Adopted - September 20, 2022
Town of Wake Forest | HOUSING AFFORDABILITY PLAN
ACKNOWLEDGEMENTS The Town of Wake Forest’s Housing Affordability Plan is the result of a joint effort between the Town and a broad group of local stakeholders. We would like to thank the many community members, service providers, elected leaders, Town staff members, Advisory Committee members, and members of the public who were instrumental to this process and provided invaluable insight and feedback on housing conditions and housing priorities in Wake Forest.
Advisory Committee Members
Project Consultants
Desirae Williams Municipal Employee
HR&A Advisors
Yolanda Winstead DHIC
Alicia Arnold Wake County Department of Housing Affordability and Community Revitalization
Little Diversified Architectural Consulting
Board of Commissioners
Planning Staff
Jacquie Ayala Habitat for Humanity Mike Burger Tri-Area Food Pantry
Vivian Jones Mayor
Courtney Tanner Planning Director
Jim Dyer Commissioner Chad Sary Commissioner
Jennifer Currin Assistant Planning Director
Rachel Eberhard CASA
Brad West Long Range Planning Manager
Dustin Engleken Triangle Apartment Association
R. Keith Shackleford Commissioner
Dylan Bruchhaus Planner II - Long Range
Dawn Fagan Wake County Housing Authority
Nick Sliwinski Commissioner Adam Wright Commissioner
Ben Coleman Zoning Enforcement Officer
Wayne Felton Raleigh Housing Authority
Kari Grace Senior Planner - Development Services Emma Linn Planner I - Development Services
Rhett Fussell Raleigh Area Land Trust
Planning Board
Joe Kimray Chair
Jennie Griggs Northern Wake Senior Center
Josh Michael Planner I - Long Range
Thomas Ballman Member
Tara Hall North Carolina Housing Finance Agency Shynese Hockaday Louisburg College and Northeast Community Ryan Hutchinson Southeastern Baptist Theological Seminary
Michelle Michael Senior Planner - Historic Preservation
Sheila Bishop Member
Patrick Reidy Senior Planner - Development Services Tim Richards Senior Planner - Development Services
Michael Hickey Member
Christopher Joyner Member
Karin Kuropas Member
Phil Landis Housing Advocate
Michael Siderio Member
Nathan Spencer Wake Up Wake County
HOUSING AFFORDABILITY PLAN | Town of Wake Forest
TABLE OF CONTENTS
4
57
Introduction
Appendices
5 6
Plan Overview
58 59
Appendix 1: Terms Defined
Defining Affordability
Appendix 2: 2021 Area ................ . Median Income Limits for ................ . Raleigh MSA 60 Appendix 3: 2021 Maximum ............................. . Affordable Monthly Housing ............................. . Costs for Raleigh MSA 61 Appendix 4: Town of Wake ............................. . Forest Nondiscrimination ............................. . Notice 62 Appendix 5: Town of Wake ............................. . Forest Nondiscrimination ............................. . Policy
7
Existing Conditions: Population
8 9
Regional Demographics Local Demographics
16
Existing Conditions: Housing
17
Housing Conditions
24 27
Housing Needs
Barriers to Housing Affordability
28
Community Engagement
29 30
Planning Context Plan Outreach
34
Taking Action
35 38
Influences
Overarching Strategies
39
Strategy 1: Preserve and Expand Access to Homeownership
39 40 42 43 44 41
Tools Overview
Down Payment Assistance (DPA) Community Land Trust (CLT) Owner-Occupied Rehab (OOR)
Incentive Zoning
Accessory Dwelling Unit (ADU) Demonstration Program
45
Strategy 2: Create New Affordable Rental Housing
45 46 49 50
Tools Overview
Public Land Disposition
Public Housing Redevelopment
Low-Income Housing Tax Credit (LIHTC) Gap Funding
51
Strategy 3: Build Capacity and Partnerships
51 52 53 54 55
Tools Overview
Coordination with Wake County
Capacity Building
Monitoring
Community Engagement
56
Implementation Steps
INTRODUCTION
Town of Wake Forest | HOUSING AFFORDABILITY PLAN
INTRODUCTION
4
INTRODUCTION
HOUSING AFFORDABILITY PLAN | Town of Wake Forest
Plan Overview
The Wake Forest Housing Affordability Plan seeks to lay a path for expanding housing opportunities that are rooted in analysis and community input. Wake Forest is situated in one of the fastest-growing regions in the United States, leading to considerable population growth for the Town in recent decades. The large influx of new residents has substantially increased demand for both rental and for-sale housing in the community. As a result, many seeking to locate to Wake Forest are unable to find housing that they can afford,
while numerous households of existing residents are at risk of being displaced from Wake Forest and possibly the region. In response to these challenges, the Town of Wake Forest undertook a Housing Affordability Plan to analyze local housing conditions, determine local housing need, explore proven housing affordability strategies, and refine these strategies into practical actions for the Town. The strategies contained herein set the framework for how the Town can work with community partners to make thoughtful, targeted investments in housing.
The Housing Affordability Plan was developed between 2021 and 2022, with regular engagement throughout.
5
INTRODUCTION
Town of Wake Forest | HOUSING AFFORDABILITY PLAN
Defining Affordability
Housing "affordability" can be defined in different ways based on both household income and housing types. Affordability in Relation to Income Affordable Housing: Under a standard determined by the U.S. Department of Housing and Urban Development (HUD), housing is affordable when housing costs are less than 30% of a household’s gross income. HUD uses the Area Median Income (AMI) for a family of four as the primary metric to determine affordability in various regions of the country. In the case of Wake Forest, HUD uses the Raleigh Metropolitan Statistical Area’s AMI, which was $95,700 as of 2021. Alternatively, the US Census’ Median Household Income can be used as a metric for determining affordability on a more local level. The Median Household Income in Wake Forest is $92,210 per the 2019 American Community Survey (ACS) 5-year estimates.
