Dire shortage of Affordable Housing Presents "Existential" Issue to City, County Leaders

As housing prices soar and wages stagnate, large swaths of the county workforce struggle to find shelter and feel marginalized by the community they serve.

“The rents around here are psychotic,” said Janet Klepps, 44, pictured outside her apartment in Brevard.

By Dan DeWitt

Brevard NewsBeat

BREVARD — For more than a year, since the death of the mother she lived with and cared for, Diana Valencia has “bounced around” to keep her family sheltered, she said.

Valencia and her teenage son and daughter spend some nights with friends. On weekends they drive to Georgia to stay with Valencia’s older daughter and “my grandbabies,” she said. Back in Brevard, they squeeze into a two-bedroom apartment rented by her daughter-in-law, who makes room for them by sleeping in one room with her two young children while Valencia bunks on the couch.

The wage Valencia earns as a school cafeteria worker is low enough to qualify her for federal housing aid, but a housing voucher she had received in the fall expired in January because it didn’t come close to covering the cost of market-rate apartments. She has joined the long lines of residents seeking units at low-income complexes but has no idea when her name might be called.

She hates to burden relatives, and it pains her to see her children grow up without enough space to hang out with friends or take remote classes.

“They just can’t be comfortable anywhere we stay,” said Valencia, 48. Despite suffering from diabetes and arthritis, she is thinking about looking for a second job.

“I’m stuck between a rock and a hard place and struggling through it, and I'm stressed out every day of the week because of it.”

The lack of affordable housing Valencia struggles with is a widespread problem and, in Transylvania County, a perennial one. But by most measures it is worse here than elsewhere in the region and worse now than ever.

The county’s median home price, driven by the shortage of buildable lots and high demand from wealthy out-of-county buyers, soared to nearly $360,000 in 2020, up $108,000 from two years earlier, according to a year-end report by a regional real estate firm. More than 900 of the rental houses that might have once been an option for workers are occupied at least part of each year by short-term visitors.

Market-rate apartments are scarcer and pricier here than in Henderson or Buncombe counties, and far beyond the budgets of the county’s many service-industry workers, according to a 2020 city of Asheville regional housing report.

Unaffordable housing blocks the once well-traveled path to financial security — home ownership — and forces long commutes that clog roads, cut into family time and separate public employees from the communities they serve.

It burdens businesses, schools and law enforcement agencies that struggle to attract and retain employees. It represents a potentially major obstacle to luring future enterprise. And, said Aaron Baker, it threatens the economically diverse, welcoming quality that Transylvania is known for.

“This really is an existential question for city and county leaders, about what we want to look like in 20 years,” said Baker, senior marketing manager for Brevard’s Oskar Blues brewery. Though he was speaking for himself, not the company, he said, housing prices are the main reason only 40 percent of his 110 coworkers live in Transylvania.

“The way we’re trending, it’s going to be a place where only the wealthy can afford to live. Many of those people are close to retirement or in retirement, and that means the vast majority of people working in retail, in restaurants and breweries — all those things that people enjoy — will be living outside the community.”

Sky-high Housing Costs, Skimpy Wages

Affordability, obviously enough, is determined by both income and housing costs, and Transylvania’s $57,300 median household income is about $15,000 lower than in the Asheville metro area, which includes Henderson and Buncombe, according to the federal department of Housing and Urban Development.

But the figure for Transylvania includes the incomes of remote workers and retirees. Large numbers of people employed in the county would have a hard time making that much money unless they are in two-income households, according to the most recent report from the state Department of Commerce.

The three largest employment sectors are restaurant and accommodation, which pays an average of about $24,000 annually; retail, which pays about $29,000; and health care and social assistance, where the average annual salary is about $40,000, the report says.

The Asheville housing study, completed in 2020 by Ohio-based Bowen National Research, found a median list price for homes in Transylvania of $399,000, slightly lower than in those more urban countries, but far out of reach for most workers.

