Large & Growing Gap Between High Home Prices and Low Wages in the Cape Fear Region

Nov 13, 2015

In the Cape Fear region, there’s a large and growing gap between high home prices and low wages.  At a recent roundtable, regional government and business leaders discussed this disparity.  Who is affected by the lack of housing affordability?  And how does it affect the community at large?

According to the U.S. Department of Housing and Urban Development, no more than 30% of your income should go to housing costs.  That’s the definition of affordable housing.  When you factor in transportation, a household should spend no more than 45% of income.  But Steve Spain, Executive Director of Cape Fear Habitat for Humanity, says housing and transportation cost over half of the annual income in New Hanover County, on average.  But he says doling out fifty percent isn’t as hard if you make six figures: 

"If you’re cost burdened and paying 50% of your income for your housing, it’s very different if you have a $100,000 household income than if you have a $20,000 household income. Because what’s important is what’s left. If you have a $100,000 income and you’re paying 50% for housing, you have $50,000 left for food, clothing, and other necessities. If you have a $20,000 income and you’re paying 50%, you only have $10,000 left for those same things." 

So, low income households are hit hardest.  And in the Wilmington Metropolitan Statistical Area, almost 60% of jobs are low wage.  This includes police officers, nursing assistants, and childcare workers.

"Having employees making thirty to forty thousand dollars a year, there are not many homes in this community that those individuals could afford to buy based on that salary.  There are not many homes that are being built in this market that a person in that salary range, whether it be an entry-level county employee or a school teacher or a sheriff’s deputy or police officer, could afford to buy in our community right now." 

That’s New Hanover County Chairman Jonathan Barfield.  Even if a person can find affordable housing, he points out that it may be located in a food desert, or an area without access to public transportation. 

Habitat for Humanity’s Spain says there’s a lack of affordable options in the area: 

"Of the ten most populated cities in North Carolina, Wilmington is 9th in household size.  We’re fifth in terms of highest average rents, but we have the second highest average home values, at $236,100, far above the statewide average of $152,700." 

Charlie Mattox is a market president of Branch Banking and Trust Company. He says the biggest barrier to home ownership is the ability to qualify for a mortgage:

"A young teacher and a young police officer get married. In New Hanover County, based on the average salaries that we have and the average median home price of $227,000 in the county, if they are like the rest of Americans in our country and they are able to save 5%, if they are able to do it, given debt that they have accumulated for loans, cars, other things that they buy, how long would it take for them to save a down payment of 20% on the average priced home? 13 years."

Without options for affordable housing, many in the Cape Fear region are left without a stable living situation. Here’s Dr. Thomas Barth, the moderator of the roundtable, quoting HUD Secretary Julian Castro: 

"A stable home serves as the foundation for our lives. It’s where we begin every morning and where we end up every night. It’s where we raise our families and build our futures. It provides us with the security to look towards a brighter tomorrow and the peace of mind to pursue our dreams."