What’s driving the affordable housing deficit in Greensboro?
Dr. Stephen J. Sills
Director of the UNCG Center for Housing and Community Studies
In November, voters will have the opportunity to impact the quality and quantity of housing in Greensboro by voting on a $25 million housing bond. According to the City of Greensboro, the funds from this bond will be used to leverage more than $54 million in additional funding from private mortgages, federal and state development funds, Low Income Housing Tax Credits, local or private development funding, foundations grants, donations and in-kind services, as well as cost savings to non-profits. This bond and the leveraged funds will provide much needed funds to expand and improve existing programs and create new ones. Among the initiatives that will receive funding are: more workforce housing; a repair program to rehab housing that does not meet safety and building codes; new affordable housing developments; programs to assist handicapped accessibility and housing for special populations; supportive housing units for homeless, disabled, and Veterans, homebuyer lending programs, emergency repair programs for low-income homeowners; assistance to multi-family home repair; and rehabilitation programs for homeowner.
Demographic and Economic Forces Driving the Affordable Housing Deficit
North Carolina is now the ninth most populous state in the country. Over the course of the last decade, the population growth has been twice that of the nation. The 12-county region of the Piedmont Triad has grown to a population that now exceeds 1.6 million residents. At the heart of the Piedmont is one of the most sprawling metropolitan areas in the country. The Greensboro-Winston-Salem–High Point Combined Statistical Area (CSA) covers an area of nearly 1,000 square miles. At its heart is Greensboro, with a population of about 282,000; the third-largest city by population in North Carolina. Between the 2000 and 2010 census, the City of Greensboro grew 20.4 percent. This population growth, largely driven by working-aged and retired adults moving from other US cities to North Carolina, has created considerable pressure on the local housing market. The result is sustained (and post-recession rebounding) market values of most single-family homes, rising rental prices and construction of new high-rent housing for students and professionals.
The rental market has been especially strained as moderate and low-income homeowners lost their homes to foreclosures during the recession. Now nearly half of households in Greensboro are renters and, according to data from the U.S. Census Bureau, there is a shortfall between rental supply and demand. This demand has driven the rental vacancy rate down from a 2008 high of 14.6% to just 8.8% in 2014, the lowest it’s been in over a decade. In other words, 93 percent of available rental units are occupied at any given time, resulting in very little selection for apartment seekers and the ability for landlords to charge a premium for their properties. With such a tight market, there is little incentive for landlords to discount rents or even spend extra on maintaining low-rent units. There is always a renter to fill a vacancy.
While recent population growth and the deficit in the number of units has spurred in-fill and downtown development and new multi-family housing throughout the city, it has also led to significant rental increases at the same time that real wages have stagnated. According to Dr. Keith Debbage, professor of urban development in the Department of Geography at the University of North Carolina at Greensboro, rents increased more than 12.6 percent between 2010 and 2014. As of August 2016, average (median) apartment rent within the city of Greensboro was $780. One bedroom apartments in Greensboro rent for $692 a month on average and two bedroom apartment rents average $811. Rents continue to climb. As rents have increased, incomes have not kept pace. According to the American Community Survey (ACS), the median household income was $41,518 and growing less than 1 percent each year. Dr. Debbage explains: “Many working renter households in Greensboro are spending an increasingly larger proportion of their incomes on housing costs which may be pushing many families into poverty.”
To illustrate, a minimum wage ($7.25 an hour) worker would have to work 70 hours a week to afford a modest one bedroom in the Greensboro market. By comparison, the average renter in Greensboro earns $13.11 an hour, meaning affordable rent should be about $681, nearly $100 less than the median rent. The pressure on low and moderate income families is to work more and divert resources away from other important expenditures. The shortage of affordable housing forces lower-income families to shift the cost of housing to transportation, living further from the places where schools, shopping and employment are located. The impact on family spending has significant economic repercussions throughout the immediate community and beyond.
For low-income families, the gap between available affordable units and the demand for those units is even worse. According to the US Department of Housing and Urban Development, there are nearly 18,000 extremely low-income renter households in Greensboro, but only about 4,400 units to fit their limited budgets. Thus, there is only enough affordable housing supply for about a quarter of low-income renters. Even with HUD assistance, half of extremely low-income renters have no options in Greensboro. This has led to families “stacking-up” or living with friends and relatives as well as an increase in homelessness, especially among those on disability or fixed retirement incomes.
