A housing conundrumBusiness leaders told prices have outstripped ability of many to buy homes near workplace By Katy Stech (Contact)
The Post and Courier
Wednesday, September 19, 2007
Brad Nettles Pictured is a house constructed in the Silver Hill community of the Charleston Neck area by the Lowcountry Housing Trust. Help availableThe Lowcountry Housing Trust announced Tuesday that it secured $325,000 for developers to use in building affordable housing projects in Charleston County. Builders who are interested in applying for some of the funds must attend a pre-application workshop Oct. 2 at 10 a.m. in the auditorium at Felix C. Davis Community Center, 4800 Park Circle, North Charleston. For more information, go to lowcountryhousingtrust.org. Business leaders told prices have outstripped ability of many to buy homes near workplace While thousands of homes are for sale in the Charleston region, fewer people can afford to buy them because their wages are not keeping pace with prices. That's the message from the Charleston Metro Chamber of Commerce's Developers Council to more than 100 local business leaders who attended a housing conference and growth forum Tuesday in downtown Charleston. Workers who earn a median income, many of whom work in retail, service and tourism sectors, would find it very difficult now to get a loan to buy in the neighborhoods where they live, according to a chamber study. Rising land costs and an influx of cash-flush newcomers who have sold homes in higher-priced areas, coupled with the recent housing boom, have pushed Charleston home prices to record levels. As a result, some employers are increasingly worried about whether their lower-wage workers can buy homes near their jobs, said Tammie Hoy, executive director for the Lowcountry Housing Trust. Also, the demand for affordable housing has soared, said Hoy, whose group is seeking ways to keep homes affordable for rank-and-file employees. At the conference, she and others called for a partnership between businesses and government leaders to look for ways to solve the affordable housing crunch. "Ten years ago, this was a relatively affordable market," Hoy said. But the market has changed dramatically since then, as more people have moved to the area. "Charleston has become a desirable place to live," she said. The rising prices of homes over the last seven years has been dramatic. In 2000, about half of Charleston homes sold for less than $140,000, according to the Charleston Trident Association of Realtors. Last year, only 17 percent of homes changed hands in that price range. In areas like Ladson, Goose Creek and Summerville, the median home price is higher than what people who make the median wage in those municipalities can afford, according to U.S. Census data and the chamber's Center for Business Research. Just six years ago, the median income levels in those areas were enough to purchase a median-price home. "We know that housing prices continue to outpace the median incomes in the area, and the trend appears to be getting worse, not better," said Mary Graham, the chamber's senior vice president of public policy. Overall, homes in Charleston are considered less affordable than in Atlanta, Charlotte and Columbia, according the National Association of Home Builders. Some of the statistics released Tuesday are part of an unfinished study from the chamber and the Lowcountry Housing Trust. The final study, including recommendations for improvements, will be released in October. The report compares the median sale price of homes in specific areas — half being more expensive, and half being less expensive — and the median income levels in those areas. Despite the fact that at least 13 local ZIP codes are now ranked as "unaffordable," people who earn higher incomes or buy lower than median priced homes can still afford to purchase in this market, Graham said. She said researchers are sorting data by ZIP code to dispel a "myth" that increases in median home prices are being driven primarily by sales in Charleston's luxury market. The national housing slump has pushed prices down slightly in recent months as sellers compete with their neighbors for a smaller pool of buyers. Also, lenders have tightened their mortgage standards, limiting the number of people who qualify for a loan. Local real estate agents say savvy buyers can find good deals in this market, but they added that many of the deepest price cuts are being offered in new communities that national home builders are developing in the outskirts of the region. For many lower-income employees, the distance between their homes to their jobs can be costly. When a worker's commute exceeds 15 miles one way, transportation costs are about the same as housing costs, said Maya Brennan, a research associate for the Washington, D.C.-based Center for Housing Policy. Also, longer work commutes can lead to lower worker productivity, more missed workdays and work schedules that are based on traffic conditions, not the work agenda itself, said Greg Roth, senior manager for the U.S. Chamber of Commerce's Institute for Competitive Workforce. Brennan, Roth and Amy Liu of the Brookings Institute, a Washington-based think tank, discussed how other communities across the country have developed "workforce housing" programs. Though they said there's no "magic bullet" to solving the affordability issue, they offered a few creative suggestions for how to overcome it: --Developers can focus on "in-fill" projects by rehabilitating neglected property close to major employers or public transportation arteries. --State lawmakers can expand on the federal government's earned income tax credit program, which gives money directly to people who file taxes in the lowest income brackets. --Local elected officials can change zoning regulations to discourage developers from building homes on larger lots. While the idea of decreasing density is meant to lessen the impact on infrastructure like roads and sewer lines, it also pushes up home prices as builders recover their land costs. Liu said one of the keys to creating effective workforce housing policies is through partnerships among residents, elected officials and business leaders. In other states, like California and Florida, the partnerships have led to better housing options for low-income earners, she said. "In a lot of places, it is the business community that sets this as a priority," she said. Reach Katy Stech at 937-5549 or kstech@postandcourier.com. |
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Comments
This article has 9 comment(s)
Posted by charleston on September 19, 2007 at 2:10 a.m. (Suggest removal)
So, 13 zip codes are unaffordable in the tricounty area. What are the zip codes that are affordable? I have all ideas that North Charleston may have a zip code or two that are considered affordable. These zip codes are probably 15 minutes or less from major area employers as well. It is after all the hub of the region.
