In many ways, today’s Asheville is a victim of its own success.
The city is home to hippies and hikers, retirees and big city refugees, hipsters, foodies, brewers, farmers and artists of every sort. Downtown, a compact space bustles with life. Traffic inches along Patton Avenue and College Street, stalled by lights spaced a mere block apart. Firetrucks blast their horns as knots of pedestrians clog the street corners, waiting for their signal to cross.
Adding to the clamor, washboard-toting musicians perform traditional Appalachian tunes as tourists gather round, phones out, to share “weird Asheville” with friends back home.
For the past decade or more, the city’s been conspicuous on the national radar — and its population has spiked sharply. But living in such a desirable place can have unwanted consequences: in Asheville’s case, a severe housing shortage, skyrocketing rents and home prices, overcrowded streets with no place to park, and an abundance of lower-paying, tourism-based jobs.
Surrounded by mountains and crammed into a 45-square-mile valley, the city of Asheville is bursting at the seams, and increasingly, Buncombe County is feeling the effects of the spillover as well. Meanwhile, city and county officials are scrambling to combat the challenges posed by urbanization, overpopulation and a growing gap between wages and housing costs.
No vacancy
Every five years, the city commissions a Housing Needs Assessment and Market Study; in January, Patrick Bowen of Bowen National Research presented his findings.
Bowen, the founder of the Pickerington, Ohio-based company, has conducted real estate market analyses in hundreds of cities around the country. But as Xpress reported last winter (“Study Highlights Asheville Housing Challenges,” Jan. 20), he’s never seen the mix of extremely low apartment availability and high population growth that now confronts Asheville.
With the vacancy rate for multifamily rental housing at 0.9 percent, landlords can raise rents to meet the high demand. Nationally, the vacancy rate sits at around 5 percent, which is considered healthy.
“When demand increases and the supply doesn’t keep up, then prices rise,” says Mike Figura, who owns Mosaic Community Lifestyle Realty. “Asheville’s population has grown faster than houses have been built — apartments especially — partly because we’re constrained by our land.”
In the mountains, he continues, “It’s hard to build single-family houses in tracts, like they do in other cities and suburbs. If you’re a home seller, then that’s a good thing; but if you’re somebody looking to move to Asheville, buy a house or rent,” you’ll have to make some sacrifices, Figura explains. “Some people are willing to take a house with smaller square footage that’s in not as good condition, because they have a strong location preference. Other people need a house in better condition or a larger house, so they push out farther from the city, where prices are cheaper.”
Low wages
You can’t talk about affordable housing without considering income levels.
At an April 21 retreat, Planning Department staffer Donna Cottrell told the Buncombe County commissioners that the U.S. Department of Housing and Urban Development pegs the median household income for the four-county metropolitan area (Buncombe, Haywood, Henderson and Madison) at $32,200 for one person, $44,800 for two, and $50,400 for three. Other sources may give different numbers, depending on which specific areas they include, but the basic message doesn’t change much: low wages and high housing costs.
In Buncombe County, the median monthly rent for a two-bedroom apartment is $916; for a two-bedroom house, it’s $950, according to the Bowen report.
Yet many local people (such as firefighters, teachers, wait staff, child care and construction workers) aren’t making anywhere near the $40,450 per year that is needed to comfortably afford such rentals.
The widely cited benchmark is that affordable housing should cost no more than 30 percent of one’s monthly income. In Buncombe County now, however, 44.5 percent of renter households are considered “cost-burdened” (i.e., spending more than 30 percent on housing), and another 21.7 percent are “severely cost-burdened” (spending more than 50 percent), said Cottrell.
And meanwhile, notes the Bowen report, roughly 27 percent of Asheville’s current renters make less than $15,000 a year ($1,250 per month before taxes) in a city where the median cost of a studio apartment rental is $720 per month, and a one-bedroom is about $836. In other words, 27 percent of Asheville renters would have to spend about 57.6 percent of their pretax income to live on their own in a small studio — or 66.9 percent if they wanted a one-bedroom apartment.
