Raleigh Needs a New Direction on Housing Affordability:
What We’re Doing Isn’t Working
Across the country, the price of housing of all kinds is increasing dramatically, with the result that people of lesser and moderate incomes are paying half or more of their disposable income for housing and utilities. In sum, we have an affordability problem.
The problem is especially bad in Raleigh, where the city’s own data show that 51,831 low- and moderate-income households are cost-burdened by housing. All pay more than one-third of their income for housing. Almost half pay more than 50% of their income to afford housing – a shocking number.
Raleigh is bad, and it is getting worse, not better. The “market” here is not working to supply housing at affordable price levels for any but the wealthy. For others, housing subsidies help, but the amounts available fall far short of meeting the need, or even of replacing the lower-priced homes that are scraped off every day.
Developers believe the answer to the housing problem is deregulation of housing construction, which would permit them to build more housing for the wealthy – with “trickle down” effects supposedly aiding middle- and lower-income folks.
Trickle-down, also called “filtering,” is a thoroughly discredited theory of how markets work, and we reject it as an answer to the severe market failure in housing.
More housing is needed, yes. But we need more housing at every price level, not just more McMansions, million-dollar townhouses and $4,000-a-month apartments. We need much more housing that people can afford.
In contrast to the proponents of trickle-down, we view housing as a critical element of the social fabric, very much like good public schools, accessible health care, or safe roads.
As with other public goods, the wealthy can buy all the housing they want. But others may need financial aid to buy in the private market; or, at lower income levels, they need rent-stabilized housing, or public housing.
In Raleigh, taxpayers have regularly subsidized housing through bond issues and by paying an extra 1-cent property tax for housing.
Developers, however, who profit greatly from a booming market for luxury homes, have never pitched in. They’ve never been asked, nor have they offered, to share the wealth with others. It’s time they were asked.
Our Affordability Agenda
1. Increase taxpayers’ support for affordable housing.
Ask taxpayers to approve a 2026 housing bond issue of $200 million or more, as proposed by One Wake and supported by Livable Raleigh.
The staff proposal for just $103 million, adjusted for inflation, is less than the very inadequate $80 million bond issue sent to voters in 2020. We need to do better.
2. Increase developers’ contributions to affordable housing.
Expect developers to offer public benefits in rezoning cases. The primary public benefit needed in Raleigh is additional affordable housing. Council should reject rezoning applications that do not meet a reasonable public-benefits test, which Council can apply without violating state law.
3. The so-called Missing Middle ordinances should be rewritten to promote affordability and the preservation and/or replacement of lower-priced housing. “Missing Middle” should not result in the scrape-off of affordable homes and their replacement by multiple expensive homes. Density without affordability is the wrong goal.
4. All major residential and mixed-use projects on transit corridors should also be mixed-income projects; a minimum of 20% of total units should be affordable at 30-60% of area median income (AMI) levels.*
5. If developers choose not to include affordable units in residential projects, they should make voluntary in-lieu contributions to the Affordable Housing fund equal to $50,000 x the total number of units in the project. This option should not be allowed, however, if the project is on a transit corridor; there, affordable units should be included.
6. Citizens are the best source of wisdom about meeting affordable-housing needs in their own communities. CACs should be engaged along with the Community Engagement Department in setting goals and expectations for development.
7. The city should track and publish data on the number of new affordable housing units added each year, the number of existing affordable homes lost to teardowns, and the net result of additions vs. subtractions of AH units.
*Affordable rents should be defined as affordable to tenants at 30-60% of area median income, using HUD’s published tables for the Raleigh-Cary MSA to establish median income levels for 1- , 2- , 3- , and 4-person households.
The City of Raleigh publishes the HUD data here: HUD Income and Rent Limits
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