Affordable housing means little in terms of impact if the quantity available is not sufficient to meet individual, family, and community needs. The bottom line in Greensboro is a situation in which there is too little available housing stock at an affordable price, driving renters to consider either substandard or overpriced units. In all, nearly half of renters are paying too much for housing. Nearly half (48.3%) of rental households were “cost-burdened” paying more than 30 percent of their income towards rent. This is well above the 33 percent national rate of cost-burdened households.
Aging and Substandard Housing Stock
Housing quality is also an issue for Greensboro residents. Single-family homes in Greensboro are on average over 50 years old, while multi-family homes or apartments are about 35 years old. Waves of development over the years can be seen, with homes built in the 1950s or before concentrated in the city core and the most recent development (post-1988 in the outermost suburbs). Aging housing stock itself is not an issue, if kept up. However, the trend with aging rental housing is for owners not to reinvest in maintenance but to extract whatever rents they can while depreciating the property on their taxes and then speculating on the future resale value.
For the last four months, the UNCG Center for Housing and Community Studies (CHCS) has been conducting a ‘census’ of the housing stock, assessing the structural quality of housing in Greensboro. CHCS is a university-based research, evaluation, and technical assistance center that is actively engaged in funded studies of fair housing, homelessness, housing market trends, mortgage markets, community planning and studies of the impact of housing on quality of life. The housing census involves a parcel-by-parcel assessment of all lots and buildings in the City, assessing the conditions and status of all structures and the property itself. We have found that much of the housing stock in Greensboro is aging and shows signs of disrepair.
To date, we have visually assessed more than 70,000 properties. Over a third (35.8%) of the properties surveyed had some sort of issue with the lot – grass or weeds over a foot high and needing mowing; shrubs obscuring the building and needing trimming; trees hanging over roof; inoperable vehicles on the lawn or drive; substantial trash or debris in the yard; building materials, tires, automotive parts, or appliances, in the yard; or dangerously low-hanging power lines. While some of these code enforcement issues are simply a nuisance, unsightly properties do impact the values of adjacent property and can lead to potential health and safety issues.
We have also noted a significant issue in lack of repair and maintenance. For instance, 18.7% of multi-family and 31.1% of single-family homes had fair to poor roofing conditions; 9.0% of multi-family and 11.8% of single-family had no gutters; 9.0% of multi-family and 9.0% of single-family had fair to poor windows; and 3.7% of multi-family and 5.7% of single-family had fair to poor foundations. Poor maintenance of roofing leads to moisture inside the home, mold, rot, and structural damage creating potential health and safety hazards. Missing gutters leads to water or moisture in the crawl-space or basement as well as structural decay of the foundation. Poor windows pose an energy-use problem. Poor foundations may compromise the structural integrity of the home.
Our observations have also noted over 1,300 vacant buildings in Greensboro and 7,485 vacant lots (over 19,215 acres of vacant spaces). The existence of vacant and abandoned properties is often indicative of economic distress and disinvestment in a neighborhood, these properties must also be approached as more than just a symptom of these forces. Property abandonment is a cause of further disinvestment. Once there are a few vacant and abandoned properties in a neighborhood a cycle of disinvestment and decline sets in. This makes it vitally important to target investment and redevelopment efforts in areas with high concentrations of such properties.
Vacant buildings and lots affect owners of adjacent properties and destabilizes neighborhoods. Close proximity to vacant or abandoned properties can substantially decrease property values of other buildings. A study conducted by Blight-Free Philadelphia found that the average value of homes that were located within 150 feet of a vacant home in some cases decreased by over $7,000. Vacant and abandoned properties also present a loss in tax revenues to cities. Homeowners that live in close proximity to vacant or abandoned properties sometimes face higher insurance premiums because vacant properties may be considered by insurance companies as hazardous liabilities.
Link between Substandard Housing and Health Outcomes
There is a complex dynamic between housing, socio-demographic factors, and negative health outcomes. Many studies have shown that substandard housing is clearly related to increased likelihood of health concerns. Childhood asthma, lead exposure, and cancers have all been shown to be possible negative effects of living in proximity to vacant lots, boarded homes, high-density traffic areas and in substandard housing. Indoor allergens and pollutants (mold, cockroaches, dust mites, pet dander, etc.) are likely culprits in increasing respiratory issues, especially among children. Previous and ongoing studies by the Greensboro Housing Coalition, the UNCG Center for Youth, Family, and Community Partnerships (CYFCP), and the UNCG Center for Housing and Community Studies (CHCS) have found evidence to suggest a likely causal relationship between conditions found in substandard housing and increased incidences of asthma. Asthma hospitalization showed clustering in particular areas of town. Two zip codes accounted for 72% of cases. Addresses from this project were mapped by CHCS and shown to cluster in low-income areas with high rates of substandard housing.
