There has been a lot of talk about affordable housing lately in Greenville. The U.S. Department of Housing and Urban Development (HUD) defines affordable housing as “housing for which the occupant(s) is/are paying no more than 30 percent of his or her income for gross housing costs, including utilities.”
According to Data USA, Greenville’s median household income in 2015 was $51,908. Greenvillians with that household income should be paying no more than 30% or $15,572 for gross housing costs and utilities per year. This breaks down to no more than $1,297.70 per month.
If you’re an individual working a minimum wage job at $7.25 per hour for 40 hours per week, you will earn $1,160 per month or $13,920 per year. In that case, those individuals would need to spend no more than $348 per month on gross housing costs per month in order to have affordable housing. In 2015, the average rent in Greenville County was $768 -over double of what a minimum wage worker could spend on housing.
It is no argument that affordable housing is difficult to attain for individuals working minimum wage jobs. Proponents of affordable housing argue that the local government should step in and offer support in the way of subsidies and zoning regulations. Most individuals recognize there is a need for affordable housing, but many may not consider the negative effects that zoning regulations may have on all individuals.
Mandating affordable housing can have negative impacts on homeowners, builders, and the community. If passed, the Inclusionary Zoning Act will allow counties and municipalities to “use inclusionary zoning strategies to increase the development of affordable housing for low and moderate income families and/or charge a fee to the builder/developer in lieu of the zoning.” How does it work exactly?
The Inclusionary Zoning Act would require homebuilders to construct a certain number of affordable homes in each new development. These homes would have to be priced at less than 80% of median market value. For example, if home prices in a new subdivision ranged from $180,000 to $220,000, then the median would be $200,000. So, a percentage of the homes in the subdivision would have to be less than 80% of $200,000, or less than $160,000.
As a realtor, I understand the importance of homeownership. I know that owning a home is a positive experience for a family and leads to happier lives and a more productive community. However, mandating inclusionary zoning for the purposes of affordable housing would negatively impact our community.
In a published Reason Institute policy study of 45 cities, “Housing Supply and Affordability: Do Affordable Housing Mandates Work,” the following was found after passing an inclusionary ordinance:
- New construction decreased by 31%
- Price of new homes increased by $22,000-$44,000
- The average city produced less than 15 affordable units per year
With a low supply of homes already, Greenville cannot afford for the costs of new construction to rise even higher than they already are. Many buyers are looking to build now because the inventory of homes is so reduced. If prices increase due to the Inclusionary Zoning Act being passed, this will create an even higher demand for resale homes. This, in turn, would likely lead to more buyers delaying the purchase of their first homes.
So, what is the solution? I definitely don’t have one. I think we all need to become more involved with our local governments in order to see how we may lend a helping hand in solving this affordable housing issue. Because as Helen Keller once said, “Alone we can do so little, together we can do so much.”