Rapid Population Growth is not Causing Raleigh’s Housing Affordability Crisis
While the Raleigh metropolitan area is experiencing breathtaking growth, Raleigh’s growth has actually moderated in recent years. According to the US Census, from 1990-2000, Raleigh added 70,716 residents. From 2000-2010, it added 112,751 residents, but added only 63,773 residents between 2010-2020. Raleigh is adding new residents at a lower rate than in previous decades. Why might this be? Slowing annexations and fewer homes being built.
In fact, just as the growth reached its peak in the early 2000s, residential building permits fell off a cliff. Raleigh issued 6,129 building permits in 2007 just before the Great Recession. Permits dropped to 1,469 in 2009 and then hit rock bottom in 2010 at 1,260. Even in 2019 prior to the pandemic, permits only reached 4580 – still well short of the pre-recession level.
What this data shows is that Raleigh’s housing affordability problem is occurring today because of the failure to produce enough new housing units as population growth started accelerating over the last 20 years. To try and address the resulting lack of sufficient housing units, Raleigh is reducing regulations and dedicating more money for affordable housing. This includes reducing the number of mandated parking spaces, making it easier and more affordable to build senior housing, making Cottage Court residences more viable to build, making it easier to build accessory dwelling units, permitting duplexes and triplexes in more zoning districts and allowing the construction of “Tiny Houses.” Over time, these reforms will make it easier and cheaper to build a wider variety of housing in more places across the City. In addition to these regulatory reforms, voters approved the largest affordable housing bond in the City’s history in 2020. These funds will help pay for the building of affordable units for low and very low-income residents.
No rapidly growing city has solved the housing affordability crisis and there is no single solution to Raleigh’s housing affordability challenges. So elected officials must avoid letting the search for a perfect solution to the housing affordability crisis become the enemy of implementing good solutions. Raleigh continues to reduce regulations that increase the cost of housing. RaleighForward supports implementing as many initiatives as possible to begin the process of digging out of this affordability hole.
It is worth noting that while the median price of real estate in Raleigh has risen significantly over the years to around $430,000 in March of this year, it is far below cities like Portland that are often cited as having the “answer” to affordable housing. Portland’s median housing price is the 16th highest in the nation at $545,600. Seattle’s is $775,000 and San Francisco’s is $1,750,000.
But local regulatory reform can only do so much. As a recent Editorial in the News and Observer pointed out, it’s time for the North Carolina General Assembly to step up and substantially increase funding to address the housing affordability crisis that is wreaking havoc across the State. Especially given that the State is enjoying large budget surpluses. Otherwise, North Carolina’s rapidly urbanizing areas risk joining Portland, Seattle, San Francisco and so many other cities that are becoming enclaves for the wealthy.
A version of this was previously published in the News and Observer.