Creating Our Own Future
BY MARK ZIMMERMAN, SENIOR VICE PRESIDENT OF EXTERNAL AFFAIRS
As we embark on a new decade, this is an excellent time to reflect on what we want our communities to look like over the next ten years. Do we want them to have an inclusive, diverse population? Do we want them to be welcoming to all who want to live there? Do we want them to have housing options that are affordable so people of varying income levels can live there?
The decisions that we make locally will affect the answers to those questions. To a large extent, we decide what kind of communities we live in. We need to plan appropriately now to realize the future we want to have.
If you happen to live and work in one of North Carolina’s growing urban and suburban areas, communities are changing at a rapid pace. This is certainly true of Charlotte and the Triangle, which are among the fastest-growing areas in the country. But the same can be said for other sections of the state that are experiencing economic vitality.
With low unemployment in these areas, job growth requires population growth, and all those new people need to live somewhere. The question is, are we building enough new homes to accommodate them or not? So far, the answer is no.
New construction, while picking up recently, has not kept pace for over a decade with the demand for housing. You, as REALTORS®, have experienced this firsthand. You’ve seen the post-recession buyer’s market shift dramatically to a seller’s market over the last several years.
In short, supply hasn’t kept up with demand, and we all know what that means. Prices increase well above the inflation rate as too many buyers bid on too few properties. Unless that imbalance is addressed, over time more and more people at higher and higher income levels will no longer be able to afford the cost of housing.
The result? The day will come when middle-class families will be locked out of the market because housing options won’t be available to them. Our communities will transition from economically diverse to increasingly wealthy enclaves.
If you don’t think that will happen in North Carolina, all you need to do is look at other areas around the country that have experienced high growth for a while. In Portland, Seattle, Boulder and, of course—the worst area for affordability—San Francisco, average home prices now extend into millions. Those cities have a new housing crisis, very different from the one in the past.
This housing affordability crisis has consequences that ripple through towns. The fabric of the community is changed as people are forced to live further and further from where they work. That creates transportation challenges, road congestion, other infrastructure costs and a diminished quality of life for the commuters.
Some are tempted to respond to this trend as a fait accompli: that’s the cost of growth. But it doesn’t have to be that way. We just need to find room to house more people where we are and make it easier for builders to provide that housing.
One area in our control is local land-use regulations, which often exacerbate the supply imbalance. Many communities use a host of exclusionary zoning ordinances to prevent change. Their answer to growth is to push it away rather than find a way to accommodate it. It’s no coincidence that the cities which are experiencing the worst housing crisis have placed some of the most restrictions on new construction.
If we don’t want to end up like those areas, the time to act is before we get to the crisis stage. The time to act is now. Starting this year, NC REALTORS® will begin discussions on how we can engage communities in reassessing their land use regulations to smartly allow for more infill and density so that the supply of housing can begin to meet the demand for it. We’ll also explore how we can keep regulatory costs down so as not to artificially increase the price of a new home in the approval process.
Forward-thinking conversations are already taking place in Charlotte and in Raleigh, with its new City Council. Durham has been active in passing innovative measures to address these issues. We want to share best practices and help move reform forward. As REALTORS®, we can and should be leading the way. Keeping housing affordable is a core value.
But first, we need to decide: do we care? If we do, we must use this decade to change our future.