Affordable and Safe Housing is a Fair Housing Issue
Both a casual observation of our neighborhoods in Greensboro as well as more careful geospatial analysis of data reveals that we live in a racially and economically segregated city. Segregation results from a complex set of historical circumstances, economic and social policies, and local cultural and social practices. Housing discrimination in the form of a lack of access to credit, steering, denial of access to properties, and lack of adequate transportation choices are structural impediments that lead to fewer educational opportunities for children, greater exposure to damaging environmental conditions resulting in chronic health problems, the formation of isolated ethnic enclaves, and has limited opportunities for cultural diversity in many neighborhoods throughout Greensboro.
Concentrated sectors of poverty, intersecting with concentrations of racial and ethnic, minorities creates intergenerational lack of opportunity and social mobility. Many of the poorest neighborhoods have only limited access to amenities such as good schools, health care, or affordable and nutritious foods. Access to retail shopping and high quality child care is also quite limited in most of these areas. Combined with the relative lack of extensive public transit systems, persons living in such areas are greatly disadvantaged. Concentrated poverty itself becomes a significant impediment to fair housing choice because those living in such areas must spend far more time and money in order to purchase groceries or medicine, find opportunities for entertainment, place their children in daycare while working and travel to workplaces far from their neighborhoods.
Profiles of a few neighborhoods that could benefit from the housing bond
Over the course of the last year, CHCS has conducted in-depth neighborhood profiles for some of the neighborhoods that have been hit hardest by the economic downturn, evaluating the housing stock first-hand, interviewing residents, attending community meetings, and collecting additional data. Teams of volunteers and paid staff went house-to-house in these neighborhood conducting internal and external assessments. One-on-one interviews with residents obtained information on the condition of the home’s kitchen and bathrooms, as well as about potential fire, health and safety issues. The survey also asked if any resident had health concerns such as asthma, chronic allergies, frequent headaches, and other health concerns which can be attributed to living conditions.
Glenwood is one of Greensboro’s earliest planned neighborhoods. Today Glenwood has a high rate of renter, poor housing stock, depressed housing values and pressures from UNCG’s expansion project. At the same time, the neighborhood has good access to transit, is centrally located and has an active neighborhood association. Glenwood is a neighborhood in transition, and that transition has historical roots. Originally developed in 1906, the majority of the Glenwood area was annexed by the city of Greensboro in 1923. Greensboro established a trackless trolley service in 1934, which included a route from downtown to the neighborhood. Glenwood greatly benefitted from this service, becoming an easy destination for the citizens of Greensboro. With the end of the trolley service in the mid-1950s and the area expansion of what was then the suburbs, the neighborhood began to experience deterioration that would continue through the 1960s and into the 70s.
According to our neighborhood assessments, a third of residents today pay greater than 30% of their income for housing. This leaves little for them to address the substandard conditions within the aging homes in this neighborhood. Structural concerns were found to be widespread with 37.9% of residents reporting cracks in walls and 23.2% indicating peeling paint on walls or ceilings.
One in ten residents say they have leaking pipes and 10.5% reported water leaking from the roof or ceiling. Only 63% of homes had good roofing while 36.7% were deemed fair to poor. Gutters were observed on two-thirds of homes, yet half were deemed to be in fair to poor condition: many appeared to leak, had leaves or vegetation in them, or had inadequate drainage. Roof and gutter repairs are needed for many of these homes, but often homeowners need low-interest loans to assist them in affording major capital expenditures.
With a sizable aging population, accessibility and disability are important issues to consider in Glenwood. More than one in ten residents reported that someone in their home has at least one physical disability or a mobility issue. The residents would benefit from external ramps, hand rails on steps, and grab bars in their bathrooms as would be available from bond funding.
Woodmere Park is in close proximity to high traffic areas, has an urban landfill, a high degree of density, and an aging population. The population proved to be cost burdened and unable to keep up with repairs of properties now approaching between 45-65 years old. Although a small number of homes were constructed prior to 1950, the vast majority were built afterward, during a period of rapid suburbanization in Greensboro and North Carolina from the 1950s to the 1980’s. East White Oak was the only neighborhood in this area annexed into Greensboro’s municipal city limits prior to WW II (1926). Woodmere Park, King’s Forest and Woodbriar Estates were all annexed between 1953 and 1957, in a pre-civil rights era when exclusionary zoning and restrictive covenants fostered ongoing and significant racial segregation in Greensboro and when suburban “white flight” began to peak.