HUD defines affordable housing as consuming 30 percent or less of household income. Factoring in the cost of property taxes and insurance, and assuming a 10 percent down payment, families earning $60,000 should pay no more than $200,000 for a home, said Bowen president Patrick Bowen. His company’s report, meanwhile, found that only 10.5 percent of houses for sale in Transylvania listed for less than that amount.

Those prices push residents into a rental market rate so tight that only 17 percent of county residents who were issued a federal Housing Choice Voucher in the past six months were able to find a place to use them.

“The rents around here are psychotic,” said Janet Klepps, 44, a Head Start teacher who lives in an income-restricted apartment complex in Brevard.

The median, monthly market-rate rent for the apartments in the county was $1,200 for one-bedroom apartments and $1,500 for two-bedroom units — in both cases more than $200 higher than in Henderson, the Bowen report said.

It found only one opening among the market-rate apartments it examined in Transylvania and an overall vacancy rate of .1 percent, compared to 2.1 percent in Henderson and 3.5 in Buncombe. That rate in Transylvania includes subsidized and income-restricted complexes, which were not only fully occupied, the report said, but maintained waiting lists up to 50 names long.

In a presentation to Brevard City Council last month, Assistant City Planning Director Aaron Bland reported finding lower prices and more availability of housing in the city than the Bowen study did countywide. 

But he also highlighted that report’s finding of zero vacancy in low-income developments.

“If that doesn’t show there’s a need, I don’t know what does,” he told the Council.

Development Headwinds

It’s not a need that can be filled by for-profit builders, at least not without government help, said Travis Fowler, president of First Victory Inc.

His construction company is one of the few in the county specializing in building rental units, including a complex of 18 apartments taking shape off Caldwell Street in Brevard. But the list of obstacles to making market-rate units affordable to workers is long and daunting, he said.

Floodplains, steep slopes, limited utilities and public ownership of large tracts of land leave a chronic shortage of buildable lots in Transylvania. The cost of building materials has soared, and construction workers must be lured from lucrative jobs in Asheville or Greenville, SC.

He competes for this labor and land with builders of homes in a market attractive to retirees and, increasingly, well-heeled remote workers from affluent regions around the country. A $400,000 house, Fowler said, can look like a bargain to a prospective buyer who has just sold an $800,000 home in Connecticut.

Because of these “headwinds,” he said, builders can secure financing only for projects with rents priced near the top of the market for workforce housing — usually defined as accessible to residents earning between 80 and 120 percent of the median household income. The two-bedroom, two-bathroom apartments in Fowler’s new complex will rent for $1,650 a month, not including utilities, he said.

“There’s a huge number of people out there who happen to be more vocal who would really like to pay $800 a month for an apartment, but that’s just not attainable with the costs of materials and labor,” Fowler said.

The First Victory project under construction in Brevard

Federally backed developments face these hurdles and more, said Joy Strassel, executive director of the non-profit Western North Carolina Housing Partnership, which specializes in building apartments with the help of federal low-income tax credits.

These credits can cover more than 60 percent of construction costs, not including land, in exchange for offering average rents affordable to families earning less than 60 percent of the county median income.

But such projects must be connected to water and sewer lines and, in the highly competitive process of awarding tax-credit packages, are graded on accessibility to services such as shopping, education and health care. 

That narrows siting options to parcels in or near Brevard — multi-acre parcels, in fact, because tax-credit developments usually need several dozen units to achieve economic feasibility.

These challenges help explain why only two such complexes have been completed in the city in the past decade and why, Strassel said, her organization has never been able to build in Transylvania despite the obvious demand.

“We just haven’t found anything (in the county) that could work,” she said.

Yet Another Hurdle

“I would add one other obstacle,” said Tore Borhaug. “Nobody wants such housing in their backyard.”

