As prices for practically everything seem to increase on a regular basis, the recently adopted Wake Forest Housing Affordability Plan constitutes the blueprint for expanding housing opportunities to meet the growing demand created by Wake Forest’s continuous influx of new residents.
Approved by the Wake Forest Board of Commissioners in September, the 62-page plan is the culmination of a monumental yearlong effort by the Town and a broad range of local stakeholders in collaboration with HR&A Advisors.
"Wake Forest is one of the fastest-growing communities in the country in terms of jobs and population growth," said Brad West, Long Range Planning Manager for the Town.
"We need to get ahead of this national macroeconomic issue," he said, referring to the national housing shortage, caused in part by a slowdown in construction after the housing crash of 2008, followed by the pandemic, and exacerbated by supply chain issues.
"The more supply we build, the more we reduce demand pressure, competition, and prices in the housing market. The more options, the better."
Southern Exposure
As some 35,000 residents have moved to Wake Forest in the last 20 years, the population has increased by more than 253%, from approximately 15,000 in 2000 to more than 50,000 today. This growth has dramatically increased the demand and cost for both rental housing and homeownership.
West said the Town is committed to balanced growth in a way that maintains its character.
"Each jurisdiction is exploring the role it can play in partnership with non-profits and local agencies to move the needle forward in favor of those in the lower income brackets, not just a continuous cycle of building homes few can afford," he said.
"Our efforts have to be coordinated with other jurisdictions. It's all interconnected." In general, the more housing construction is restricted by regulations, the more prices increase.
"Our UDO (Unified Development Ordinance) strikes a balance between providing affordable homes, apartments, and quality of life," West said. "More people are coming here no matter what. They can either compete for homes at existing prices, or we can build more to increase options and spread out the demand."
Keeping up with the Joneses
Wake Forest residents who moved to town within the year 2019 earned a median income of $140,000, compared to $92,210 for existing households, a difference of nearly $50,000. This disparity creates challenges for existing residents competing with higher earners in the housing market.
In terms of housing inventory, some 65% of existing Wake Forest homes have been built since 2000. In Wake County, just 41% of the housing inventory was built during the same time. That figure is only 28% statewide.
Consequently, Wake Forest lacks a large inventory of older homes, which in many markets serves as a source of naturally occurring affordable housing. As a result, many looking to relocate to Wake Forest cannot afford it, while many current residents are at risk of being priced out of both the town and the region. In addition, more than 60% of new Wake Forest residents have moved to town since 2010, putting even greater pressure on the market to meet demand.
In response to these realities, the Housing Affordability Plan was created in order to "analyze local housing conditions, determine need, explore proven housing affordability strategies, and refine them into practical actions for the Town."
What is Affordable Housing?
The Department of Housing and Urban Development determines a home is affordable when its costs are less than 30% of a household’s gross income. HUD uses the area median income (AMI) for a family of four as the primary metric to determine affordability in regions across the country.
For Wake Forest, HUD uses the Raleigh Metropolitan Statistical Area’s AMI, which was $95,700 as of 2021. The median household income in Wake Forest is $92,210.
Population growth in the region has primarily been driven by households making more than $100,000 a year. In 2010, households earning between $50,000 and $74,999 were the most prevalent in Wake Forest. And while population growth has occurred among all income groups earning above $35,000, a full 64% of new growth has been in households earning more than $100,000.
At the end of 2021, no homes in Wake Forest were listed below $300,000.
The American Dream
While some 70% of Wake Forest households own their own homes, 6% higher than the national average overall, that percentage is declining across nearly all income groups.
In order to make the dream of home ownership a reality for more people, the Town’s plan has some good ideas: selling surplus public property or purchasing new property for the sole purpose of increasing affordable housing units; working with the local Housing Authority to redevelop older housing; rehabilitation of existing housing; and developer incentives for market-rate projects to include affordable housing.
“We’ve already begun to implement the Plan with our Housing Rehabilitation Program, offering up to $15,000 per household for critical life safety repairs,” West said. Five houses were recently saved in the Town’s Northeast Community in 2022.
The Missing Middle
By way of example and potential replication, West points to the historic Idlewild community in Raleigh. Sold to the Raleigh Area Land Trust for $1 in 2021 and built on two acres, the project will allow residents to own their homes while the land underneath stays in a trust, significantly reducing the cost of ownership.
Coined in 2010, a concept called Missing Middle Housing refers to a development with multiple units, including duplexes, triplexes, townhouses, and small apartments located in a walkable neighborhood. Prior to the summer of 2021, these types of developments were prohibited in many areas around Raleigh.
Now nearly every municipality in Wake County is signing on to build such communities, West said, one of many ideas the Town is considering to meet this ever-increasing demand. Others include the public housing redevelopment project on N. White Street and redevelopment projects on S. Brooks and Caddel streets.
"I applaud the Town’s Planning Department and Board of Commissioners - and everyone who had a hand in creating the Housing Affordability Plan," said Jason Cannon, President of the Wake Forest Business and Industry Partnership. "With good ideas, planning, and execution, we're continuing to evolve as a diverse and welcoming community in North Carolina’s thriving Research Triangle region.”
