Homework: Solving Asheville’s affordable housing crisis

It’s no secret: The shortage of affordable housing in the Asheville area is one of our community’s biggest problems.

Contributing factors include a growing population, the high demand for both apartments and houses, the particular challenges of building in the mountains and the low wages paid by many local employers.

Earlier this summer, Xpress decided to take a different tack in exploring the issue. We approached experts from various segments of the community to answer a deceptively simple question: “What would it take to solve the Asheville area’s affordable housing problem?”

We received 19 thoughtful essays from a range of community members, including developers, academics, nonprofit leaders, lenders and those personally affected by the crisis. Those pieces were published in a three-part series starting July 29. (See links to all the online essays at http://mountainx.com/?p=529918.)

Seeking yet another angle on the question, we’ve sifted through the essays — and the lively debate they generated in the form of online comments and letters to the editor — to recap the important points raised and the various solutions suggested.

Defining the problem

“Market forces that make Buncombe County such a highly desirable and sought-out place to visit and live have triggered a huge surge in housing costs, whether rentals or sales,” said David Gantt, chairman of the Buncombe County Board of Commissioners. “Making matters worse is a rental vacancy rate near zero. And meanwhile, the Great Recession left many future Buncombe County residents unable to sell their homes and move here, creating a pent-up demand for homes to buy.”

Developer Pat Whalen, president
 of Public Interest Projects Inc., zeroed in on one key aspect: “High demand (Asheville’s livability) + limited land and housing supply = expensive housing. Why is the supply limited? Buildable land is scarce and expensive.”

And Lew Kraus, executive director
of Asheville Area Habitat for Humanity, added: “We live in an area that thrives on tourism, health care and manufacturing. But with a huge discrepancy between high housing costs and low wages, many people have been priced out of the housing market.”

Effects of the crisis

Several essayists described how the effects of the housing crisis have rippled through the whole fabric of the community.

“While Asheville becomes known as a magical place to live, those of us who are working-class pay the price of that fame,” Emma resident Mirian Porras told essayist/neighbor Andrea Golden. “When landlords sit down to talk about raising rents because more people want to move to Emma, they’re not thinking about the miserable wages that we earn that barely allow our families to eat. We need regulations on how rents are raised. How much more money can they take from us if we have nothing left?”

That thought was echoed by Chantelle, who commented on Xpress’ website: “Someone should look into the apartment complexes that are hiking rates by $75-$150 per month for long-term residents, decreasing maintenance activity and overall lowering acceptable tenant standards. This does not support Asheville’s movement toward more affordable or safe housing.”

And over at Pisgah Legal Services, Robin Merrell and the nonprofit’s Housing Team noted, “We talk to thousands of people every year who pay too much for rent, live too far from work and/or live in substandard conditions.”

The affordable housing crisis makes it even harder for homeless folks to find permanent residences, observed Brian K. Alexander, executive director of Homeward Bound of WNC, which works in Buncombe and Henderson counties. “Every day, our case managers work to find safe, affordable places for our clients to live,” Alexander wrote. “Now, however, we simply cannot find those homes. This situation puts the lives of some of our community’s most vulnerable members at risk. Living on the streets for long periods of time exacerbates chronic behavioral and physical health issues that often lead to premature death.”

The problem also affects those who receive housing assistance, said Vicki Meath, executive director
of Just Economics, a nonprofit working to establish a living wage. “We need to understand the transition from what was once public housing to Section 8 vouchers, and that many people with those vouchers have no place to use them, due to the overall lack of affordable housing.”

And UNC Asheville political science professor
 Dwight B. Mullen
 drew attention to how the crisis has affected the city’s African-American residents: “Data indicate that the black population is in decline even as the city’s overall population increases dramatically. … African-Americans in their 20s and 30s are choosing to leave the area for places that seem more hospitable and satisfying. …

“Poor pay and job opportunities are major components that contribute to self-exile. Young white people also face these factors, but black earnings, on average, are significantly lower than whites’. Black family income that averages just over $32,000 a year will not qualify for homeownership in Asheville. Why stay where you can’t live?”

Solution: Provide more capital

Suggestions on how to solve the affordable housing crisis ran the gamut, from streamlining development to ramping up housing cooperatives. Here’s a breakdown, starting with the availability of capital.

“We cannot view this as a problem that the market alone can solve,” wrote Jane Hatley, the Self-Help Credit Union’s WNC regional director. “Fortunately, Asheville has high-performing nonprofit developers who, with appropriate subsidies, can build, preserve and maintain homes. One strategy might be for more lenders to follow the lead of wonderful organizations like Mountain Housing Opportunities and think more in terms of the social impact involved, i.e., accepting more risk in order to make more housing happen.”

Several essayists suggested increasing the city’s Affordable Housing Trust Fund. Lindsey Simerly, chair of the Affordable Housing Advisory Committee, wrote: “Increasing the annual allocation to our Affordable Housing Trust Fund will further drive development of high-quality units. The fund subsidized the Larchmont and Glen Rock projects, providing attractive, permanently affordable rental units in North Asheville and the River Arts District.”

