, a traditionally African-American area that is being rapidly gentrified because of its proximity to the booming downtown core.
“We’re tearing down and rebuilding. We’re changing the shape of our communities pretty rapidly,” Gunther says. “It’s an open question about how folks across the economic spectrum are dealing with that.”
Generally, rental housing is considered affordable when the rent is 30 percent or less of a renter’s income. Those who pay above that percentage are what the Housing Coalition calls “cost burdened,” a description that fits almost half the renters in Wake, Durham and Orange Counties. The Housing Coalition estimates the average Wake County renter can afford about $750 per month. Some new one-bedroom apartments in Raleigh rent for twice that amount.
Many people try to make do by living with their parents, taking in roommates or moving further from downtown and their places of work, where they find lower rents but gain higher transportation costs. In Raleigh, police and firefighters told the City Council they can no longer afford to live in the city they protect. The city responded with raises ranging from 6 to 13 percent. Durham also approved raises for police and firefighters.
Raising public pay helps, but the more pressing need is to hold down rising housing costs. The state of California illustrates how bad housing costs can get in an attractive market. The median cost of a California home is now $500,000, twice the national average. Housing prices have climbed as much as 75 percent in just five years in cities such as San Francisco, San Jose and San Diego. More people are living out of campers and cars. Homelessness is increasing.
The Triangle’s city and county governments are well aware of the affordable housing problem. Wake County has created an affordable housing committee to explore the issue, and Raleigh has increased its goal for adding affordable housing units. But this problem needs to be addressed at a state and regional level as well, and fast. Gov. Roy Cooper and legislative leaders should join with local governments in deciding what changes would help North Carolina’s fast-growing urban counties to provide housing in a range that is affordable for all income levels.