Nealtown Farms is the most recently constructed residential development in the area and was annexed by Greensboro in 1985.
Nearly one-in-five indicated (17%) chronic allergies and Asthma (15.9%). Possible causes of respiratory issues: fireplaces, mold, pets, and pests. For example, 42.2% had a fireplace or woodstove but only 54.3% were cleaned annually. Mold was visible in 20% of bathrooms and 23.4% of bathrooms did not have a vent fan. Poor water quality (rust, discoloration, or bad taste and odor in the water) was reported in 17.1% of homes. The majority of the respondents were homeowners (73.5%). Residents were asked about the total cost of housing including mortgage or rent, property taxes, upkeep, and utilities. Respondent were found to be significantly cost burdened with two-fifths (41.5%) of residents paying more than 30% of their income in housing costs.
Cottage Grove Neighborhood
Unlike many neighborhoods close to downtown Greensboro that were established in the 19th century, Cottage Grove officially became a neighborhood in 1951. The 1950’s in Cottage Grove saw much development—both commercial and residential—as the area increasingly came to be seen as a middle and upper-middle class neighborhood for black Greensboro denizens. In the fall 1964, Dr. William Hampton, the first African American councilman of Greensboro and a practicing physician, founded and opened Hampton Elementary on a 16-acre lot in Cottage Grove.
With a neighborhood school established, in addition to the economic and residential development, the area further solidified itself as a desirable locale. The economic growth and comparably high standard of living from the 1950s and 1960s in Cottage Grove began to stagnate and even decline in the 1970s and 1980s in part due to the development of nearby Morningside Public Housing. Renamed English Street by the City of Greensboro, the neighborhood saw parcel development with a new focus on high-density and multi-family housing, especially for low-income tenants.
According to our interviews with current residents, nearly three-quarters are cost-burdened. The homes are reported to be in poor condition, nearly a third (29.4%) of homes have cracks in the walls, a quarter (25.5%) have peeling paint, and a third (31.4%) have leaking pipes. Residents indicated the needed assistance with installing smoke and CO2 alarms (48%), accessibility ramps and handrails (40%), tenant workshop (40%), and help reducing asthma triggers in the home (36%).
Why We Need the Affordable Housing Bond
The residents of each of these three neighborhoods, as well as many others in Greensboro, could all benefit in some way from the new and expanded programs that would be offered to homeowners, renters, and landlords through the bond. The additional resources to rehabilitate housing stock and increase access to home ownership would have a great impact on stabilizing and rejuvenating struggling housing markets.
Home is the essential foundation for everything else in a person’s life; one of three most basic needs. To be without a safe and affordable home makes every aspect of daily living more complicated. The availability of good housing plays a critical role in the economy and in communities by creating jobs, attracting new industry, reducing the incidence of foreclosures, increasing local tax revenues, and allowing working families to spend more on health, education, food, and other needs. Demand for affordable housing in Greensboro is high, yet the aging and substandard housing stock does not meet the demand leading to a crisis.
We have seen the private investment market cannot take care of all the needs for affordable housing in Greensboro. It takes public-private partnerships. We need to continue proactively and affirmatively promoting fair, healthy, and affordable housing in Greensboro for all. We need more low-cost housing in high opportunity neighborhoods. The evidence from a history of building assisted housing in already poor neighborhoods shows that it does not work. We need mixed income development to be encouraged by policy makers and made real by developers. Yet, we need to be careful about gentrification. The approach to ‘fixing’ segregation has often been to declare low-income black neighborhoods as blight and then redevelop them. In the process the residents are priced out of their neighborhoods.
According to senior research associates Rebecca Cohen and Keith Wardrip at the Center for Housing Policy, “affordable housing does more than improve the quality of life for local residents – it strengthens the local economy by creating jobs and fortifying a community’s tax base. Providing affordable housing also yields economic benefits to local employers by making it easier to attract and retain workers.”
If a majority of voters cast a “yes” vote for the bond, Greensboro will have some of the resources needed to address the affordability gap in our City. It will be able to begin fixing homes that don’t meet the Minimum Housing Standards. The City will be able to provide better homes for people with special needs, the chronically homeless, the disabled, and veterans. The bond will allow the City to fix code and safety issues such as hazardous lead in the home or no working heating system. It will also assist in providing loans to homebuyers and in building new affordable rental homes. The outcome is clear: healthier homes for residents; accessible homes for seniors; increased neighborhood stability; fewer people without housing; investment in jobs; a reduction in foreclosures; increase to tax values and tax base for the City; and more equitable access to safe, affordable housing.