After taking out 20 percent for taxes, this leaves those renters with somewhere between $164 and $280 a month to cover all other living expenses. And even with two earners in a household, the numbers often don’t add up.
So much for rentals. And if you’re trying to buy a home, things get even worse. At the commissioners’ retreat, Cottrell noted that the median home price in the county was $215,000 — and, to properly afford that, a household would need to make at least $67,188 per year. But that’s $22,388 more than the median income for county residents, and meanwhile, housing prices continue to climb.
One key reason for all this, of course, is the preponderance of lower-paying service sector jobs. Nationwide, many areas are grappling with the loss of manufacturing jobs; ironically, however, Asheville’s situation is also tied to its rise as a tourist destination.
The main industries here are related to either tourism or health care, notes Jeff Staudinger, the city’s assistant director of community and economic development. “We do have a significant manufacturing economy, but relative to the general economy, it’s a lower percentage. And our gross product is also relatively low per wage, so that really influences the wages that can be paid out the other side.”
Asheville is not alone in grappling with these problems: High housing costs are common in many big cities. But wages also tend to be significantly higher in those places — and even the service sector has more potential customers. Part of Asheville’s problem, says Staudinger, is “the size of our city relative to the demand. We’re not a Charlotte marketplace.” And the very demand that’s helping drive the housing crisis applies to the job market, too, giving many local employers the same kind of leverage that landlords enjoy.
No end in sight
Between 2000 and 2010, Asheville’s population grew by 21.1 percent, even as the rest of Buncombe County saw a 15.5 percent increase.
“We’re seeing the market in the county tighten up a lot, relative to where it was last year,” says Figura. “It went from a balanced market to a strong sellers’ market. … And as of the second quarter, the median home price in the city is higher than it’s ever been: $235,000. That’s even higher than it was at the last peak [in 2007], before the recession, at $225,000.”
Historically, houses in Buncombe have tended to command higher prices than those within the city limits, but Asheville began outperforming the county in 2011 — perhaps, Figura speculates, due to the “higher preference toward urban living among millennials.”
Still, there may be some good news here. As developers start showing more interest in Asheville, we should see some improvement in our housing numbers, Figura predicts. “For the longest time, developers didn’t want to look at markets like Asheville, because they were too small. They were focused on larger markets like Charlotte, Atlanta and D.C.”
“That’s changed as our population has grown,” he explains. “Our popularity is rising, and our low vacancy rate has caught the eye of a lot of developers.”
In the last five years, the population has increased by about 7.4 percent, and the Bowen report expects that trend to continue.
In the meantime, though, things could be worse. “We’re not at the top of the [housing] pricing curve,” notes Staudinger. “We do have a limited housing supply, but we are not Tokyo or New York City. And I think that, if you talk to some folks from Atlanta, they’ll tell you we’re not Atlanta either.”
Until development catches up with the population influx, however, the vacancy rate will remain stagnant, making it hard for many Ashevilleans to afford city prices, says Figura.
Playing catch-up?
The Bowen study indicated 40,504 total households in Asheville: 50.7 percent renters and 49.3 percent homeowners. Over the next five years, it predicts, Asheville will see another 1,338 homeowner households and 1,748 renter households moving to the city.
And with limited buildable land available within the city limits, the only place to go is up. “It’s going to be dense,” maintains Figura, who has a background in urban planning and development. “Land is running out, and in a lot of cases, they’re tearing down buildings to build another one.”
Several multifamily housing complexes are currently being built or in the works, he continues. “The question is: Will our population continue to grow? And is this going to fill the void and return our normal vacancy levels? Or is our population going to continue to grow just as fast as apartments are being built?”
Figura believes things will start getting better. “I think we’re playing catch-up right now, and at some point [the demand] will be filled.” Compared with other cities, he continues, “We don’t have a particularly high population growth rate: It’s more of a supply problem.”
In Charlotte, 21 percent population growth over a decade wouldn’t be cause for panic. In fact, that city’s 35 percent rate in those same years far outstrips Asheville’s; Raleigh, meanwhile, comes in at a whopping 46 percent. “They’re not as constrained by topography,” Figura explains, “so they can build a lot — and more quickly.”
