As the economy roars forward with lower tax rates following a seven-year period of stagnant, near zero interest rates, those with unequal access to economic opportunity are left behind.

Thousands of individuals and families across the state lack the basic foundation of a home to return to every night, sheltering them from bolstering their economic standing.

Politicians and policy makers in North Carolina have reacted to the need for an increase in affordable housing across the state. However, there has yet to be a widespread take-up from businesses – the very ones employing these individuals on a daily basis.

Thomas Stith, former chief of staff to North Carolina Gov. Pat McCrory, sees the benefits from affordable housing extend to not only the individuals in need but the communities and businesses where they reside and work.

“Affordable housing is a broader solution,” said Stith. “It’s one of those foundational pieces that affects not only the economy but it affects the health and welfare of those individuals along with the educational system.”

Affordable housing’s importance

With over 331,000 North Carolina households paying more than 50 percent of their income toward rent, according to data provided by the Center on Budget and Policy Priorities, the need for affordable housing is rising to the forefront of policy discussions.

The need for a home spans the need of the individual to the need of businesses to the needs of communities. It is a foundational necessity for citizens across the state who lack the means to rent or purchase property in their areas.

Affordable housing fulfills one of the basic physiological needs of an individual: shelter.

Stith described it as a fundamental piece in creating a healthy environment for the local communities.

“Affordable housing serves to create healthy communities by providing access spaces for individuals in all income ranges and socioeconomic status,” explained Stith.

When individuals have the means to live in homes within their communities it benefits their health, families and mental states. Affordable housing allows families to use their discretionary income on items such as health care and food.

From a personal health standpoint, affordable health reduces stress and the chance for infectious disease. Children receive better nutrition and access to stable education.

It enables individuals to cement their foothold in the community, which can have broad economic implications for the communities where they reside.

Cities with affordable housing can more easily attract employees, which can prove pivotal to bringing businesses into cities that have large supplies of employees.

Nancy Oates, a member of Chapel Hill’s town council, spoke to the importance that affordable housing has for businesses.

“Businesses have to be able to attract workers to the kind of jobs they can’t afford to pay high wages for,” said Oates. “Cities need to make room for those people who are holding those low-wage jobs.”

Oates mentioned a specific case surrounding bus drivers that has come to light following the tightening labor market and the lack of local affordable housing in the area. Cities are having difficulty hiring bus drivers.

Bus drivers work on a split shift. They start the day with four hours in the morning, before taking a midday break and finishing the day with a four-hour shift. Individuals aren’t living near the cities where the bus drivers are needed, so they can’t go home during the midday break.

Cities who hire bus drivers are having difficulty finding individuals to work these split shifts as people are turning to run-of-the-mill eight-hour jobs in their local towns.

Businesses are more prone to reside in communities with a thriving workforce. Communities with affordable housing tend to be more diverse, which can increase decision making in businesses by 60 percent and innovation by 83 percent, according to a study by Deloitte.

NC’s current standing

North Carolina, which currently supports 40 percent of households in need of housing, is looking to improve its efforts directed toward affordable housing.

A brief look at the state shows the predictable outcome of a cost analysis of home ownership and rental costs in the state. The areas with the highest home ownership and rental costs are centered around North Carolina’s major cities: Charlotte, Greensboro, the Triangle, and Asheville.

The booming housing market across the state has played an important role in pushing those with low incomes out of market rate housing. Home prices have been continually trending upwards at rates above inflation levels.

When looking at a cross section of incomes across the state, the lower income communities tend to be located in rural areas and scattered around urban city centers. The location of poor communities around the city centers could be representative of the areas where low-income individuals that work for individuals or businesses in those cities reside in.

The three most populated cities, Charlotte, Raleigh, and Greensboro, are surrounded by at least one ZIP code of the lowest income bracket.

The individuals living in the ZIP codes around the city centers tend to be spending a large fraction of their income on rent and home ownership. The low-income individuals and families are hurt by high home prices in and around city centers, yet must live near the cities to find work.

Traditionally, individuals spending more than 30 percent of their income toward housing is viewed as a housing affordability issue in the area.

As North Carolina advances economically, it will need to focus on providing affordable housing to the individuals who lack the means to pay for a rental property or home in their area.

Political initiatives

The state government along with local municipalities in North Carolina have pushed for various affordable housing initiatives since the turn of the century that have sought to provide low income individuals with access to housing.

The federal government’s 2017 tax reform created opportunity zones across the nation. The zones provide tax benefits for private investment in low-income areas.

The state of North Carolina has 252 opportunity zones, 155 of which are located in urban areas and 97 in rural areas, according to UNC-Chapel Hill’s School of Government.

“I see these zones as an opportunity for states throughout the country to attract private investment in towns that wouldn’t receive it,” said Stith. “Affordable housing will be a part of development in areas where you traditionally wouldn’t have seen it because the private sector is incentivized to invest into those areas.”

Stith, a key player in the implementation of these zones in North Carolina, noted that the challenge to these new zones will be to combat gentrification in low-income areas. Gentrification could serve as a force to displace those in underserved regions.

As the private sector moves into these designated regions, Stith emphasized the need for a balance between the development of market rate and affordable housing.

On a local level, municipalities are implementing their own programs to supplement statewide initiatives. Members on Chapel Hill’s town council explained the initiatives in place by the Triangle-based college town.

In 2010, the town implemented the inclusionary zoning ordinance to require developers to allocate at least 15 percent of for-sale units to affordable housing.

In 2015, the college town established the Affordable Housing Development Reserve to dedicate specific funds out of its budget toward the construction and preservation of affordable housing in the town. The typical applicants to this fund include the affordable housing providers Habitat for Humanity, EmPOWERment Inc., and Casa.

The town council recently placed a $10 million bond on the ballet in the November elections that will supplement additional affordable housing initiatives. 72.6 percent of Chapel Hill voters voted in favor of the referendum.

“We’re creating spaces for individuals with moderate to low-income by continuing to make affordable housing a priority,” said Allen Buansi, a member on Chapel Hill’s town council. “I’m confident that it will be a top priority for a long time.”

Moving Forward

The effects of the current affordable housing initiatives will be analyzed for years to come. The balance between public and private investment in underserved regions across the state and the onset of gentrification will be a key policy topic for public officials.

North Carolina remains a state that lacks the ability to fill the needs of low-income individuals. North Carolina, along with every other state in the nation, cannot boast a single county that fills the housing needs of every individual its population, according to data provided by the Monroe Group.

As the world becomes a more and more globalized place, affordable housing initiatives will look to provide the underserved with places to form their foundation. Buansi emphasized the importance of affordable housing that dates back to a famous 1963 speech.

“Affordable housing means we are striving toward equality for everyone, by ensuring we have folks in our community who are not just from one class or from one race,” said Buansi. “We are living out the dream that Dr. King set out for us, which was to have a place where everyone is equal, treated with dignity, and has the same shot to advance themselves and their family.”