‘The Canary In The Coalmine’: North Carolina’s Housing Crisis
Affordable housing is in limited supply in many communities in North Carolina. The problem is particularly acute in Wake and Mecklenburg counties, where the population growth has outpaced that in more rural parts of the state. WUNC data reporter Jason deBruyn explored what is happening to housing in the Triangle region for his new in-depth series “Where We Live.”
DeBruyn joins host Frank Stasio and other experts to put the housing crisis in a larger economic context, examine the role of policy and explore how renters are impacted. DeBruyn paints a picture of just how competitive the housing market is in the Triangle and looks at the role of factors like gentrification and NIMBY, or Not-In-My-Back-Yard, residents.
Henry McKoy is the director of entrepreneurship at North Carolina Central University and the former North Carolina assistant secretary of commerce. He looks at the larger economic forces that are fueling the housing crisis, like wage stagnation and globalization. McKoy argues that the displaced public housing residents of Durham’s McDougald Terrace are a canary in the coalmine — and that the plight facing them is a precursor of things to come if current U.S. policies don’t change.
'Income has not kept pace with the rise of housing. And so when that happens, what you have is you have people that ultimately get priced out of their homes, even though they work every day.' -Henry McKoy
Erika Brown can speak to the housing crisis on a professional and personal level. She works as a senior planner of community and economic development with the consulting group Triangle J Council of Governments, and she recently bought a house in Durham. The process was a nightmare for her and her partner. They realized that a $200,000 budget severely limited their choices, and what they could afford got bought up before they could get a bank to write a mortgage. Local governments in North Carolina have made progress in finding affordable housing, Brown says, but until they can provide monetary incentives for developers to include affordable housing in their plans, the problem will persist.
Jesse Hamilton McCoy II is the supervising attorney for the Duke Law Civil Justice Clinic and he runs the Eviction Diversion Program in Durham County. He says that because the U.S. treats housing as a commodity, and not a right, it’s subject to the whims of supply and demand. That fluctuation leads to housing shortages and sometimes evictions. Host Frank Stasio talks with the experts to better understand the lead-up to the housing crisis and what North Carolina needs to do to mitigate the damage.
Henry McKoy on how other parts of the nation are dealing with affordable housing:
Things are tough all over. It’s relative depending on where you are, but it doesn't matter where I go — on the West Coast and the Northeast, I do work in Hawaii, other places like that — affordable housing is at the top of the food chain for challenges and problems. And so I would say that no one has really figured out at this point, how to make it work. Certainly there may be places that are grappling with it in different ways, but things really are tough all over.
Jason deBruyn on how the federal government funds housing:
Tax dollars already go in a massive way to support home ownership. The mortgage interest deduction — that means that whatever interest you pay on your mortgage, you then get to deduct that off of your taxes — this costs the federal government anywhere from $80 to $100 billion per year. That's a lot of money. Section 8 — the entire program of Section 8 — costs the federal government only about $30 billion a year.
Jesse Hamilton McCoy II on how black Americans have been historically blocked from home ownership:
Homeownership in America is your primary vehicle for generation of wealth. So if you have been inhibited from being able to participate in a generation of wealth until about 1968, that's a long chasm between you and where the rest of the community may be. In addition to that, there are a lot of factors that even in 2020 people don't necessarily know about when it comes to trying to acquire a mortgage … All they know is rent. They don't understand how down payments work, or how to save up for a down payment or what a mortgage payment would even look like. And so what I always say is we've created essentially a class of people who are perpetual renters. They rent and teach their children how to grow up and go rent a place, but the problem is when you rent you don't have ownership of your block, your community, your household.
'We've created essentially a class of people who are perpetual renters.' - Jesse McCoy
Erika Brown on why investors have the upper hand over normal buyers in the real estate market:
So investors are swooping in, [and] they can make quick deals with cash on hand that folks like me and many other people cannot make because we have to go through the mortgage buying process.
Jesse McCoy on the newly constructed housing in Durham and who it excludes:
My concern when it comes to increasing housing stock … I don't think that the stock necessarily has been the problem. It's that everything that has been created has not been for people who live in Durham who don't make elevated wages. So even if you live downtown, we have developments that are right across from the courthouse and would have great access to the bus line, walking distance to most jobs where people are going to be, but they're renting for $1,400 - $1,500 a month. So the classic person who's working fast food make [$18,500/year], that's not going to be possible. So if we bring new developments, one of the things I would like to see would be developments that are going to be more so primarily focused on those communities.