And in fact, notes Bowen, Asheville’s growth rate is really more like 12 percent, because the city annexed a number of areas during that decade.
Staudinger, however, takes a somewhat less optimistic view. “You’ll get many economic theories about what drives down housing prices,” he points out. “The one that typically gets a lot of traction is about the supply-demand curve. If you see a real building boom of new housing, then, theoretically, that will drive down the pricing for existing housing that may not have the level of amenities or efficiency the newer homes have.
“But I think if we look three to five years into the future, we are nowhere near the point where even the suggested pipeline would be sufficient to really have a serious impact. There’s a lot of room in the market to continue to fill demand without driving prices down.”
Still, Asheville’s future, Figura believes, will probably include a lot of five-story apartment complexes, which are cheaper to build than taller structures. “I think that’s the only way we’re going to really solve it,” he maintains. “People are going to continue to build houses, but it’s not going to be able to keep up with demand. A lot of land just outside the city isn’t served by utilities. You just can’t build on land when you don’t have water and sewer.
“It’s a lot more cost-effective to make housing if you’re building multifamily,” he continues. “Land cost is really high, and you structure your building around that.”
Staudinger, however, cautions that “The apartment development that’s happening is not always inexpensive to develop. There’s topography challenges, flood plain challenges, the adequacy of infrastructure. All this provides some limits to our growth.”
In any case, however, multifamily housing is exactly what Asheville seems to need most.
Searching for solutions
“There are no vacancies among the 3,362 surveyed affordable (tax credit, government-subsidized) rental units in the city,” notes the Bowen report. “This occupancy rate and the long waitlists maintained at these projects indicate that there is pent-up demand for affordable housing in the city.”
The analysts surveyed 9,232 Asheville apartment units and found all but 82 of them occupied.
City officials are well aware of the problem. Asheville’s five-year Consolidated Strategic Housing and Community Development Plan, approved by City Council on April 28, states: “Prices of homes for sale are rising and are now at prerecession levels. Rental housing is full. Supply of homes — both for sale and for rent— is the greatest issue for low- and moderate-income households.” The consolidated plan is based on numbers from the Bowen report.
“At the end of June,” says Staudinger, “City Council passed a resolution establishing 2,800 affordable housing units to be constructed in the next seven years.” But that, he continues, will barely put a dent in the 8,751 additional residential units the city says it needs to bridge the gap.
Clearly, addressing Asheville’s housing crisis will take more than just building additional residential units.
“Affordable housing is not just a housing problem,” Figura explains. “It’s a housing supply problem; it’s a wage problem; it’s an employment problem.”
Staudinger agrees. As for the city’s role, “One of the questions we consistently ask is, ‘What can a local government do?’ And the second question is, ‘What will a local government do?’ I think, right now, we’re trying to answer those simultaneously.”
The current plan, he continues, is to “increase our investments in affordable housing; eliminate barriers created through our regulatory process; provide financial incentives; continue to look at and seek to increase the allowable densities — and increase our partnerships with housing developers.”
Figura, meanwhile, offers these suggestions: “If you’re a business owner, pay a living wage. If you go out to eat, tip your server well. Support the industries that aren’t making a lot of money whenever you can. It’ll help people afford the housing in Asheville.”
