Are you having trouble filling the entry- and mid-level vacancies on your staff? If you are, one explanation might be that the talent at those income levels cannot afford to live here.
Housing expenses meet the definition of affordable when they do not exceed 30% of gross income. So, a modest two-bedroom apartment ($1,000/month) is technically affordable to those making at least $40,000 per year. Critical positions in hospitality, child care and office administration often fall well below that salary.
When housing exceeds 30% of gross income, the household is considered cost-burdened and typically cannot meet all the family’s basic needs or save for the future.
From my vantage point at WARM (Wilmington Area Rebuilding Ministry Inc.), I see a symptom of this problem. Young workers, some with children, find themselves unable to afford housing so they move back in with their parents.
Fortunately, the City of Wilmington is working on a complete rewrite of our Land Development Code (LDC) including robust incentives for workforce housing.
From my vantage point on the City of Wilmington’s Planning Commission, I hear many questions and concerns around workforce housing. Here are a few:
WHAT IS THE SOLUTION?
The new LDC does not have the solution. It has many strategies and requires many participants. Our housing problems have many causes, from the skyrocketing cost of land and building materials to chronic social issues. These problems are too complex to be solved by one entity, one sector or one document. The role of the LDC is to propose strategies, like the ones below, that eliminate barriers in the current code and create new incentives for development of workforce housing.
The new LDC recognizes the important role of infill development in a thriving city. For example, the increased lot size and extra parking requirements for adding accessory dwelling units (ADUs) have been removed, making it more feasible to build a tiny home in the backyard for your mother-in-law or lease an apartment above your garage to The Fonz.
It is not legal to force developers to include affordable or workforce units. Instead, the new LDC provides incentives such as density bonuses for developers to include 10-15% workforce housing units in multifamily projects, dispersing (instead of concentrating) workforce units throughout the city. Per HUD calculations, the maximum rental rate on a workforce unit produced in New Hanover County this year would be $1,238 per month.
The city’s Create Wilmington Comprehensive Plan and the new LDC encourage greater density near existing adequate infrastructure and, in our thriving city, near services and jobs. This reduces or eliminates high-cost water and sewer extensions, making low-cost housing more achievable.
WHY ARE THERE SO MANY APARTMENTS?
In the past few years, many apartment complexes have been built in commercial districts on major corridors using Commercial District Mixed Use (CDMU) zoning. These projects have given our city hundreds of units within walking or biking distance of restaurants, stores and workplaces.
Due to the high visibility of these projects, it is easy to conclude that there are too many apartment buildings in Wilmington. The data does not agree. Based on the economic law of supply and demand, too many apartments would translate into lower rents. Changes to the CDMU in 2020 included a density bonus for including workforce units in these projects in the future.
Wilmington does need more duplexes, townhomes and other “missing middle” products for households needing less than a detached single-family home but more than an apartment.
One strategy to encourage missing middle housing is a simpler approval process. Instead of requiring City Council approval on a case-by-case basis, the proposed process can be handled at staff level, reducing expenses and providing a more predictable timeline for the applicant.
Another strategy involves reducing setbacks and lot size requirements for missing middle projects. More of these units can be produced overall and the savings on the rising cost of land can be passed on to the future tenant or homeowner.
WILL DENSITY INCREASE TRAFFIC?
These strategies above will lead to greater residential density throughout the city. One concern is that density will make traffic heavier and lower the quality of life for current residents. The reality is, we cannot roll up I-40 and stop people from moving here. Building housing near the places people work and play makes Wilmington a better place for current and future residents.
I cannot say it any better than our planning director Glenn Harbeck: “It is often said that Wilmington does not have a traffic problem – the problem is getting the commuting traffic in and out of the city ... a greater density of development in the city – near jobs and services – is the best solution to the region’s traffic problem.”
HOW CAN I LEARN MORE?
The full draft has been released for public review and comment. Visit wilmingtonnc.gov/ LDC. I encourage you to review and comment on the many regulations that may impact your business now or in the future: signage, building setbacks, frontage, parking – but don’t overlook the features that will help ensure all workers can live near opportunities offered by companies like yours.
JC Lyle is chair of the Wilmington Planning Commission and executive director of Wilmington Area Rebuilding Ministry Inc. (WARMnc.org).