Key Affordability Terms Defined: Cost Burden: A household that spends 30% or more of their gross income on housing costs is considered cost burdened. Severe Cost Burden: A household that spends 50% or more of their gross income on housing costs is considered severely cost burdened. Low- and very low- income households are particularly impacted. Residual Income: A household’s residual income is the money left for necessary expenses such as food, childcare, health care, and transportation after subtracting housing costs. Based on the Economic Policy Institute’s Family Budget Calculator, Wake Forest households that make less than 70% of the Area Median Income will struggle to afford the cost of living due to the costs of food, childcare, health care, and other necessities.
Affordability in Relation to Housing Types Some housing is affordable because it receives public subsidy, while other housing is affordable because of the type, location, or age of the housing. All housing types play an important role in meeting the diverse range of housing needs and preferences of the Wake Forest community.
Naturally Occurring Affordable Housing (NOAH): Market-rate housing (for rent or purchase) that is priced at levels that are affordable to low- or moderate-income residents. Subsidized Housing: Affordable rental and ownership housing developed and/or operated by nonprofit and for-profit developers using public subsidies. Subsidy can be both at the building level (project-based) or the tenant level. Tenant Based Vouchers: Families receive a voucher to be used to pay for a portion of rent at an apartment. North Carolina law does not require all landlords to accept this form of rental subsidy.
Public Housing: Housing managed by public housing agencies with operating and capital funds provided by HUD.
Permanent Supportive Housing: A model that combines housing, health care, and supportive services to help individuals and families lead more stable lives.
6
EXISTING CONDITIONS: POPULATION
HOUSING AFFORDABILITY PLAN | Town of Wake Forest
EXISTING CONDITIONS: POPULATION
7
EXISTING CONDITIONS: POPULATION
Town of Wake Forest | HOUSING AFFORDABILITY PLAN
Regional Demographics
Wake County is one of the fastest growing counties in the country, both in job growth and population growth. Regional Population Growth North Carolina’s Triangle region, a nickname given to the neighboring metropolitan areas of Raleigh, Durham, and Chapel Hill, is a nine-county region home to three major research universities (Figure 1). The presence of these universities has led to the area becoming a hub of
burgeoning technology and biotech companies, fueling rapid population growth in recent decades. Wake County, where Wake Forest is primarily located, has been at the center of this rapid growth. Wake County has grown by 25% since 2010, outpacing the state of North Carolina (+9%). With 1.1+ million residents, Wake County is the most populous county in North Carolina.
FIGURE 1: PERCENT POPULATION GROWTH ACROSS WAKE COUNTY BY JURISDICTION 2010-2020
Youngsville
DURHAM
WAKE FOREST
ROLESVILLE
ZEBULON
MORRISVILLE
RALEIGH
KNIGHTDALE
WENDELL
CARY
LEGEND
10% or less 11% to 20% 21% to 30% 31% to 40% 41% to 50% 51% to 60% 61% to 70% 71% to 80% Over 80% Wake County Boundary
APEX
GARNER
HOLLY SPRINGS
CLAYTON
FUQUAY-VARINA
Source: American Community Survey (ACS) 5-Year
8
EXISTING CONDITIONS: POPULATION
HOUSING AFFORDABILITY PLAN | Town of Wake Forest
Local Demographics
FIGURE 2: COMPARATIVE POPULATION PERCENTAGE GROWTH 2010-2020
The Triangle region's appeal has had a substantial impact on Wake Forest's population growth. Local Population Growth Wake Forest is located in the northeastern corner of Wake County, with a small portion in Franklin County. Like many of the suburban communities in the region, Wake Forest is substantially impacted by the region’s population growth (Figure 2). Wake Forest’s population has grown by 55% since 2010, faster than both Wake County (25%) and the State (9%). In 1990, Wake Forest’s population was 5,769. Today, the population exceeds 47,601, almost ten times the population thirty years ago (Figure 3). Further, over 60% of residents have moved to the Town since 2010. This recent influx of residents has put substantial pressure on Wake Forest’s housing market to grow quickly to meet demand.
55%
25%
9%
Wake Forest
Wake County
North Carolina
Source: Decennial Census, 2020
FIGURE 3: POPULATION GROWTH IN WAKE FOREST 1990-2020
THE TAKEAWAY
1990
2000
2010
2020
Wake Forest’s explosive population growth has outpaced both Wake County and the State’s growth since 2010. These trends put substantial pressure on Wake Forest’s housing market to keep pace.
Source: Decennial Census, 1990-2020
9
EXISTING CONDITIONS: POPULATION
Town of Wake Forest | HOUSING AFFORDABILITY PLAN
Local Demographics
FIGURE 4: CHANGE IN HOUSEHOLD BY INCOME IN WAKE FOREST 2010-2020
Household Income Population growth in the region has been driven primarily by households making more than $100,000 per year (Figure 4). In 2010, households earning less than $50,000 made up the largest share, though not the majority, of Wake Forest households. While population growth has occurred among all income groups earning above $50,000, most new growth (88%) has been in households earning more than $100,000 per year. Increases in both wages and number of high-income households has pushed the median household income up to $100,162 in Wake Forest as of 2020. There is a disparity in income between new and existing households. Recent residents (households that moved within a year of 2019) in Wake Forest had a median income of $140,000, compared to $92,210 for existing households at that time (Figure 5), an income disparity of almost $50,000. This disparity creates challenges for existing residents who have to compete with high earners in the housing market.