Asheville may be facing a housing crisis but that doesn’t stop every media out let in town touting its place on the lastest “best city” list. Talk about over hype, after a certain point one has to face reality. This city has become a magnet for seekers, travellers, dreamers, retirees and big city cash-outers. No wonder there’s not enough housing! Beyond that, Asheville’s culture is anti-growth, pro-green space and not exactly embracing of the wave of new-comers that want to make the city home. How many times do locals moan about how Asheville has been ruined by growth? How many local businesses hire anyone new in town? I personally have lived and left Asheville numerous times, mainly because I could always find better opportunities elsewhere. I’m sure there are thousands that have come here with high hopes only to face a harsh reality. This city is very cruel to those that bought into the hype, followed their hearts and landed in a place that really doesn’t want them, but sure likes leading them on. Talk about a tease! If this city really wants to deal with housing, how about treating it like the crisis it is? How about designating certain areas as development zones, with huge incentives for builders? How about creating a temporary housing park, with sites for camping? People are doing it anyway, might as well keep them out of the woods. How about simply stopping the hype machine for a while? Stop it with the lists, the PR machine, the blown up image of Asheville. How about a reality campaign that shows young people leaving in droves to bigger cities, the struggling service and hospitality workers? How about letting people know that life is hard here, you can’t just drink beer, mountain bike and do yoga like you did on vacation. There is a huge reality gap in this town and the waves of dreamers will keep on coming until they know the truth. If this city can’t take radical action to help house people, it needs to stop pretending that everyone can move here and be happy.
@JC Tripp – I agree with everything you said. To borrow a phrase, “the city has started to believe in it’s own legend.”
When a person gets to at least middle-age, as I have, you’ve been through a few bubbles and crashes so you begin to be able to recognize them. For the last six months I’ve felt like Asheville is somewhere in the bubble phase. And, as is usual, it won’t get recognized by most until the next recession hits. Then there will be a reset; fewer tourists, closing stores and restaurants, people moving away to find work. Painful as it may be, it’ll be healthy in the long run.
” Beyond that, Asheville’s culture is anti-growth, pro-green space and not exactly embracing of the wave of new-comers that want to make the city home.”
And much of that anti-growth culture is driven by, guess who, people who moved here and thus are part of the growth they lament so much.
“If this city really wants to deal with housing, how about treating it like the crisis it is?”
Because that would require some actual action which might (gasp!) mean fewer big upscale housing developments for the big bucks moving for their Shangra-la and we MUST make sure people like that have their every whim pandered to.
“How about simply stopping the hype machine for a while? Stop it with the lists, the PR machine, the blown up image of Asheville.”
Becasue that would mean that the local Chamber of Commerce who go completely out of business since that kind of self gratification is all it does. And goodness knows the CoC has never been told “no” by anybody in this town.
While I agree with a lot of what you say @J.C. Tripp, I think it is a person’s responsibility to research an area before they decide to move and secure a job and a lease BEFORE you arrive. I can’t tell you how many friends and acquaintances I’ve had to warn against a move to Asheville without these basic requirements. Many people here have has rude awakenings since moving here. I think you are exactly right- people can’t expect to live here as if they are on full time vacation. Asheville has it’s issues like any other city, whether it’s in a gorgeous mountain setting or not. I do hope that Ashevillians embrace urbanism and increased density in order to help our fellow citizens with affordable housing. Wouldn’t it be great to be able to walk to the grocery store!?
” I’m sure there are thousands that have come here with high hopes only to face a harsh reality. This city is very cruel to those that bought into the hype, followed their hearts and landed in a place that really doesn’t want them, but sure likes leading them on. Talk about a tease!”
That’s because tourist towns in general are not nice places, nor are they genuine places. Consider a hotel: all that happy-smiley, “We’re so happy you’re here!” hospitality is a lie. It only lasts until your money runs out, at which time you will discover that a hotel is loyal to no one and loves nothing. Now consider how, when a city is made up of hotels, that false welcome expands from a single building to the entire place. Tourist towns like Asheville have one goal and one goal only, and that is to separate some disaffected rube from their money. Most of the time the rubes don’t know it until they’ve already made up their mind to move here, been fed a steady diet of lies from their Realtor, and are left to discover that Asheville is an actual city with actual city problems, and there is always someone with more money than they have ready to push them out. Tourist towns have a certain viciousness and ruthlessness to them that you don’t find in crummy, workaday places like Charlotte or Greensboro. Tourist towns are just plain mean, and for good reason: if you’re dawdling and gumming up the works, that means you’re taking up space that someone with money could be utilizing, so you have to go. The basic message from a tourist town like Asheville is that if you don’t have money, and especially if you don’t have enough money to buy a house, go away. We don’t care about your happiness or your pleasure. If you happen to obtain some of that while giving us your money, that’s great, but what we really care about is your money and taking as much of it from you as we possibly can.