Merrell of Pisgah Legal Services suggested establishing a similar county fund and allocating some of the room-occupancy tax revenue for affordable housing. (On Sept. 1, the Buncombe County Board of Commissioners approved an increase in the tax on a 4-3 vote, but the proceeds will continue to be used to promote tourism and tourism-related projects.)

Solution: Increase density

Several essayists advocated increasing the density, including Whalen of Public Interest Projects, who wrote: “One solution (certainly not the only one) would be to actively encourage more density in the city’s center, where people might actually be able to walk to work or, from the central bus station, catch just one bus to get to work. Imagine the effect on density and affordable living if our zoning encouraged affordable and middle-income, workforce, multifamily housing within a half-mile (or even 1 mile) radius of downtown.”

Similarly, Merrell said, “Significantly increase density in zoning districts: When a developer can build more units per acre, the units cost less.”

Downtown developer Harry Pilos agreed, saying, “Increase allowable density: more apartments, less land.”

On the Xpress’ website, however, “Jaded Local” questioned whether increased density would really help: “There may be compelling arguments in its favor, but given that downtown is the densest part of Asheville and has the most expensive housing in town, affordability is not one of them. Flooding the city, as developers have been doing in recent years, with $800,000 houses and condos has been adding to the pool but just gives those who can afford an $800,000 house or condo more choices and does nothing for those who can only afford a $100,000 house or condo.”

“Generating tax money is a good case for density,” this writer continued. “But as downtown shows, density does not translate into affordability.”

Another online commenter, Leicester resident Alan Ditmore, blamed the problem on the city’s unified development ordinance, writing: “It’s simple. The crisis is one of total housing supply — not enough units — and it is caused by the UDO with its single-family zoning, unit density limits, residential height limits, setbacks and parking requirements. Reversing the crisis will require the total defeat of all neighborhood activists.”

Solution: Expand transportation options

In an Aug. 26 letter to the editor, Asheville City Council member Cecil Bothwell addressed the role that transportation plays in the issue. “Develop countywide transit, with park-and-ride lots on major corridors and late-night collector routes for food-service employees who work past midnight,” he wrote. “This would make transportation more affordable, which translates into making housing at the city margins even more affordable, and it would relieve parking pressure downtown.”

But fellow City Council member Gordon Smith disagreed. “Socio-economic diversity makes Asheville strong, and pushing lower-income people to the margins is antithetical to that,” he asserted on the Xpress website. “Improving transit is a good idea. Each bus costs about $500,000; each route costs about $900,000 per year. Paying for transit service is and has been an enormous challenge, and the best we’ve managed to do is expand to Sunday service on limited routes and make our existing routes more efficient and effective.”

Bothwell countered: “City policy cannot choose ‘a policy that relegates working people to the margins’ — it is economic reality. City policy cannot possibly defeat the market. … We have made a little progress, but the fact that Asheville rents are broadly unaffordable for workers after 10 years of effort that’s called the best in N.C. might suggest to a reasonable person that the effort is failing.”

Solution: Create inclusionary policies

Several writers backed the idea of requiring developers to include a certain amount of affordable housing in new projects.

“We strongly encourage including a certain percentage of affordable houses or apartments in every project,” wrote Barber Melton, a member of Asheville’s Affordable Housing Advisory Committee who also serves as vice president of the Coalition of Asheville Neighborhoods.

And committee chair Simerly added: “Mandating that housing be inclusionary is a strategy that’s working across the state and nation. This policy requires every new development to include a percentage of affordable housing. An added benefit: Inclusionary zoning strengthens neighborhood resiliency and builds community across income levels.”

Meath of Just Economics, meanwhile, wrote, “It may be time for Asheville, regardless of the legal threats, to push the envelope on mandatory inclusionary zoning, which is used in 44 other states.”

Solution: Pay a living wage

Meath also strongly argued for boosting local wages: “The business community and elected officials need to understand the impact that low wages, underfunded public transit and nonexistent affordable housing have on workforce availability,” she wrote. “Just Economics’ living wage (currently $12.50 per hour, or $11 per hour with employer-provided health insurance) is the bare minimum of what it takes for a single individual to afford a one-bedroom apartment in the county. It’s a better starting place, not an end goal.

“And meanwhile, a high percentage of downtown workers aren’t making even this bare minimum wage, lack full-time work or have dependents,” continued Meath. “So what happens to Asheville when there’s nowhere near the city that workers can afford to live? We need the business community to embrace a living wage and support infrastructure investments for the workforce.”

Fellow essayist Shannon Kauffman, a Habitat for Humanity homeowner, also sounded the alarm about wages: “We must address the housing crisis now, before it’s too late. I believe this can be done by requiring employers to pay their employees a living wage — which, like affordable housing, is also an endangered species here. I also believe in limiting rent increases to an acceptable percentage, so that a lease renewal doesn’t result in a 20 percent increase for the renter. Moreover, developers and other for-profits must be required to give back to the community by supporting nonprofit agencies like Asheville Habitat that promote affordable housing.”