88% of new household growth
+3,134
2010 2020
-168
+267
+176
-634
Less than $25,000
$25,000 to $49,999
$50,000 to $74,999
$75,000 to $99,999
$100,000 or More
Source: American Community Survey (ACS) 5-Year
FIGURE 5: INCOME DISTRIBUTION IN WAKE FOREST: NEW HOUSEHOLDS VS EXISTING HOUSEHOLDS 2018-2019
THE TAKEAWAY
Population growth in Wake Forest is driven by high income households, who on average make almost $50,000 more per year than existing residents. This can make it challenging for existing residents to find housing they can afford.
Source: American Community Survey (ACS) 5-Year, Public Use Microdata (PUM)
10
EXISTING CONDITIONS: POPULATION
HOUSING AFFORDABILITY PLAN | Town of Wake Forest
Local Demographics
FIGURE 6: MEDIAN HOUSEHOLD INCOME IN WAKE FOREST BY RACE AND ETHNICITY 2020
Household Income by Race and Ethnicity Wake Forest is becoming more diverse, however there are still income disparities by race and ethnicity in Wake Forest that help drive disparate housing outcomes. The median Asian and white household earns more than Wake Forest’s overall median income ($137,708 and $102,209 respectively) (Figure 6). At the same time, the median Black and Hispanic household earns less than Wake Forest’s overall median income ($89,808 and $62,500, respectively). Renter Household Income New renter households making more than $75,000 per year have increased, benefiting from new rental housing development in Wake Forest (Figure 7). The median income of renter households has grown by 38% since 2015. In 2015, the median renter household income was $41,116 compared to $56,868 in 2020. This can likely be explained by both increases in renter incomes and the loss of lower-income renters who cannot afford to stay in Wake Forest.
$137,708
$102,209 $100,162
$89,808
$62,500
Asian Households
Black Households
Hispanic Households
White Households
Wake Forest Overall
Source: American Community Survey (ACS) 5-Year, 2020
FIGURE 7: RENTER HOUSEHOLDS IN WAKE FOREST BY INCOME 2015-2020
1,189
Renter 2015 Renter 2020
1039
948
846
719
662
581
538
THE TAKEAWAY
467
396
337
270
Although the median renter income is increasing, this is due in part to the loss of lower income renter households. And while some Wake Forest residents are seeing rising incomes, Black and Hispanic households still have disproportionately lower incomes, which impacts their ability to compete in the housing market.
Less than $20,000
$20,000 to $34,999
$35,000 to $49,999
$50,000 to $74,999
$75,000 to $99,999
$100,000 or More
Source: American Community Survey (ACS) 5-Year
11
EXISTING CONDITIONS: POPULATION
Town of Wake Forest | HOUSING AFFORDABILITY PLAN
Local Demographics
FIGURE 8: MOST COMMON OCCUPATIONS IN WAKE FOREST 2020
Employment Growth Employment growth has been a primary driver of population growth in both Wake Forest and the region. Importantly, the occupations that are growing the fastest in Wake Forest pay higher wages than the current most common occupations. From 2010-2019, there was a 2% increase in the share of working households living outside of Wake Forest that are employed in Town. Additionally, there was a 2% decrease in the share of working households living within Wake Forest that are employed outside of Town. As of 2020, the four most common occupations in Wake Forest pay low to moderate wages, including sales, office/administrative, food/serving, and transportation occupations (Figure 8). Median wages for these occupations range from $22,000 to $39,000 annually. While lower- to moderate-wage occupations continue to outnumber high- wage occupations, the fastest growing occupations are higher-earning (Figure 9). The four fastest growing occupations reported in Wake Forest in 2020 include management, business and financial, installation and repair, and healthcare. Median wages for these occupations range from $51,000 to $115,000 annually.
Source: Emsi Labor Market Analytics & Economic Data
FIGURE 9: FASTEST GROWING OCCUPATIONS IN WAKE FOREST 2020
Source: Emsi Labor Market Analytics & Economic Data
THE TAKEAWAY
While lower to moderate wage jobs remain the most prevalent in Wake Forest, higher wage jobs are growing more quickly, which is a driver of the rising median income in Wake Forest.
12
EXISTING CONDITIONS: POPULATION
HOUSING AFFORDABILITY PLAN | Town of Wake Forest
Local Demographics
Housing Tenure Wake Forest is primarily a town of homeowners; 70% of Wake Forest households own their homes (Figure 10). A greater share of Wake Forest residents own their homes than the United States average overall (about 64%). In line with state and national trends, the percentage of homeowner households is declining in Wake Forest across almost all income groups. Housing Tenure by Race and Ethnicity The racial and ethnic disparity in household income impacts how different households are represented and participate in Wake Forest’s housing market. One notable impact is the difference in housing tenure status among racial and ethnic groups. Black households are less likely to own their homes than the other groups (Figure 11). In Wake Forest, there is almost an equal distribution of Black households that rent and own their homes, unlike other racial and ethnic groups with larger majority shares of homeownership. While the Census indicates Wake Forest has become more diverse in recent decades, Black homeownership has only marginally increased from 46% in 2000 to 51% in 2020. Comparatively, this rate is lower than all other racial and ethnic groups within the same 20 years.