Posted by gamecockcougar on September 19, 2007 at 6:50 a.m. (Suggest removal)
Yeah but North Charleston was voted the 7th most dangerous city in the nation, I guess that is food for thought when you want to start a family.
Posted by charleston on September 19, 2007 at 7:32 a.m. (Suggest removal)
Actually, gamecockcougar, the web source I referenced indicates that North Charleston is rated #20 right behind #19 Washington D.C. All the same, your point is one that is shared by many and causes the whole of North Charleston to be somewhat of a blackhole when it comes to property values. I guess life has its tradeoffs.
Posted by trm2105 on September 19, 2007 at 7:39 a.m. (Suggest removal)
How on earth will $325,000 make a difference?! New shiny doorknobs for all the poor and the new "affordable" class of the lowcountry.
Posted by icbmman on September 19, 2007 at 9:52 a.m. (Suggest removal)
Several things need to occur to help this housing problem:
1. Charleston needs to start building affordable highrises in the upper peninsula and the Neck. To create affordable housing, ALL other major cities have done this...hmmm, maybe that's why Chas is more expensive than Atlanta and Charlotte? Bottomline, develop taller housing projects that many middle-class people can afford. The prices would drop.
2. The cities of Chas and N. Chas should merge. Elect a new mayor, and consolidate the fire and police departments. This would help standardize and modernize the fire departments and improve police protection. Under the same city, property values would decrease, but with eventual improvement, they'll come back.
3. Build a monobeam/rail transit line from the Visitor's Center downtown, making stops at the Neck, the coliseum/convention center, the airport, Citadel and Northwoods malls, Summerville, and Goose Creek. You'll find that developers will start building affordable houses near these areas, keeping prices at a suitable median.
Posted by whycantitbebetterhere on September 19, 2007 at 11:01 a.m. (Suggest removal)
I make a very good salary, as does my husband, and we live in an older part of North Charleston, and paid $100K less for our great house (with a huge yard and beautiful old trees) than we would have spend in WA or Mt. P. We know the schools aren't great, but private school was probably the choice anyway. I continue to be offended by people that think I am a redneck for living there, they don't know that I do when they start to run North Charleston down (I guess I don't look like their stereotypical "crack dealer"). We both have 10 minute commutes to work, have older neighbors that are home all day watching the neighborhood (we love them to death). I say take an older home and rehab it in North Charleston, and 10 years from now, you might just look like a genius. Either way, you could probably sell it and make money, as homes are cheaper there and so overpriced everywhere else. You won't spend most of your life sitting in traffic either...
Posted by welltravelled on September 19, 2007 at 1:15 p.m. (Suggest removal)
Why doesn’t anyone ever talk about the other half of this issue? The poor wages that employers pay in this area. Everyone focuses on the cost of housing, but if people were paid wages that are in line with the cost of living, then affordable housing would be less of an issue. I have worked and lived in Los Angeles, New York City, and Charlotte. In all three places, my standard of living was far better than anything I have achieved here because I was paid not only for my experience and education, but also a wage in line with the area’s cost of living.
Unfortunately, there seems to be a pervasive attitude among employers that the “privilege” of living here should make up for the sub-standard wages paid by them. And, sadly, many workers also seem to buy into that and believe that $22,000/year is a good wage.
And it’s not simply the service and tourism industries. I came here to help with a sick family member and spent three years working for one of the supposed best employers (and best paying) in Charleston. When I went to work for this high-tech employer, I took a 50% cut from my previous job in LA (and I had to negotiate for that). But believe me, my living expenses were not cut by 50%. After three years, I was still making $5,000 less than my STARTING salary in LA. Though I was reluctant to leave my family, I finally gave up and returned to the Northeast and more than doubled my salary and lived comfortably.
Until the employers in this area decide to pay a wage in line with the cost of living, the quality of life for most residents will continue to deteriorate as they are forced to live further out and contend with long, stressful commutes.
So when will the Chamber do a study about wages and when will the local media cover this angle of the story?
Posted by icbmman on September 19, 2007 at 2:22 p.m. (Suggest removal)
Welltravelled, the problem with wages is this state. This state does not attract large amounts of businesses and corporations because of its backwards approach to wages. I'm referring specifically to the state income tax. States that have abolished this tax have grown exponentially in the past 2 decades, particularly Texas and Florida. Included with that tax is the insane car registration tax that SC residents get hit with every year. For an SUV, I can register in FL for $35 a year, but in SC, the fee is $300-400...and the average salary in SC is LESS than FL!!!
You can't really compare California wages with Charleston, because the cost of living is much higher out there. However, corporations will look over SC and Chas particularly because of the taxes and lack of infrastructure. Couple those with the arrogant, snobby attitudes of some natives who don't want new development or growth, and the metro area will continue to struggle in making itself a better wage-earning community.
Posted by Native_Ink on September 20, 2007 at 7:17 a.m. (Suggest removal)
Let's not forget our woeful educational system as a culprit in all of this. It's not just older, wealthier people moving here and driving up housing prices; it's also young, well-educated people who are head-hunted to manage many of the new businesses here, especially in the manufacturing sector. How many public schools around here turn out people who can compete for these jobs? For the most part, new business in South Carolina revolves around the same thing old business did: cheap, uneducated labor. That's what South Carolina offers to the corporations we're so "proud" to have lured here.
It's no surprise that the average Charlestonian is not equiped to deal with the challenges of a new economy. It's also a deep shame for those in power. Or perhaps it's not. Maybe to them, it's just the South Carolina way of doing things.