Do new housing units free up affordable ones? Not really

May 4—For the past decade, the lack of affordable housing has been one of the thorniest challenges in Haywood.

It's most acute for the individuals trying to find housing that fits their budget, but it also preys on the mind of the business community and elected leaders.

At a recent Haywood County Chamber of Commerce breakfast, for instance, attendees were asked to take several surveys. Results showed that for two of the survey questions affordable housing was a top concern.

In recent years, each time a new housing project is reviewed through the public planning process, those speaking out at public hearings say the new units won't be affordable. A standard response used to be that the more units were available, the more they generated competition for lower rate. The rationale offered was that once people leave their existing rental to move into a newer one, it would open up an older, more affordable dwelling.

The Mountaineer set out to learn whether this had actually happened in light of the new housing projects recently completed. The short answers ranged between "not really" to "a bit" or "not yet," but the explanations illustrate the breadth of the problem.

The short answers for those who want to cut to the quick are that 1) building costs have skyrocketed; 2) property owners have found it more profitable to convert their rental to a vacation rental though this is changing and 3) there are simply more people moving to the county who need a place to stay.

Market forces

Haywood County Commission Chairman Kevin Ensley has served on affordable housing task forces and spoken to numerous individuals in the construction field through his surveying business. He has plenty of stories about local residents unable to find affordable housing.

"To me, the more housing you have available, the lower the cost is, because it's about supply or demand," he said, "but we've had such a demand in the past, it may take a while for that to happen."

Studies have indicated a major shortage in available housing units in Haywood, something that will take years to erase, he said.

A 2021 study commissioned by Dogwood Health Trust showed the deficit to be between 1,800 and 2,400 rental and owner units for Haywood County. The variation depends on the federal and state definitions used. The 500-page study, titled Housing Needs Assessment: Western North Carolina, prepared by Bowen National Research, included all those variations.

The gap between availability and demand has driven up rental costs across the board, Ensley said.

For instance, when the Palisades opened the first of its 200 rental units in the Plott Creek area in 2021, he said, they seemed to be snapped up by professionals living in the community or working in the area.

"If they are renting something nice like that, they don't want to mow a yard or anything like that. It's a little bit different type of living that we didn't have here before," Ensley said. "Realtors are telling me that people are still moving in here and some are staying in places like that until they can find a house to buy."

It's common for a three-bedroom, two-bath home in Haywood to sell for around $340,000.

"People are saying this is not affordable, but that's the economic reality of what it costs to build," Ensley said.

It's not that Ensley is a huge fan of building subdivisions anyplace they fit, though.

Farmland or houses?

The rate at which farmland is disappearing in Haywood is alarming to even those who fought against any type of land-use restrictions in the past, Ensley said. He spoke of a leading farmer who told him it might be time to reconsider zoning in Haywood.

Ensley thinks the preferable way to conserve farmland would be to help make farming profitable. He has a list of several ideas, including a cannery where value can be added, increased marketing of locally grown produce, allowing dairies to sell raw milk and promoting the development of herbal markets.

"We're at the elevation where things like ginseng grow well," he said. "Supplements are expensive, and people are really into herbs. Those are things we could capitalize on that we're not."

Waynesville attracts renters

Waynesville Mayor Gary Caldwell likewise sees little change in a housing market that's been tight for years.

When asked whether new units in town that have come on line had created room for affordable housing, his two-word answer was "not really."

He said he's spoken with many who are downsizing, which opens up larger homes to sell. The problem is that investors are snatching up properties in town as soon as they become available.

Some of those units are ones that used to be long-term rentals, but were converted to vacation rentals, something that is good for local businesses, but does little to create housing for those who sorely need it. The Waynesville planning board is considering various types of restrictions that could limit the locations of future vacation rentals.

In addition to the investors and competition from the vacation rental market, Caldwell said the town's proximity to Asheville compounds the rental woes.

"There are folks who work in Asheville that are renting houses here because Asheville is so high priced," he said. "There are a lot of apartments here for $1,400 for a two bedroom, and that's pretty heavy, but it's cheaper than Asheville."

Low-income housing

Patsy Davis, executive director of Mountain Projects, said there isn't a week that goes by without her agency receiving at least five SOS calls about people who desperately need housing.

"I'm not seeing availability change that much" she said. "If every developer would set aside affordable rentals like Mountain Creek Apartments (the former Bi-Lo shopping center site) did, that would make a little bit of an impact, but I don't know of any others that have. (Mountain Creek has) done it well and set a good example."

(Coming next: Those in the know discuss the difficulty in finding affordable housing in Haywood.)