Housing needs dire and growing in Jackson
The Development Finance Initiative has conducted a housing needs assessment for Jackson County, and while the findings won’t be surprising to anyone living in the area, they do outline critical housing needs.
“We’re here today to talk about the housing needs assessment to get an understanding of the demand for different housing types and the economic drivers and current housing supply that impact housing needs in Jackson County,” said Development Finance Initiative Project Manager Sarah VanLear in a presentation to the county commission earlier this month.
The Development Finance Initiative is a program of UNC’s School of Government that works with local governments across the state to meet housing needs. The group is identifying sites that can meet the affordable housing needs specific to Jackson County to conduct high-level site and financial feasibility analysis.
“The goal of that work is really to give you an idea of physically what’s possible on that site and then financially, what’s the feasibility,” said VanLear. “What kind of private resources you may be able to attract to that opportunity, what kind of funding gap might exist that can inform your participation with any other stakeholders that need to come along in partnership with you.”
What is affordable housing? According to the most common federal designation, housing is affordable when a household spends 30% or less of its income on housing and all housing-related expenses, such as utilities and property taxes.
“If you start spending more than 30%, we consider your household as cost-burdened,” said VanLear.
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A household is considered severely cost burdened if it is spending over 50% of income on housing-related expenses.
There are a couple different kinds of affordable housing. One is considered naturally affordable. This is housing that is affordable for someone without any type of income-based restriction.
“The biggest piece about naturally affordable housing is that those residents are certainly vulnerable and susceptible to market changes,” VanLear pointed out.
Mobile homes make up about one-third of the naturally affordable homes in the county. Approximately 300 of which are in flood zones.
“This is an important source of affordable housing in the county but one that comes with risks to its residents,” VanLear said.
There is also income-restricted affordable housing. This type of housing can be publicly or privately owned, but the amount a household pays is directly related to its income. These types of units are not as susceptible to those market changes.
The average median income for a four-person household in Jackson County is approximately $74,000 a year. Low-to-moderate-income households are defined as those that make 80% or less of the area median income. This means that a four-person household in Jackson County is considered low-to-moderate income, or LMI, if it is making $58,000 a year or below. About 50% of LMI households in Jackson County make 50% or less of the area median income, or AMI, or under $36,000 a year.
According to data compiled in the housing assessment conducted, there are at least 2,500 households in Jackson County that are cost burdened, with 93% of LMI households being cost burdened.
In Jackson County, a one-person household making $40,800, an average salary for an elementary school teacher in the area, would be at about 80% of the area median income. This person would need to spend about $1,100 or less per month on all housing-related expenses to not be cost burdened. Someone making $36,600 would need to spend about $820.
However, the average rent available in the county is around $2,000, not including utilities.
“As you can imagine, it’s pretty difficult at these income levels to find a place to live that is not going to leave you cost burdened,” said VanLear.
Since 2016, households that are moving into the county make more than both the AMI and households that are leaving the county. While the AMI is $74,000, households moving into Jackson make an average of $94,000 and households leaving the county make an average of $61,000. There has been a net increase of about 3,600 people since 2016, half of whom moved from outside North Carolina.
During the same timeframe, the largest industry growth in the county has been for positions making less than $80,000 a year.
“We’ve heard from many stakeholders about how housing is affecting business and employees in the area,” said VanLear. “This is true from large institutions like the hospital and WCU and the paper mill, to small businesses.”
“We’ve heard stories of folks who have accepted a job, but then had to rescind because they couldn’t find housing upon coming here. So, this is something that is top of mind in the business community.”
But the housing need in Jackson County extends beyond just the need for affordable housing. There are 1,200 households in Jackson County, 700 LMI renters and 500 LMI owners, with severe housing needs, meaning they are living in lower-quality or overcrowded homes. Most of those households are making less than $22,000 a year. This data does not include Cullowhee’s student population, which can severely skew income level data.
To put that in perspective, the county has approximately 250 units that currently serve as income-restricted affordable housing. And 35 of those are set to expire within a few years. There have not been any new income-restricted affordable housing units built since 2016.
Low inventory creates another sector of housing need. In Cashiers and other rural areas outside the municipalities, the housing market is dominated by seasonal-use homes. One-quarter of housing units in the county are reserved for seasonal use, with that statistic rising to 40% in Cashiers.
The township of Hamburg has seen almost 250 permits for $330 million worth of new single-family residential developments over the last three years, the majority of which are short term rentals and seasonal-use homes.
“Seasonal use is growing beyond Cashiers and other parts of the county,” said VanLear.
What’s more, single-family homes built in Cashiers and Hamburg tend to be large and more expensive. Since 2017, half of Jackson’s new single-family homes have been concentrated in these two areas with the average cost of development around $1.3 million. New single-family units in Sylva and Cullowhee cost an average of $280,000 to develop.
About 94% of multifamily housing developments built since 2016 have been student housing in Cullowhee. Units like those at The Husk charge almost $2,000 per month in rent, which would require a person to make 100-120% of the AMI to be able to pay rent and not be a cost-burdened household.
Rental and home ownership vacancy rates across the county are extremely low, less than 1% in the largest municipalities.
“If you want to buy or rent a home today you are essentially waiting for somebody to move out in order to then compete with everybody else who’s been waiting for that person to move out to then try to rent or buy that home,” said VanLear.
Low inventory, high cost and severe housing needs create a positive feedback cycle in which people in need of affordable housing have fewer and more expensive options as the overall housing need grows.
Low vacancy rates paired with high prices create a rental income mismatch in which higher-income households are renting spaces that are more affordable to them, while lower-income households are then pushed into renting units that are unaffordable.
“Half your LMI households are currently living in rental units that are unaffordable to their income level,” said VanLear. “There’s a mismatch happening there based on what’s currently available in the market.”
Since 2020, the average sale price for a single-family home has almost doubled. In 2023, the average three-bedroom house cost $567,000 and the average two-bedroom house cost $413,000.
“Today, you need an average income of $163,000 a year for your household to be able to afford on the market,” VanLear said.
“We see the potential here for the current crisis to grow based on these findings,” VanLear said. “The good news is there are a lot of different things that can be done and we’re excited to continue the discussion with you on actions that can be taken to support the next steps for affordable housing in Jackson County.”
According to VanLear, the Development Finance Initiative will keep working with Jackson County on developing its vision, public interest and feasibility for housing in the county and then try to help attract the right affordable housing developers for potential projects.
“Our goal is to work through an intentional process that facilitates public-private partnership,” said VanLear.
