NC REALTORS® and several other entities, all listed on the acknowledgements
page of this report, retained Bowen National Research in August of 2021 for the
purpose of conducting a Housing Needs Assessment (HNA) of the High Country
Region in North Carolina. Specifically, the High Country Region consists of
Alleghany, Ashe, Avery, and Watauga counties.
With changing demographic and employment characteristics and trends expected
over the years ahead, it is important for the Region and its citizens to understand
the current market conditions and projected changes that are expected to occur
that will influence future housing needs.
Here is the most relevant information included in the assessment:
- The High Country’s median home value of $223,906 is above the state’s estimated value of $217,574.
- The highest median home value is in Blowing Rock ($436,585), next is Boone ($286,653). Lowest is Alleghany at $160,836.
- The highest average rent is Blowing Rock ($1,012), lowest is Alleghany at $608.
- There are an estimated 6,448 renter households and 5,524 owner households in the High Country that are cost burdened (that pay more than 30 percent of income on housing costs).
- More than 1,200 households in the region live in substandard housing (mostly overcrowding, others due to kitchen and plumbing issues).
- 7 percent of renters in Boone are cost burdened (almost half, 48.6 percent of renters, are severely cost burdened, where housing cost exceed 50 percent of income).
- The region’s share of pre-1970 housing stock (29.8 percent of renters, 25.1 percent of owners), is higher that NC’s share (25 and 22.7 percent).
- Overall, demand for multifamily rental housing is very strong within the High Country, given that only one of the 919 surveyed units were vacant, resulting in an overall 99.9% occupancy rate.
- “In typical, well-balanced rental housing markets, the occupancy rate is generally between 94% and 96%. As such, the local market’s 99.9% occupancy rate is extremely high and indicates that the market is suffering from a significant shortage of multifamily rental housing.”
- According to a representative with the Northwestern Regional Housing Authority, there are approximately 925 Housing Choice Voucher holders within the housing authority’s jurisdiction, and 392 people currently on the waiting list for additional Vouchers. As such, there appears to be a development opportunity for a variety of rental products.
- Median collected rents range from $365 for a studio unit in Alleghany County to $2,200 for a three-bedroom unit in Watauga County.
- “More than half of the surveyed market-rate projects consist of two-bedroom/2.0-bathroom units or larger with median rents of $920 or higher. At this rent level, a household would have to have an annual income of $36,800 or higher.”
- As shown in the Demographics section of this study, 55.0% of the Region’s renters have incomes below $30,000. As a result, a large portion of area renter households could not afford most two-bedroom or larger units if one did become available.”
- “The daily rental rates for the identified vacation rental units (in Watauga) range from $59 to $308, which is equivalent to approximately $1,795 to $9,368 per month.”
- These rates indicate the premium for building or converting existing housing stock into vacation rentals.
- In Watauga, “the number of occupied rental units has reduced by 401 between 2010 and 2019. The total number of rental units (both occupied and vacant, [which are seasonal or recreation]) has also decreased significantly during this time period. The total number of 9,849 units in 2010 decreased to 8,900 in 2019, a reduction of 949 units, or a decrease of 9.6%.
- “While the decrease may be due to a variety of factors (e.g., rentals being converted to owner-occupied units, units lost due to natural disaster, units lost due to demolition or conversion to non-residential uses, etc.) it is likely that many permanent rental units have been converted to short-term vacation rentals.”
- The median sale price of homes sold in the region increased by $119,000 between 2018 and 2021, resulting in an average annual increase of 17.2%.
- “As of last October, 417 housing units were listed as being available for purchase in the region. – A vacancy/availability rate of just 1.2 percent, well below the 2.0 or 3.0 rate in a healthy well-balanced market. Inventory of available for-sale housing is extremely limited in the region.”
- Nearly three out of four available for-sale homes within the region are priced above $300,000. The median list price in the overall region is $475,000.
- “Conservatively assuming a 5% down payment, a household would have to earn approximately $150,000 annually to afford a median-priced home.”
- “Based on 2021 estimated Census figures, only 6.8% of households in the region have the income to buy a median-priced home.”
- Stakeholder surveys indicated that “rental housing priced under $1,000 and for-sale housing priced under $250,000 was of the greatest need, including affordable workforce housing and housing for millennials.”
- Most respondents indicated that common barriers limiting housing development include development costs (94.1%), cost of labor (88.2%), and cost of land (88.2%).
- “Most employers surveyed (79.0%) stated that in the past couple of years they have experienced difficulty attracting and/or retaining employees due to housing related issues and challenges.”
- Overall, there is a housing gap of 5,177 rental housing units and 6,349 for-sale housing units in the region over the next five years.
- “the greatest gap appears to be for housing generally priced between $170,000 and $285,000.”
- Employer survey quotes:
- “Housing is always a part of the conversation with prospective applicants…assistance with offering more and better choices for those prospective applicants would be most helpful for recruitment and retention.”
- “New-to-the-area school employees are very challenged to move here due to the scarcity of affordable rental or for-sale properties.”
- “We have difficulty attracting qualified candidates from other areas to fill existing vacant positions due to availability and cost of existing housing.”
- “There are little to no housing options for educators in the High Country. It is difficult to hire new teachers because they are concerned about a place to live.”
NOW FOR THE RECOMMENDATIONS. Here’s a sample of what the assessment recommends that leaders in the High Country do about these findings:
- Develop an overall outline or mission statement; establish a Housing Production goal (short-term and long-term) and a Housing Funding goal, develop an action plan …
- Increase Density.
- Re-evaluate/Reimagine Building & Design Standards (e.g., property setbacks, parking, etc.).
- Evaluate process allowing lot splits to increase buildable land with existing infrastructure.
- Evaluate zoning that would allow property owners to add new housing addition or convert existing space into residential use (accessory dwelling units).
- Assess residential development fees and consider reducing, waiving, or reimbursing government fees.
- Implement a residential building permit process and/or rezoning process that expedites timelines for targeted products.
- Explore land bank process to determine if it makes sense to establish a land bank to acquire, prepare, and convey properties for residential development use.
- Local governments can be proactive in providing predevelopment assistance for developers to help facilitate development and offset some development costs. This may include site prep work, paying for appraisal/feasibility studies, or other preliminary costs often incurred by developers.
- Evaluate the possibility of issuing a housing bond to help pay for residential development for targeted product types.
- Explore establishing a housing trust fund to help support affordable residential development and preservation.
- Explore Tax Increment Financing Districts, Promote/Leverage Qualified Opportunity Zones QOZs.
- Consider establishing a first-time homebuyer program for qualifying households to help with home purchase down payment, likely in the form of a grant.
- Attempt to secure additional Housing Choice Vouchers for low-income households, promote benefits of vouchers, and assist property owners in getting units to meet HUD standards.