Whether there’s enough affordable housing in the Wilmington area to sustain or boost economic growth has been a constant question of concern for local officials and business leaders.

Nearly 60,000 new residents are expected to join the city of Wilmington in the next 25 years, with hundreds of thousands anticipated to come to the region.

“We’re a growing community, so there’s a lot of pressure on housing,” said Suzanne Rogers, community development and housing planner for the City of Wilmington.

Spending more on housing can mean spending less at local businesses or losing needed employees to areas where housing is cheaper, officials say.

In the past five years, only 116 of the more than 2,000 apartments built in the city can be rented at rates considered affordable, generally defined as an amount not exceeding 30 percent of a resident’s or household’s income, according to city staff research. In this case, the numbers involve units that are considered affordable to families of four that bring in $50,000 or less each year in income, Rogers said.

City and county officials along with local business leaders hope to draw more attention to how the problem can affect the community, as well as talk about potential solutions, during the Mayor’s Roundtable Discussion on Housing Affordability, scheduled for 8 a.m.-noon Nov. 10 at The Terraces on Sir Tyler, 1826 Sir Tyler Drive.

The event is being hosted by the City of Wilmington in partnership with New Hanover County, the Wilmington Regional Association of Realtors, the Cape Fear Home Builders Association and the Cape Fear Housing Coalition, and the topics are: “How Demographics Influence Housing,” “How Housing and Economic Development Intersect,” “The Dollars and Sense of Housing Affordability” and “How Public Policy Paves the Way.”

Housing affordability is a concern that communities across the U.S. face, according to local leaders and the federal government.

“Families who pay more than 30 percent of their income for housing are considered cost burdened and may have difficulty affording necessities such as food, clothing, transportation and medical care,” says an explanation on the U.S. Department of Housing and Urban Development’s website. “An estimated 12 million renter and homeowner households now pay more than 50 percent of their annual incomes for housing. A family with one full-time worker earning the minimum wage cannot afford the local fair-market rent for a two-bedroom apartment anywhere in the United States.”

According to 2014 U.S. Census Bureau numbers, of the 40,000 renter households counted in the Wilmington area, 56 percent were spending more than 30 percent of their income for housing, Rogers said.
 

Apartments on the way

When it comes to available apartments for rent in the Wilmington market, numbers indicate the principle of supply and demand at work. Vacancy rates remain low even as more units are planned or are entering the market, according to a recent report that focused solely on the Wilmington area.

The Multifamily Realty Advisors third-quarter market update showed that 1,269 apartments in seven projects are under construction, while 1,609 have been proposed in the Wilmington market.

“Most of the new apartment communities are very upscale and offer amenities that you would only expect in a first-class hotel, commanding monthly rents from $1.20 to $1.50 per square foot or more,” Richard Cotton, managing director of Multifamily Realty Advisors and a broker involved in apartment transactions in the Wilmington area and the Triangle, wrote in the report. The average apartment rental rate for the Wilmington market is $907 a month, with apartments in the one- to five-year age group showing the highest average rents at $1,333 per month. That’s followed by apartments in lease-up that have average rents of $1,264 per month, according to the report.

But, Cotton said, if no new apartments had been added or were on their way to the area, rental rates for the existing units could skyrocket.

“You’d see rents going up 8 to 10 percent. I think the new development has kind of kept the rents more affordable than they would have been,” Cotton said.
 

Potential solutions

Cotton included Lockwood Village, a recently completed 60-unit apartment complex, in his most recent market update. The $7.5 million tax-credit project at 4900 S. College Road received $650,000 from the city of Wilmington and $540,000 awarded by the N.C. Housing Finance Agency.

No tax-credit projects planned in New Hanover County received tax-credit funding from the state Housing Finance Agency for 2015, Cotton said. For Cotton and some of his clients, October through December is tax-credit season.

“Tax credit investors are looking for sites to get under contract because applications to the N.C. Housing Finance agency are due mid-January for the 2016 tax credit competition,” Cotton said at the end of October.

It can be hard to find land for such projects that meets tax-credit funding requirements, such as proximity to drug stores and grocery stores, and that are cheap enough to be in the running for the funds, Cotton said. Additionally, an investor would need to find a property owner selling his land who doesn’t mind waiting about eight months to find out whether the project is funded and the sale can actually take place, he said.

Typically, only one project each in New Hanover and Brunswick counties is awarded the tax credits by the state agency, “which is unfortunate, but the tax credit program is just very limited,” Cotton said.

When it comes to single-family homes, the number of homes sold each month in the Wilmington area continues to rise compared to the same periods last year, according to WRAR statistics. Home prices are also increasing, but Realtors and mortgage brokers say that renters who want to become homebuyers can get a better deal as a result of low interest rates.

And there is some help available for potential homebuyers. The city currently has a Home Ownership Pool program that provided 10 mortgages, made with partner banks, to households at or under a set income level during the 2014-15 fiscal year, Rogers said. Fourteen could be provided this year as part of that same program, she said.

The city also works with nonprofit homebuilding group Cape Fear Habitat for Humanity. Habitat homes are sold at no-profit to working families in the region who pay back the loan at 0 percent interest and who must qualify based on need, ability to pay, willingness to partner and residency, according to CFHH’s website.

Other general options for working toward meeting the need for affordable housing, used by other cities in North Carolina, include designating a penny of property taxes or establishing housing trust funds, solutions councilman Earl Sheridan has pointed out in editorial and promotional materials for the Mayor’s Roundtable Discussion.