FIGURE 10: HOUSING TENURE IN WAKE FOREST 2020
30% RENTERS
70% Homeowners
Source: American Community Survey (ACS) 5-Year, 2020
FIGURE 11: HOUSING TENURE IN WAKE FOREST BY RACE AND ETHNICITY 2020
76%
75%
64%
63%
55%
49% 51%
45%
37%
36%
24%
24%
THE TAKEAWAY
Asian Households
Black Households
Hispanic Households
White Households
Wake Forest Overall
U.S. Overall
There are currently about 3 homeowners for every 1 renter in Wake Forest. There is a greater share of homeowners in Wake Forest compared with the U.S. overall. A disproportionate share of Black and Hispanic households rent their homes when compared with white and Asian households.
Homeowners
Renters
Source: American Community Survey (ACS) 5-Year
13
EXISTING CONDITIONS: POPULATION
Town of Wake Forest | HOUSING AFFORDABILITY PLAN
Local Demographics
FIGURE 12: EDUCATIONAL ATTAINMENT IN WAKE FOREST 2020
2.78 Average Household Size in Wake Forest 2020 3.24 Average Family Size in Wake Forest 2020 19.7% Percent of Children (Under 18) in Single-Parent Households in Wake Forest 2020 Educational Attainment Wake Forest residents have high educational attainment, driving high wages. More than half (55.5%) of Wake Forest households hold a Bachelor’s degree or more (Figure 12), substantially higher than the United States overall (38%). Household Size Over 80% of households in Wake Forest contain two or more people, with 28% of households containing four or more people (Figure 13). This distribution of household size impacts the types of housing that households demand and has helped drive the development of homes that can accommodate families.
2.9% LESS THAN HIGH SCHOOL
16.6% SOME COLLEGE
15.5% HIGH SCHOOL
19.0% GRADUATE/PROFESSIONAL DEGREE
36.5% BACHELOR’S DEGREE
9.6% ASSOCIATE’S DEGREE
Source: American Community Survey (ACS) 5-Year, 2020
FIGURE 13: HOUSEHOLD SIZE IN WAKE FOREST 2020
36%
28%
19%
17%
THE TAKEAWAY
1-Person Households
2-Person Households
3-Person Households
4 or More- Person Households
Wake Forest households are well educated on average, helping drive high incomes. Additionally, there is a relatively diverse distribution of household sizes.
Source: American Community Survey (ACS) 5-Year, 2020
14
EXISTING CONDITIONS: POPULATION
HOUSING AFFORDABILITY PLAN | Town of Wake Forest
Local Demographics
FIGURE 14: SHARE OF SENIOR (65+) HOUSEHOLDS IN WAKE FOREST BY HOUSING TENURE 2020
Seniors Over 11% of Wake Forest's population was over the age of 65 in 2020. This is comparable but slightly less than the share of seniors in both Wake County (12%) and the State (16%). Senior households comprise a significant share of both the renter and homeowner markets in Wake Forest (Figure 14). However, households that are either led by or inclusive of seniors are more likely to be cost burdened. Seniors often live on fixed incomes with limited opportunities to benefit from an increase in wages, which means that they are particularly impacted by rising housing costs. Cost Burden Housing cost burden in Wake Forest is more prevalent in renter households than homeowner households. However, in both categories, seniors experience a higher likelihood of being cost burdened (Figure 15). Homelessness Wake County's 2021 Point-in-Time-Count, run by the Wake County Continuum of Care, identified 912 individuals in 2021 experiencing homelessness, including those living in a sheltered or unsheltered location – few of which are believed to reside in Wake Forest. Though no specific count is available at a town-level, service providers in Wake Forest, such as Tri-Area Ministry Food Pantry, work to meet the needs of those experiencing homelessness from across the region. Senior households - especially renters - are much more likely to experience cost burden than their non-senior counterparts. THE TAKEAWAY
86%
14% with seniors
WITHOUT SENIORS
All Renter Households
78%
22% with seniors
WITHOUT SENIORS
All OWNER Households
Source: American Community Survey (ACS) 5-Year, 2020
FIGURE 15: HOUSEHOLD COST BURDEN IN WAKE FOREST BY SENIOR STATUS 2020
COST BURDENED
68%
32%
NOT COST BURDENED
All Renter Households
COST BURDENED
48%
52%
NOT COST BURDENED
All Renter Households WITH SENIORS
COST BURDENED
12%
88%
NOT COST BURDENED
All OWNER Households
COST BURDENED
78%
22%
NOT COST BURDENED
All OWNER Households WITH SENIORS
Source: American Community Survey (ACS) 5-Year, 2020
15
EXISTING CONDITIONS: HOUSING
Town of Wake Forest | HOUSING AFFORDABILITY PLAN
EXISTING CONDITIONS: HOUSING
16
EXISTING CONDITIONS: HOUSING
HOUSING AFFORDABILITY PLAN | Town of Wake Forest
Housing Conditions
FIGURE 16: AGE OF HOUSING UNITS IN WAKE FOREST 2020
Wake County’s real estate market is delivering thousands of new housing units each year. Housing Market Overview The majority of new development in Wake County is characterized as “greenfield development”, or the creation of urban and suburban communities in new, largely underdeveloped environments that require the expansion of utility systems, roadways, and related services. Though the majority of these new housing units are owner-occupied, Wake County is seeing an uptick in demand for rental apartments. This uptick is in line with national trends, as home sale prices become increasingly unattainable for middle-income households. This trend can also be observed in Wake Forest. In recent years, home sale prices in Wake Forest have begun to regularly exceed $350,000, or the home price that is roughly affordable for households making 80% of AMI (Figure 17). Thus, a shift is underway in the rental market: higher- earning households that may have opted for homeownership in the past are moving into the rental market and driving prices up for renters as well. The existing housing inventory in Wake Forest is much newer than housing in Wake County and the state (Figure 16). Between 2000-2020, Wake Forest added substantial inventory to keep pace with housing demand. As a result, more than half of homes (65%) have been built since the year 2000. Even in the rapidly developing context of Wake County, only 41% of homes have been built in the same time period. In North Carolina overall, a state that maintains a faster pace of growth than many others, the rate of new housing pales in comparison to Wake Forest, with 28% of housing built since 2000. Consequently, Wake Forest lacks a substantial inventory of older housing, which in many markets serve as a source of naturally occurring affordable housing.
