The Charleston area faces a shortage of quality housing at the lowest price levels ($125,000 to $175,000). The median sale price of housing sold in Charleston area rose 164% from 1990 to 2004, with 41.9% increase between 1999 and 2004.
(Charleston Trident Realtors Association)
Yet job growth has been low wage, service sector positions, and median incomes fall far below a family’s ability to afford a median priced housing unit. For example, an average construction worker, who earns $29,360 falls more than $70,000 short of what is needed to purchase the median home in Charleston County priced over $250,000.
Housing affordability is no longer limited to low income families. Most public programs and subsidies have focused on serving those earning 80% and below of the area median incomes. Yet in high cost areas, the assumption that someone earning the area median income can afford the median priced home is no longer true.
Median income in Charleston for a family of four is $55,400.*
The median priced home is $258,000.
A household earning the median income in Charleston can afford a mortgage of no more than
$166,200.
* See 2007 Income Limits Chart
Shortfalls in federal subsidy and oversight has heightened local government’s role in the promotion of affordable housing considerably, both in terms of leadership and policy innovation. Local initiatives will be critical to making real progress on communities housing problems. Yet local authorities are more able to shepard resources, assess needs, and finesse political obstacles.
It will become more critical for local governments- as well as advocates and builders in private and non-profit housing industries- to be more efficient and creative as possible in addressing the growing crisis of affordability in high cost areas.
What is the solution to this housing affordability crisis?
Like many complicated problems, there is no single, simple solution. The Region needs to address availability of land, availability of infrastructure, the need for a broader variety in housing choice and the willingness to partner. Area counties and municipalities must work together to attack the housing affordability problem, but to make a significant dent in the problem, creative and innovation planning tools, reduction in barriers to development and a significant amount of dedicated revenue will be needed.
On the order of $10,000 to $50,000 or more per new affordable housing unit is needed to close the gap between housing costs, other funding sources such as federal grants and tax credits, and purchasers’ incomes. Regional leaders will need to emphasize partnerships with non-profits and for-profit housing developers as the builders and operators of affordable housing to ensure local housing needs are met.
Implementation of proactive planning processes in the region’s Comprehensive plans through the plan’s housing element and zoning ordinance will be critical in increasing production and preserving existing stock. . The key to many of the region’s housing programs is the support for a tri county housing trust with an ongoing source of revenue to and provide gap funding for affordable housing projects. The Lowcountry Housing Trust mission is to increase affordable housing production, ensure the permanent affordability of existing housing units and reduce barrier to such production, by assisting non-profit or for-profit developers and housing providers.
This local funding source will encourage builders to construct affordable housing projects, providing gap financing for development and rehabilitation projects using other subsidies.
