The affordability issue is a big one in Orange County, and it’s an issue with many facets – one of which is the cost of rental housing. How is the cost of rental housing changing in our community?
“My view (is that) we have a supply-demand problem,” says Chapel Hill-Carrboro Chamber of Commerce president Aaron Nelson. “Great schools (and) great quality of life (combined with) limited supply of housing has been a big driver pushing prices up.”
How much is the cost of rental housing going up? According to U.S. Census data, between 2007 and 2009, 70 percent of Orange County renters were paying between $500 and $1000 per month for their units, while about 23 percent were paying more. Nelson says that’s changed.
“Now 23 percent (are) paying between $1000 and $1500 – that’s up – and the percentage of people paying more than $1500 a month is now at 11 percent,” he says. “Taken together, that’s 34 percent of folks paying more than $1000 a month.”
Sixty percent of Orange County renters still pay less than $1000 a month – but that’s down 10 percent from 2009, even though the cost to buy a house in Orange County has remained nearly flat.
But what’s important isn’t so much the dollar amount itself as the ability of residents to afford it. Housing is considered “affordable” if it takes up 30 percent or less of your income before taxes. By that standard, can Orange County residents “afford” the homes they’re renting?
Nelson says some of us can. According to the census data, 42 percent of Orange County residents are paying less than 30 percent of their incomes on rent. But over half of us are paying more – in some cases, much more.
“30 percent of the population of Orange County is spending more than 50 percent of their pre-tax (income),” Nelson says. “In take-home (terms), that’s 60-some odd percent…
“And that’s just the rent part. When we say ’30 percent equals affordable housing,’ we mean rent plus utilities.”
And of course that number only counts those people who still choose to live in Orange County – not those people who choose to live elsewhere, or have chosen to move out.
“And so this is (still) a real challenge we have in our community, the cost of housing,” Nelson concludes.
Nelson made those comments last month, delivering his annual State of the Community report.
CHAPEL HILL- Molly McConnell told the Chapel Hill Town Council she’s lived in rentals since 1970, but it’s getting harder and harder to make ends meet.
“I will tell you that 74 percent of my income goes to my housing, my heat, my electricity and my water,” said McConnell, who lives in the Glen Lennox neighborhood. “I am one of many, many thousands of people in this sort of situation in this community. We do not have a healthy or just community when we don’t have affordable or decent housing for all of our citizens.”
McConnell, along with a group of developers, elected officials and non-profit representatives, served on the Mayor’s Committee on Affordable Rental Housing, which presented five month’s worth of research to the Town Council on Wednesday.
The panel recommended that the town shorten the approval process for developers building affordable rentals and incentivize the creation of new affordable rentals at all ends of the economic spectrum.
Council member Donna Bell, who co-chaired the committee, told the council demand quite simply outstrips supply.
“As long as there are more people than there are units, then people will continue to pay a premium to have property here,” said Bell.
Committee members suggested putting a bond package up for a vote and dedicating as much as one cent on the tax rate to create consistent funding for the development of new housing.
Bell said taxpayers will have to decide just how much diversity is worth.
“What we are talking about is investing in whether we want to be a bedroom community or if we truly are invested in being a community of diversity. There’s no wiggle room in this. This is the baseline question,” said Bell. “If the citizens want to create a bedroom community, they should let us know so that we can start making policies in that direction and so that I can pack up my family and move somewhere else.”
But council member Matt Czajkowski pushed back against what he said are contradictory policies.
“To have a policy that says ‘we’re going to find ways to add affordable housing, when we have Chapel Hill 2020, broadly endorsed by the Chamber, which is basically going to knock down 300 affordable units in Colony Woods, makes no sense,” said Czajkowski.
In a ten minute speech to the council, he argued that Chapel Hill needs to fight to preserve its present supply of affordable rentals instead of planning to build more in the future, and he rejected the idea that more development will translate into more affordable options down the road.
***Listen to the discussion***
“When we talk about the need to add supply to the housing stock overall, let’s look at what we’ve added: East 54, 140 [West] Franklin, Greenbridge, the apartments that are coming at University [Square]. Every single one of them is among the most expensive per square foot in the entire town,” said Czajkowski. “What is the basis for the argument? Where is there any evidence at all that if we build more, or allow developers to build more, that it will result in ultimately lower rental rates?”
Mayor Mark Kleinschmidt spent five minutes rebutting Czajkowski’s remarks, saying the problem is too big for the council to just throw up its hands.
“It requires every single one of us getting up everyday and making it work, and that means coming up with new ways of thinking about things,” said Kleinschmidt. “That’s what this committee has done.”
Despite the heated debate, the council took no action on the plan other than requesting a report from town staff on the feasibility of the proposals.
In the meantime, the council faces a November deadline to make a deal with a Raleigh-based nonprofit to use low-income tax credits to build affordable housing on town-owned land on Legion Road.http://chapelboro.com/news/local-government/council-members-square-off-on-affordable-rental-plan/