Housing needs update buncombe county north carolina

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Housing Needs Update Buncombe County, North Carolina

Prepared For

City of Asheville Community and Economic Development Department 70 Court Plaza, 5th Floor Asheville, North Carolina 28802

Effective Date

August 26, 2019 Revised: September 17, 2019

Job Reference Number

19-346 (Patrick Bowen)

155 E. Columbus Street, Suite 220 Pickerington, Ohio 43147 Phone: (614) 833-9300

September 17, 2019

Mr. Paul D'Angelo City of Asheville Community and Economic Development Department 70 Court Plaza, 5th Floor Asheville, North Carolina 28802

Re: Buncombe County, North Carolina Housing Needs Update (Final Draft)

Dear Mr. D'Angelo:

Bowen National Research is pleased to provide you with the final draft of the Housing Needs report of Buncombe County, North Carolina that we completed on your behalf. This draft is a reduced scope from the original regional housing study we completed in 2014 and incorporates revisions to our August 26, 2019 draft that you requested. This includes an Executive Summary that you asked to be added.

This update includes key demographic characteristics and trends (including projections through 2023), a telephone survey of over 100 multifamily apartments, a sample survey of more than 100 non-conventional and vacation rentals, nine years of for-sale housing activity and an inventory of the available for-sale housing stock, identification of housing product in the development pipeline (under construction and planned), and housing gap estimates for rental and for-sale housing at various affordability levels.

We provided several comparisons of the housing market conditions of 2014 with the latest 2019 housing supply that illustrate key changes in both the rental and for-sale housing markets that we believe you will find interesting. We did not include any of the raw data collected and used in this analysis, but we can provide such data upon request.

We have enjoyed working on this project.

Respectfully,

Patrick M. Bowen

Enc:

Bowen National Research 155 E. Columbus Street, Suite 220

Pickerington, Ohio 43147 (614) 833-9300

EXECUTIVE SUMMARY

The purpose of this report is to assess the Buncombe County housing market through an

evaluation of key demographic characteristics and trends along with an inventory and

analysis of the most

common

housing

alternatives offered in the

county. Additionally, we

compare key metrics

from our 2014 analysis

of the area with the most

current data to illustrate

changes and trends in the

market. We conclude the

report by conducting a

housing gap analysis for

rental and for-sale

housing at various

affordability levels. This

Executive Summary

considers key findings

from our analysis.

Demographics

Overall Population and Household Demographic Trends have been Positive Since 2010 and are Projected to Experience Notable Growth through at Least 2023 - Buncombe County experienced significant overall population and household growth rates between 2010 and 2018, outpacing both the Asheville MSA and the state of North Carolina. Between 2018 and 2023, it is projected that the Buncombe County population will increase by 17,899 (6.7%) and the number of households will increase by 7,145 (6.4%). This rapid growth will continue to contribute to the ongoing demand for housing for the foreseeable future.

Executive Summary- 1

Senior Households (Ages 65 and Older) are Projected to Experience the Greatest Growth in the County between 2018 and 2023 - While all household age segments are projected to grow between 2018 and 2023, it is expected that most of the growth will be among households with ages 65 to 74 and ages 75 and older. While this growth is primarily attributed to households aging in place, these projected growth trends indicate a likely growing need for senior-oriented housing within the county. However, with growth also expected among all age groups, the market demand for a variety of housing product types and designs will exist. While the Majority of Area Renter Households Earn Less Than $40,000 Annually and the Majority of Homeowner Households Earn $60,000 or More Annually, Most Growth through 2023 will Occur Among Moderate- to High-Income Households ? In 2018, over half (56.4%) of renter households in Buncombe County had annual income below $40,000, while over half (51.9%) of owner-occupied households had income of $60,000 or greater. New renter household growth is projected to be among both moderate- (earning between $30,000 and $59,999) and high- (earning $60,000 and higher) income households between 2018 and 2023. During this same time period, owner household growth in the county will primarily be among homeowners with incomes of $50,000 and higher, though some notable growth will occur among homeowners earning below $20,000 a year.

Executive Summary- 2

Substandard Housing Conditions and Households in Cost Burdened Housing Situations Remain a Significant Challenge Among Area Households - In Buncombe County, 2,718 (7.1%) renter households and 817 (1.2%) owner households are experiencing overcrowded housing situations. A total of 17,643 (46.1%) renter households are cost burdened (paying over 30% of their income towards housing costs) and 7,439 (19.4%) are severe cost burdened (paying over 50% of their income towards housing costs). As such, more than 3,500 households live in substandard housing conditions and nearly 18,000 renter households are paying disproportionately high shares of income towards their housing costs. These characteristics stress the importance of both affordability and quality/modernization of the local housing stock.

Multifamily Rental Housing Supply

While the Area's Overall Occupancy Rate (95.3%) for Multifamily Rental Housing Stock has Declined Since 2014 (99.2%), Most Affordable Rental Properties Remain Full with Long Wait Lists - The 122 surveyed multifamily rental properties have a combined occupancy rate of 95.3%, down from the 99.2% occupancy rate from December of 2014. This is considered a healthy occupancy rate and indicates the overall market has a good balance of occupied and vacant units. Currently, a total of 719 vacant units were identified in the county. This is a significant increase from the 99 vacant units that were identified in late 2014. It appears the influx of new multifamily apartments has put the overall market into a better balance at this time. However, there remains limited availability for lower income households seeking affordable rental housing.

Surveyed Multifamily Apartments ? July 2019

Projects

Total

Vacant

Project Type

Surveyed

Units

Units

Market-rate

70

10,348

616

Market-rate/Tax Credit

8

1,687

99

Market-rate/Government-Subsidized

1

123

0

Tax Credit

24

1,087

2

Tax Credit/Government-Subsidized

7

511

0

Government-Subsidized

12

1,392

2

Total

122

15,148

719

Occupancy Rate 94.0% 94.1%

100.0% 99.8% 100.0% 99.9% 95.3%

December 2014 Occupancy Rate 98.8% 100.0% 100.0% 100.0% 100.0% 100.0% 99.2%

Executive Summary- 3

The Introduction of New Rental Product Over the Past Few Years has not

Limited Rent Increases, as both Market-rate and Tax Credit Annual Rent

Growth has Averaged Around 5.0% Since 2014 - While the market-rate rental

vacancy rate has increased from 1.2% in 2014 to 6.0% in 2019 due to the

introduction

of

thousands of new

market-rate units, the

overall median market-

rate rent has increased at

a relatively rapid rate of

5.4%

annually.

Although vacancies are

much more limited

among the Tax Credit

supply, rents among this

supply have increased at

an annual rate of 4.8%

over the past five years.

There is Limited Availability and Long Wait Lists Among GovernmentSubsidized Projects and for Housing Choice Vouchers - A total of 20 multifamily properties were surveyed in the county that operate with a government subsidy. There were only two vacant units among the 1,831 total government-subsidized units surveyed. According to management at the surveyed subsidized projects, most of these properties have long wait lists. According to a representative with the Housing Authority of the City of Asheville, there are approximately 2,781 Housing Choice Voucher holders within the housing authority's jurisdiction and 1,442 people currently on the waiting list for additional vouchers. These market metrics indicate a strong level of pent-up demand for rental housing serving the lowest income households in the market.

Executive Summary- 4