54%
Built Before 1990 Built 1990 - 1999 Built 2000 - 2009 Built 2010 or Later
41%
38%
26%
24%
23%
20% 19%
19%
16%
13%
7%
Wake County
North Carolina
Wake Forest
Source: American Community Survey (ACS) 5-Year, 2020
FIGURE 17: HOME SALE PRICES IN WAKE FOREST 2020-2021
Over $300,000
Under $300,000
Source: Zillow
17
EXISTING CONDITIONS: HOUSING
Town of Wake Forest | HOUSING AFFORDABILITY PLAN
Housing Conditions
FIGURE 18: REGIONAL SHARE OF HOUSING TYPES 2020
Existing Housing Inventory Wake Forest is overwheImingly comprised of single family homes. As of 2020, more than 82% of all residential properties in Wake Forest are single-family homes, with 17% being multifamily. Wake Forest’s housing stock contains a smaller share of multifamily housing than Wake County and North Carolina overall (Figure 18). Despite recent national trends in which single-family homes are increasingly being used as rental properties, the vast majority of single-family homes continue to be owner-occupied (Figure 19).
Single Family Detached Single Family Attached
Multifamily/Multiunit Other
68%
66%
61%
25%
18%
17%
14%
12%
11%
4%
3%
1%
North Carolina
Wake County
Wake Forest
Source: American Community Survey (ACS) 5-Year, 2020
FIGURE 19: WAKE FOREST HOUSING BY TYPE AND TENURE 2020
88%
68%
Single Family Detached Single Family Attached Multifamily/Multiunit Other
THE TAKEAWAY
16% 15%
11%
The Wake Forest housing market has primarily catered to households looking for single family homes, and the Town contains a much smaller share of multifamily housing units than Wake County as a whole.
<1% 1%
<1%
Owner Occupied Units
Renter Occupied Units
Source: American Community Survey (ACS) 5-Year, 2020
18
EXISTING CONDITIONS: HOUSING
HOUSING AFFORDABILITY PLAN | Town of Wake Forest
Housing Conditions
FIGURE 20: SHARE OF HOUSING UNITS BY NEW DEVELOPMENT TYPE IN WAKE FOREST 2016-2020
New Development New housing development in Wake Forest is occurring rapidly, and the type of housing being built is evolving. Among the units newly developed from 2016 to 2020, 70% have been single-family homes, 15% have been townhomes, and 15% have been multifamily homes (Figure 20). Between 2016 and 2020, a slightly greater share of housing built was a townhome typology (15%) than currently exists in Wake Forest's housing inventory overall (14%, per Figure 18). This shift reflects both increased demand for townhomes by homebuyers and land use changes that allow for more diverse housing types. When accounting for planned developments in the pipeline, Wake Forest’s housing inventory will increase to approximately 24,577 units by 2030 (Figure 21). Looking at the past 5 years alone, the Town of Wake Forest has certified the construction of 524 new multifamily units, 778 single-family attached units, and 2,830 new single-family units since 2016, increasing the total housing stock by 41%.
70%
15%
15%
Single Family Detached
Single Family Attached
Multifamily
Source: Town of Wake Forest Planning & Inspections Department
FIGURE 21: HOUSING UNIT DEVELOPMENT IN WAKE FOREST 2000-2030
THE TAKEAWAY
The character of Wake Forest’s housing stock, albeit relatively young, has diversified in recent years as more single-family attached, or townhome, units are being built.
2000
2010
2020
2030
(Projected)
Source: Town of Wake Forest Planning & Inspections Department
19
EXISTING CONDITIONS: HOUSING
Town of Wake Forest | HOUSING AFFORDABILITY PLAN
Housing Conditions
Multifamily Housing Multifamily rental housing built before 2000 has a more moderate price point, but the supply of this rental housing is limited. Below are three examples of existing multifamily developments that were built before 2000.
FIGURE 22: MULTIFAMILY DEVELOPMENTS IN WAKE FOREST BUILT BEFORE 2000
A
200 McDowell Dr "200 McDowell Dr" 111 Units Built in 1998
B
133 North Allen Rd "New Hope Village" 92 Units Built in 1974
C
1760 Pasture Walk Dr "Caveness Farms Apts" 288 Units Built in 1997
Source: CoStar
Below are four examples of upcoming multifamily developments.