Whatever. Developers fall all over themselves to build $800,000 homes, condos, and upscale apartments, but when it comes to housing that the average and/or lower wage persons can afford we are suddenly “constrained by our land.”
There has been lots of hand wringing in Asheville over this issue for for at least the past 20 years but never any action. Here is more of that hand wringing.
Sadly, that is true everywhere, JL. That is not unique to Aville.
Jaded – If I was a developer, I would build in the higher tier also. There’s more margin in it.
But, your point is well-taken about the big price tags and it’s a fair assumption that more than 50% of those new 800K+ homes have mortgages. Is this starting to sound familiar? To me it seems like 2004 -2007 all over again. I read about real estate around the country and large parts of Calif have SERIOUS bubble prices and try finding even a semi-cruddy house in metro Denver under 250K.
The next recession will at least somewhat deflate Asheville’s balloon, along with the rest of the USA.
“Jaded – If I was a developer, I would build in the higher tier also. There’s more margin in it.”
And I appreciate your honesty. I just wish developers who be so honest rather than spewing out that claptrap about being “constrained by our land.”
We are always told by free market worshipers that the market will fill any demand there is. Well, the market has failed and failed abysmally in provided the needed housing in Asheville. This same market has determined that wages in Asheville will be low and housing costs will be high. This has been a problem in Asheville for many, many years, and yet all we get is a lot of hand wringing from local officials as they chase after the big bucks.
Jaded – Well, I hear you about the honesty thing but, frankly, there are SO FEW people who are honest these days that I have to stop and think about it when I encounter it. It’s so rare, I have to make sure I didn’t miss something. And, of course, am relieved when I realize I came across a straight-shooter!
No, a free market isn’t a perfect mechanism. If it was, it would anticipate needs and gaps *before* they happen and have investors at the ready but, that’s not the real world. However, in the long run it will perform better than a centrally-controlled economy.
Wages – I still continue to be baffled about how many people think great-paying jobs are supposed to drop into AVL from the clouds. It’s not going to happen! In fact, it’s quite simple: if a person wants to live in WNC and have a good income? Go into medicine, law or start their own business….that’s it. And whereas I get that the minimum wage crowd wants to be able to eat, etc. what never seems to be addressed when that topic comes up is that — those jobs are not supposed to be careers! They are entry-level.
The other thing is that the folks who think $15 p/hr is appropriate are totally penny-wise and pound-foolish. They are pricing themselves out of a job! Just wait and watch….as more robotics and kiosk-type payments roll out, eliminating the humans. It’s already happening. I saw a news segment showing customers in McDonald’s in China placing their own orders on a kiosk. Pretty soon they’ll have robots making the burgers too.
Lastly, funny what I came across today related to my prior comments, title: TBTF Mega Banks Lowering Downpayments and Credit Standards to Keep High End Housing Market Going
(TBTF= Too Big to Fail) http://libertyblitzkrieg.com/2015/08/05/tbtf-mega-banks-lowering-downpayments-and-credit-standards-to-keep-high-end-housing-market-going/
Yep, the next downturn ought to be a doozy.
“This city has become a magnet for seekers, travellers, dreamers, retirees and big city cash-outers”. And this is a problem why exactly? Certainly the retirees are not taking jobs away. Probably the same for those “cash-outers”. Young people will always leave their home town. That is part of being young unless you live in a large metropolitan area. And it isn’t Asheville putting itself on those ‘best of’ lists. Doesn’t work that way. So Asheville merchants should downplay this when it brings money into their businesses? If not embracing newcomers is defined by not bulldozing the town to turn it into another Charlotte (where I lived and which, IMO, had 0 personality) then good on them. I do hope they find the right balance and improve the housing situation. Americans do have a knack for loving a good thing to death so the leaders need to be careful & thoughtful about this. I bought outside of Buncombe Co because I was completely outgunned there but I’m okay with that because I am one of those evil almost retired dreamers. I have to mind my pennies.