Borhaug, owner of the Tore’s Home assisted living facility, last year received approval from Brevard to build 40 independent-living duplexes for elderly residents and an additional 80 to 105 apartments. The income from his clients will allow him to offer some of the units to employees as part of their benefit package, while he hopes to make the remainder accessible to workers such as law enforcement officers and teachers.

But the residents of the nearby, upscale Deer Lake Village subdivision fought to stop the project, even though such affluent residents depend on the services workers provide, Borhaug said. “So there is a contradiction in terms there.”

This opposition is not only unjust, but based on the “crazy perception” that income-restricted housing serves mostly unemployed and troubled residents, said Paul D’Angelo, Asheville’s community development program director.

As housing costs have far outpaced wages in recent decades, more and more residents of these complexes, he said, are working people “who are contributing to the community or retirees who have a lifetime of contributing.”

Pushed Aside

Adam Poe, 43, said he wants to buy a home, but cannot come close to affording one.

As housing prices soar beyond their reach, such workers in Brevard say they feel squeezed out by the community where they are employed.

Saleem Lintz, 27, is a third-shift cook at Waffle House and his fiancee helps manage her father’s pizza restaurant. They lived in a camper for six months with their two young sons while waiting for a vacancy at Mountain Glen Apartments, an income-restricted apartment complex near Brevard High School.

Their two-bedroom apartment suits their needs for now, but the high price of homes and rentals has them thinking of a future outside of Transylvania.

“It hasn’t been decided, but it’s in the air now that we’re going to move back to Florida,” Lintz said. This is partly to live closer to his mother, he said, “but, honestly, half of it is because we can’t find housing here.”

Klepps, raising three children as a single mother, pays about $700, not including utilities, to rent a two-bedroom Mountain Glen apartment “that barely meets our needs,” she said.

“I’ll probably try to buy something in the next few years, but the home prices are so expensive here that you’ve got to wonder whether you want to stay in the area or look to someplace like South Carolina, where you get a lot more for your money.”

Adam Poe, 43, rents a one-bedroom apartment at Morgan Manor built in 1979 — the only market-rate rental he could afford with his salary as an attendant at a county solid waste station.

Though he earns slightly more than the county’s per-capita individual income — $29,500 according to the most recent estimate by the U.S. Census Bureau — the shortage of housing forced him to live with his mother as he waited for a vacancy.

He has given up hope of buying a house in Transylvania for himself and his daughter, who lives with him part time, he said.

“It will never be in my price range, not even close.”

Costing a “Fortune”

The strain caused by unaffordable housing extends far beyond the budgets of these workers.

When families pay more than the 30 percent affordability threshold for rent — about half of the families in Transylvania, Bland said — “their money is going just to live,” D’Angelo said. “They are not supporting stores and restaurants; they are not supporting the local economy.”

Cities with high housing prices have long recognized that education suffers when teachers who are forced to commute become less accessible to and invested in the communities where they work. And the need to find affordable housing is “by far the major reason” that nearly a quarter of Transylvania County Schools’ teachers live outside the county, said Superintendent Jeff McDaris.

The Transylvania County Sheriff’s Office, meanwhile, spends at least $38,000 to train and equip new deputies, said Chief Deputy Eddie Gunter. When they commute, these freshly hired officers naturally look for positions that allow them to serve their home communities, avoid time on the road and, in many cases, earn more money.

“Once they get out of the training program, the neighboring agencies are plucking these people away like crazy,” Gunter said.

Commutes also cost Borhaug, who provides a van to shuttle out-of-county workers to and from his assisted living facility every day.

“It’s costing me a fortune,” said Borhaug, who also bemoaned the risk and expense of planning his new mixed-use project. He has taken these on, he said, because the lack of affordable housing is driving a critical shortage of eldercare workers for the county’s large and aging population of retirees.

“It is a perfect storm that is brewing, quite frankly,” he said. “I am scared to think about what will happen when the baby boomers need care.”