FIGURE 23: UPCOMING MULTIFAMILY DEVELOPMENTS IN WAKE FOREST AS OF EARLY 2022
A
601 Gilcrest Farm Road "Hawthorne at Traditions" 272 Units (Proposed)
b
Heritage Lake Road "Legacy Heritage Apartments" 306 Units (Under Construction)
1891 S. Franklin Street "Greenway Village at Heritage" 182 Units (Proposed)
c
457 Stone Monument Drive "Palisades at Wake Forest" 188 Units (Under Construction)
d
Source: CoStar
20
EXISTING CONDITIONS: HOUSING
HOUSING AFFORDABILITY PLAN | Town of Wake Forest
Housing Conditions
Rent Growth Rents for all rental housing have been increasing steadily across the Research Triangle region (32% from 2015 to 2021, per Figure 24), in particular since the start of the COVID-19 pandemic. From 2020 to 2021 alone, rents increased by about 15%. Rent increases in the region are consistent with national trends. Rents rose across the country as interest rates fell, supply chains were disrupted, and many people looked to relocate due to remote work. At the same time, new housing construction was disrupted, contributing to stagnating supply. The simultaneous increase in demand and stagnant housing supply resulted in rent increases. This rent growth has further reduced the supply of housing available to low-income households. For example, a household earning $40,000 can afford rent up to about $1,000 per month. Between 2010- 2020, Wake Forest added 2,152 homes that rent for more than $1,000 per month, while the number of homes renting below $1,000 per month only increased by 311 units (Figure 25).
FIGURE 24: MEDIAN RENT IN WAKE FOREST 2015-2021
COVID-19 PANDEMIC MARCH 2020
$1,800
APEX WAKE FOREST MORRISVILLE RALEIGH
$1,700
$1,701
$1,600
$1,475
$1,500
$1,400
CARY
$1,300
$1,286
$1,200
$1,100
$1,000 2015 2016 2017 2018 2019 2020 2021
Source: Zillow
FIGURE 25: CHANGE IN RENTAL UNITS IN WAKE FOREST 2010-2020
+311
+2,152
1,304
2010 2020
997
888
806
795
768
610
510
274
154
115
97
74
12
THE TAKEAWAY
Less than $600
$600 to $799
$800 to $999
$1,000 to $1,249
$1,250 to $1,499
$1,500 to $1,999
$2,000 or More
Rents were steadily increasing before the COVID-19 pandemic, but the median rent in Wake Forest has jumped over $200 in the past two years alone.
Source: American Community Survey (ACS) 5-Year, 2010 2020
21
EXISTING CONDITIONS: HOUSING
Town of Wake Forest | HOUSING AFFORDABILITY PLAN
Housing Conditions
FIGURE 26: MEDIAN SALES PRICE IN WAKE FOREST 2015-2021
Sales Price As with rental housing, the COVID-19 pandemic exacerbated rising costs for for- sale housing. In particular, for-sale homes with more square footage and open space witnessed unprecedented demand in Wake Forest and the Research Triangle region. Home prices increased 61% between 2015 and 2021 in Wake Forest, with a 26% increase in prices since the onset of the COVID-19 pandemic (Figure 26). The median home price in 2021 was $427,000, up more than 51% since 2015. While new homes overall sell at an 11% premium, prices of older homes (built before 2010) have risen faster than that of new homes (Figure 27). Since the end of 2020, new homes have increased in value by about 9% while older homes have increased in value by about 24%. $513,204 Average Sale Price of a New Home in Wake Forest 2021 $462,774 Average Sale Price of an Older Home (pre 2010) in Wake Forest 2021
COVID-19 PANDEMIC MARCH 2020
$500K
APEX
WAKE FOREST MORRISVILLE RALEIGH CARY
$427K
$400K
$339K
$282K
$300K
$200K
$100K
2015 2016 2017 2018
2019 2020 2021
Source: Zillow
FIGURE 27: AVERAGE SALES PRICES OF NEW AND OLDER HOMES IN WAKE FOREST 2015-2021
$550K
New Homes $513,204
COVID-19 PANDEMIC MARCH 2020
$500K
$450K
Older Homes $462,774
$400K
$350K
$300K
THE TAKEAWAY
$250K
2015 2016 2017 2018 2019 2020 2021
2021
The Wake Forest housing market has primarily catered to households looking for single family homes, and the Town contains a much smaller share of multifamily housing units than Wake County as a whole.
Average Price of Homes Built Before 2010
Average Price of Homes Built After 2010
Source: Zillow
22
EXISTING CONDITIONS: HOUSING
HOUSING AFFORDABILITY PLAN | Town of Wake Forest
Housing Conditions
FIGURE 29: HOME VALUES FOR ALL OWNER- OCCUPIED UNITS 2020
Home Value Growth Today, the median home value among all owner-occupied homes in Wake Forest is $314,000, higher than the median values for Wake County and North Carolina overall (Figure 28). Almost half (47%) of owner-occupied homes in Wake Forest are valued between $300,000 and $499,000 (Figure 29). Rising homes values can lead to greater wealth for existing homeowners. However, rising home values also create a barrier to entry for low- and moderate-income households to become homeowners. Of all homes sold between 2020-2021 in Wake Forest, only 26% were below $300,000, the threshold for affordability for a median-income renter seeking to transition to homeownership (Figure 30).
47%
North Carolina Wake County Wake Forest
38%38%
37%
35%
22%
17%
17%
11%
7%
6%
5%
5%
5%
4%
3%
3%
2%
Less than $100,000
$100,000 to $149,999
$150,000 to $299,999
$300,000 to $499,999
$500,000 to $749,999
$750,000 or More
Source: American Community Survey (ACS) 5-Year, 2020
FIGURE 28: MEDIAN HOME VALUE FOR ALL OWNER-OCCUPIED HOUSING UNITS
FIGURE 30: SHARE OF HOMES SOLD IN WAKE FOREST BY PRICE POINT 2020
2015
2020
$155k
$182k $302k $314k
29%
Homes sold for more than $300,000 are shown in teal, unaffordable to the median-income renter at the time of this writing.