“This city has become a magnet for seekers, travellers, dreamers, retirees and big city cash-outers”. And this is a problem why exactly? ”
It’s a problem because this is what is driving the demand for housing which is what it driving prices up thus putting us in our crisis situation.
“Young people will always leave their home town. That is part of being young unless you live in a large metropolitan area. ”
Always? I think you may be applying you personal experiences to others. I know lots of people who have remained in their hometowns, many smaller than Asheville. I also know lots of Asheville natives who have remained as well as those who longed to stay but couldn’t.
“And it isn’t Asheville putting itself on those ‘best of’ lists. Doesn’t work that way.”
Actually it does. Those lists aren’t organic the are contrived and manipulated and if you don’t think that the local Chamber of Commerce works actively to see that Asheville gets that kind of publicity you’re a bit naive about how the system works.
“If not embracing newcomers is defined by not bulldozing the town to turn it into another Charlotte (where I lived and which, IMO, had 0 personality) then good on them.”
Sorry, but those newcomers need a place to live and that is going to result in some bulldozing. I’m always amazed at how the people who complain most about growth and people moving here are the same people who contributed to that growth by, well, moving here. I’ll never forget a conversation I had with a woman at a reception. She and her husband had retired here and she groused about how much growth had occurred in the time since they had moved here. She then went on to complain about how they really wanted their daughter to move here but she was unable to because of the job market and the cost of housing. Translation: It was OK for her and her family to move here, but not anyone else. The contradiction was astonishing.
“I bought outside of Buncombe Co because I was completely outgunned there but I’m okay with that because I am one of those evil almost retired dreamers.”
So you not only don’t live in Asheville you don’t live in Buncombe County and you still want to tell us how we should do it? sigh.
Pretty soon, Asheville will no longer be “Asheville.” It will be yet another city that’s mostly indistinguishable from any other. A mini-Charlotte, perhaps. More malls, chain restaurants, big-box stores, etc.
I hope I’m wrong, but I’ve seen it in many other cities and states in which I’ve lived. With that in mind, I agree with J.C. Tripp’s comments. If people want to move here, fine. But, let them find the place and make-up their own mind. Stop the overselling.
This seems to be the eternal struggle, when it comes to wanting to make a buck, regardless of the cost to others or the environment. It may be in corporate America (I see it in my company), cities like Asheville, or any other business.
I’m not against making money–even making a lot of money–but I think a business/person can make money and still be charitable and responsible. I am, however, against the “winner takes all” and “do whatever it takes” mentalities.
I think that has happened in every town that becomes best small town or coolest town or any other accolades like that. Then they get trampled to a shadow of what made them great or fun or cool. I would love for Asheville to avoid that but it almost seems predestined at this point. No matter where I go or who I talk to elsewhere, say “Asheville” and they get downright giddy. People love the place and so will probably ruin it. Everything is cyclical. History repeats. I guess, if there is no place to live, that will slow it down.
“…they get trampled to a shadow of what made them great or fun or cool.”
I couldn’t have said it any better, Cynthia.
Likewise, I also agree there’s likely no stopping it. But, as you noted, things are cyclical. At some point, once Asheville is no longer the same city that attracted people, many of the working-class folks may realize it’s costing them as much (or more) to live in this paradise lost.
I’m fortunate to earn a comfortable living, so I can probably ride-out any bubble. (Although, I hate spending more than I need.) I just wonder what will be left, once the music finally stops.
My plea that the City access Federal and State funds to build an apartment building to house homeless Veterans seems to have gone nowhere.
That’s because that is about the homeless and not about wealthy people wanting to retire here or buy a vacation home. I really wish that there was as much public clamoring for something like this as there is for another park downtown, but priorities I guess.
Dear Jaded Local,
After reading all your posts, I’ve concluded the following: You’re my kind of person.
Sincerely,
Navin
Thanks, Navin. Knowing there are others who think like I do makes me feel just a mite less Jaded!
Why do you thing asheville city schools are so amazing??? thank you tourists and retirees.
think!