Solution: Support economic development

Other contributors to the dialogue pushed for attracting employers that pay higher wages.

“Aggressively recruit employers that can provide adequate wages,” offered Pilos. “The educational system,” he added, “is a major factor: The better-educated the population, the more attractive the community is to ‘good’ employers. Residents deserve economic and educational opportunities that enable them to earn enough money that they don’t need low-income housing.”

And Donna Cottrell of the county’s Planning and Development Department noted, “Continuing to incentivize local job opportunities for our community while supporting affordable and workforce housing initiatives can help address Buncombe County’s affordable housing problem.”

At the same time, Cindy Visnich Weeks, vice president and director of community investments at Mountain Housing Opportunities — the largest producer of affordable housing west of Charlotte — questioned the effectiveness of those incentives.

“Let’s take a hard look at the past five years and ask: How many jobs did we create?” urged Weeks. “What will each of these jobs pay? How much did we pay the corporations bringing the jobs, and therefore, how much was paid to subsidize each one? How many of those jobs won’t pay enough to allow the worker to afford a modest apartment or home? How many workforce homes did we create in that same five-year period? How much funding did we use to incentivize the construction of true workforce housing?”

In response, Paul Szurek, a board member and former chair of The Economic Development Coalition for Asheville-Buncombe County, commented: “All the jobs recruited by the Economic Development Coalition, and all those for which the city and county have provided incentives, pay substantially more than a living wage. These are basically high-productivity, advanced manufacturing jobs, with a lot of responsibility for machines and materials. In addition, the incentives are performance-based (i.e., no jobs, no capital investment, no incentive earned) and pay for themselves over time via additional tax base that would otherwise not be here.”

Solution: Make affordable development easier

Other essayists suggested ways to streamline development.

Merrell, for instance, wrote: “Incentivize affordable housing development and make it easy for developers to build it. Instead of creating complicated regulations, simplify them. … Waive all fees for affordable housing development; increase fees for market-rate development.”

And Pilos proposed these steps: “Modify zoning regulations to allow multifamily development in more locations. … Revamp the city’s housing incentives into packages that are meaningful to the multifamily industry. … Lower MSD’s impact fee. … Provide incentives to repurpose existing housing units.”

Solution: Think outside the box

Still others called for less mainstream solutions.

Boone Guyton, co-owner of Cady and Guyton Construction, noted: “One new free-market approach is ‘tiny houses,’ which can cost less than the down payment on the average home. A few Asheville companies are building them, though local building codes are problematic. A tiny house is a good fit for an owner /builder, as it’s a more manageable project for working people. I think a somewhat bigger version — a low-cost, 600-square-foot home that’s designed to be expandable — would be worth pursuing.”

Heath Moody of A-B Tech’s Construction Management, Building Science and Sustainability Technologies Department wrote: “One very promising approach is to partner with community colleges, high schools and four-year colleges on programs that are looking for hands-on projects for job-training purposes. … Such partnerships may not produce enough homes to meet all the needs, but they can cut labor costs while giving students real-world training.”

Meanwhile, Hatley of the Self-Help Credit Union cited housing cooperatives and a project in the Netherlands that pairs students with the elderly as possible models for Asheville.

And Golden described grassroots efforts in the Emma community, just outside Asheville, to create community land trusts and mobile home cooperatives: “My family lives in Dulce Lomita, a mobile home cooperative created to show residents how they can purchase parks that might otherwise be bought by developers, leading to permanent loss of affordable housing.”

The challenge, wrote Golden, is expanding those efforts to serve more people: “We need the support of local housing-and-development institutions, as well as local governments, to give us the resources and legislation needed to bring models such as these up to scale. Only then will we be able to ensure housing equity and self-determination for all our communities.”

Jeff Staudinger, the city of Asheville’s assistant director of community and economic development, described City Council’s efforts to address the affordable housing crisis but added this caveat: “Current financing and regulatory tools alone cannot produce enough new affordable housing to meet the need. To achieve that, we’ll need to support our existing housing partners, find new partners in both the public and private sectors, implement new policies and embrace new tools.”

Solution: Enlist the whole community

Amid a diverse array of possible approaches, affordable housing advocates stressed the importance of community involvement in solving the problem.

Greg Borom, director of advocacy for Children First/Communities in Schools of Buncombe County, wrote: “Safe, affordable housing is a step toward opportunity and success but not the final destination. It’ll take accessory units, manufactured homes, cooperatives, land banks, increased density, small homes and apartments to address the lack of supply. But turning a physical structure into a home also requires access to schools, jobs, transit, parks, food and a community fabric that builds resiliency and interconnection.”

And Meath of Just Economics noted: “Basically, it’s going to take all hands on deck to change this dangerous trajectory of unaffordability and extreme gentrification. As an entire community, we need to be informed about the issues, be cognizant of the big picture, roll up our sleeves and get to work.”