North Carolina
22%
$234k
20%
Wake County
11%
$267k
5%
5%
4%
3%
Wake Forest
1%
THE TAKEAWAY
Home values are higher in Wake Forest than in Wake County or North Carolina overall.
Source: Zillow
23
EXISTING CONDITIONS: HOUSING
Town of Wake Forest | HOUSING AFFORDABILITY PLAN
Housing Needs
FIGURE 31: RENTER HOUSEHOLDS IN WAKE FOREST BY INCOME AND DEGREE OF COST BURDEN 2020
Based on data analysis, community engagement, and stakeholder feedback, Wake Forest’s most pressing housing needs fall into three major categories: rental affordability, access to homeownership, and displacement pressure - all disproportionately impacting Black, lower-income, and older Wake Forest residents. Rental Affordability Among the 4,701 renter households in Wake Forest, over 30% are cost burdened and almost 12% are severely cost burdened. The vast majority of renters making less than $20,000 per year pay more than 50% of their income in rent (Figure 31). Single-parent and senior households both face disproportionate rental cost burdens. By comparison, among the 11,033 households that own their homes, 12% are cost burdened (Figure 32). Access to Homeownership The majority of Wake Forest residents are currently homeowners. However, housing cost burden for almost every category of resident increased in the past 5 years, with cost burdens for Black homeowners increasing by 24% (Figure 35). Senior homeowners are also particularly cost burdened, making it difficult for them to age in-place. Even if households can afford their rent or mortgage, they may struggle to pay other crucial housing costs, such as property taxes, home repairs, utilities and insurance.
1,189
Not Cost Burdened Cost Burdened Severely Cost Burdened
750
672
456
350
348
314
218
198
94
58
24
19
0
11 0
0 0
Less than $20,000
$20,000 to $34,999
$35,000 to $49,999
$50,000 to $74,999
$75,000 to $99,999
$100,000 or More
Source: American Community Survey (ACS) 5-Year, 2020
FIGURE 32: HOMEOWNER HOUSEHOLDS IN WAKE FOREST BY INCOME AND DEGREE OF COST BURDEN 2020
6,660
Not Cost Burdened Cost Burdened Severely Cost Burdened
1,335
1,118
403
264
237
158 150140
143
105
95
84
44
30 67
0
0
Less than $20,000
$20,000 to $34,999
$35,000 to $49,999
$50,000 to $74,999
$75,000 to $99,999
$100,000 or More
24
Source: American Community Survey (ACS) 5-Year, 2020
EXISTING CONDITIONS: HOUSING
HOUSING AFFORDABILITY PLAN | Town of Wake Forest
Housing Needs
FIGURE 33: HOMEOWNERSHIP RATE IN WAKE FOREST BY INCOME LEVEL 2015-2020
Across most income levels, homeownership rates are decreasing (Figure 33). The only exception to this trend being households earning less than $20,000, likely due to an influx of retirees who earn fixed incomes. While decreasing homeownership rates can be partially attributed to personal preferences, surging costs are pushing some households out of the housing market. Today, the gap between the median renter income in Wake Forest and the income required to own the median-priced home is about $25,000 and widening (Figure 34). Homeownership is increasingly out of reach for first-time homebuyers, which can negatively impact the ability of those households to build wealth over time. Displacement Pressure Soaring cost and insufficient housing supply can lead to displacement of existing residents. Housing displacement refers to forced or involuntary movement from a household’s place of residence. Forced Displacement: When a move is spurred by a physical or legal force that compels a household to vacate their home. Residents may be forced out by lease non- renewals, evictions, foreclosure, or natural disasters. Pressured Displacement: When a household leaves their home because remaining is untenable. Residents may move because of housing cost burdens, poor housing quality, or unsafe neighborhood conditions.
2015 2020
94%
85%
79%
76%
65%
61%
60%
47%
41%
38% 40%
25%
$20,000 to $34,999
$35,000 to $49,999
$50,000 to $74,999
$75,000 to $99,999
$100,000 or More
Less than $20,000
Source: American Community Survey (ACS) 5-Year
FIGURE 34: INCOME AT WHICH MEDIAN HOME IS AFFORDABLE IN WAKE FOREST 2015-2020
$115,908
$120,000
$101,719
$100,000
$80,000
$80,000
$65,000
$56,868
$60,000
$41,116
$40,000
2015
2016 2017
2018
2019 2020
Median Renter Income
Median Owner Income
Income Required for Median Home
Source: Zillow, American Community Survey (ACS) 5-Year
25
EXISTING CONDITIONS: HOUSING
Town of Wake Forest | HOUSING AFFORDABILITY PLAN
Housing Needs
FIGURE 35: CHANGE IN OWNER COST BURDEN BY RACE AND ETHNICITY IN WAKE FOREST 2015-2019
Wake Forest is currently seeing isolated instances of displacement but is at risk of greater displacement. Forced displacement has occurred in isolated incidents, such as in the sale and pending re-development of Wellington Park, Wake Forest's only mobile home park. As undeveloped land is increasingly unavailable in Wake Forest, developers will look to purchase land that can be re-developed, which often contains older housing stock that is not covered by a historic district. Pressured displacement is at risk of occurring for older homeowners and long-term residents who are experiencing growth in property taxes and are often living on fixed incomes. Based on the findings of the assessment and the community survey, there are two household groups who may be at risk of displacement if market pressure continues to build without affordable housing options: low-income renters facing severe housing cost burden (Figure 31), particularly senior renters; and senior homeowners, particularly Black senior homeowners. Black homeowners in general are facing a faster rate of cost burden increase (24%), which can lead to pressured displacement (Figure 35).
As owner cost burden increases, it is more likely that households will be forced to leave for more affordable housing options.
24%
17%
9%
3%
White
Black
Asian
Hispanic
Source: American Community Survey (ACS) 5-Year, Public Use Microdata (PUM)
FIGURE 36: WAKE FOREST PUBLIC SURVEY RESPONSES 2021
Public survey results help illustrate the racial disparity in the housing market: Share of survey respondents who struggle to find housing in the neighborhood they want to live in: 35% 63% WHITE RESPONDENTS BLACK RESPONDENTS VS.
THE TAKEAWAY
Rental affordability, access to homeownership, and displacement pressure are the three major challenges facing the Wake Forest housing market. All three challenges disproportionally impact Black, lower income and older Wake Forest residents.
Source: Wake Forest Housing Affordability Plan Public Survey
26
EXISTING CONDITIONS: HOUSING
HOUSING AFFORDABILITY PLAN | Town of Wake Forest
Barriers to Housing Affordability
Wake Forest faces a set of key barriers to addressing long-term housing affordability. This Plan presents a range of strategies and tools to address these barriers. Competition with Higher Income Households As of 2021, the four most common jobs in Wake Forest paid wages below $76,000, which is the Raleigh Metro Area's median income for a household of four, according to the U.S. Department of Housing and Urban Development. Meanwhile, the four fastest growing occupation sectors in the region earn more than the average current wage in Wake Forest. Higher income households moving in to Wake Forest can bid up the costs of existing housing when supply is not keeping up with demand, which makes it difficult for moderate and low-income households to compete. Limited Affordable Housing Options Despite growth in housing inventory, Wake Forest’s supply of housing has not kept pace with demand at diverse price points. The Town is losing affordable entry- point homes, or “starter homes”, for new owners, which often include young families. Adding to this issue, new housing production has been almost entirely market-rate, serving new renters and owners with higher incomes. Wake Forest has 1,641 existing subsidized rental housing units to serve low-income households, according to the
National Housing Preservation Database. The inventory of affordable housing units is generally older in Wake Forest (Figure 37). Crenshaw Trace, a 36-unit, income- restricted property for seniors, was completed in late 2021 and is the first subsidized development added since 2016. Development Barriers The central cost drivers for new housing is construction costs, including the cost of land. The costs to build housing have continued to rise at a quicker pace in the Triangle than most regions nationally. Rising housing costs pose a challenge for households on fixed incomes, such as seniors or single-parent households. The Town does not currently offer specific, clearly defined incentives or requirements for developers who are interested in including affordable units in their developments, which means that the Town may miss opportunities to increase the affordable housing inventory through new development. Additionally, market demand for certain amenities, such as parking, increase the cost to build housing, which is largely unavoidable in a town that has limited public transit options.
THE TAKEAWAY
Competition with higher income households, limited housing supply, and hindrances to development are key barriers to affordable housing.
FIGURE 37: EXISTING AFFORDABLE RENTAL HOUSING SITES IN WAKE FOREST
755 S White Street "Turnberry Apartments" Section 8 vouchers 40 units built in 1996
1887 S Franklin Street "Huntington Spring" 9% Low Income Tax Credits 86 units built in 2016
1950 Branch River Way "Heritage Crossings" 4% Low Income Tax Credits 120 units built in 2005
Source: National Housing Preservation Database (NHPD)
27
COMMUNITY ENGAGEMENT
Town of Wake Forest | HOUSING AFFORDABILITY PLAN
COMMUNITY ENGAGEMENT
28
COMMUNITY ENGAGEMENT
HOUSING AFFORDABILITY PLAN | Town of Wake Forest
Planning Context
The Housing Affordability Plan builds on the housing needs captured in previous planning efforts, including the 2021 Northeast Community Plan. Overview Planning efforts, findings, and recommendations established in Wake Forest. The following past planning efforts shaped policies and goals that informed this Plan, including:
The Northeast Community Plan (2021) The Northeast Community was established by formerly enslaved African Americans after the Civil War and remains predominantly Black today. The Plan for the historic Northeast Community studied the 315-acre district’s plateauing population in comparison to Wake Forest’s rapid growth as well as the area’s declining share of Black households. Despite these challenges, the Plan highlights that this area remains relatively affordable with its smaller home sizes and older housing stock. The Town engaged leaders from the Northeast Community to incorporate their insight into this Housing Affordability Plan. Among its recommendations, the Plan sought to provide a variety of affordable housing options (ownership and rental) created via new and infill residential developments, identify opportunities for commercial development along North White Street, and build the community’s capacity for economic stability. Its future land use goals promote sustainable urban growth opportunities and target areas nearest downtown for medium-density housing, commercial development, and mixed uses. This Housing Affordability Plan included engagement with multiple stakeholders within the Northeast Community including homeowners, renters, community leaders and advocates. Participants expressed concerns about rising rents, property taxes, and displacement pressures, which resonated with the experiences of seniors and non-white communities across Wake Forest.
• Community Plan (2022) • Northeast Community Plan (2021)
While each of these plans provide critical policy recommendations directed at improving the Town’s housing affordability, the Northeast Community Plan elaborates in more depth on the serious displacement pressures being felt by the Town’s largest African American neighborhood. Community Plan (2022) The Community Plan includes sustainable growth strategies with a focus on providing open space and preserving Wake Forest's small town character. The Plan recognizes the need for mixed uses that promote active residential areas and downtown growth, including transit- supportive residential development. The Residential Areas Plan specifically highlights nine areas with opportunities to increase the diversity of housing types in Wake Forest, particularly in infill development areas.
29
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