Transylvania County Chamber of Commerce Executive Director Clark Lovelace also worries about the future impact of high housing costs, which he said could stifle the county’s attempts to attract new investment.

But he also sees its current drag on chamber members, who consistently rank the lack of affordable housing as a top concern in the chamber’s annual survey, he wrote to the city in a letter of support for Borhaug’s development.

“Our goal is to be sure that you consider the collective voice of the local business community. In this case it is simply stating, ‘please look for and take action on any possible opportunities to address the lack of affordable workforce housing whenever you can.’ ”

How They Do It In Asheville

Addressing the lack of affordable housing is basically D’Angelo’s job description, he said.

He oversees an incentive program that focuses on encouraging mixed-income projects, with at least 20 percent of the units affordable to families earning less than 80 percent of the local median income. 

This model not only serves these residents, but addresses the overall shortage of rentals and blunts the public opposition provoked by traditional low-income projects.

The 319 Biltmore project, for example, will contain 250 total units, as many of 90 of them for families earning less than the 80-percent income threshold. It is planned for a 5.3-acre plot between an existing affordable housing complex and Mission Hospital.

“So, hey, if there are some EMTs (emergency medical technicians) or CNAs (certified nursing assistants) who can live there and walk to work, wouldn’t that be great?” he said.

Some of the incentives Asheville offers to mixed-use projects might work in smaller communities, he said, including discounts on sewer-line connections, forgiveness for permitting fees, property-tax abatements and density bonuses that allow developers of mixed-income complexes to pack more units on each acre of land.

He also acknowledged that one incentive might not work for Transylvania or Brevard. Asheville voters passed a bond issue in 2016 that added $25 million to its affordable housing trust fund. The cost of buying and improving land for the Biltmore project, D’Angelo said, “comes to about $7 million.”

Will Leaders Act?

Brevard and Transylvania have long supported affordable and workforce housing, their leaders say, efforts that date back to at least the city’s Focus 2020 project that was launched in the late 1990s and encouraged the construction of several income-restricted apartment complexes.

Recent or ongoing actions in the city include working with the developer of a proposed tax-credit housing project off Rosman Highway, and the sale last year of 2.5 acres off Cashiers Valley Road, where a Hendersonville-based organization will build six houses for low-income buyers, defraying costs with federal home-buying aid and the future residents’ own labor.

The city has also applied for a federal grant to extend sewer lines that will serve a neighborhood of homes with failing septic systems and open up land for potential apartment complexes.

The county has worked hard, if unsuccessfully, to boost the inadequate amount of Housing Choice Vouchers and has offered its former landfill site off Old Rosman Highway at a nominal lease price for workforce and affordable projects, said County Manager Jaime Laughter.

But it’s not enough, said longtime affordable housing advocate Claudia Hawkins. City and county leaders need to look at incentives used by Asheville and other communities and come up with a focused long-term strategy, she said.

“Changing zoning rules, providing incentives . . . buying land if you don’t have it already. You might choose to only do some of these things,” she said. “But let’s have a plan.”

Elected officials interviewed for this story all said they understand the need for more low-income and workforce housing and are all on board with the idea of teaming up to make it happen.

“We need to walk this path together,” said Brevard Mayor Pro Tem Mac Morrow.

They agree less on how much land and/or money local governments should contribute to an effort that already receives large federal subsidies.

A proposal for the landfill site, for example, fell through because a developer requested an additional $1 million in site improvements.

“The county does not have a funding stream to support projects at that level,” Laughter wrote in an email.

In 2017, the city targeted county-owned land near the Transylvania County Public Library as a potential site for workforce housing. But the idea fizzled in talks with county leaders, Morrow said. “We were disappointed we couldn’t carry those conversations any further.”

Commission Chairman Jason Chappell said he doesn’t remember discussing the library property, but said it’s currently used for employee parking and is one of the few viable sites for a future downtown courthouse.

“We can’t give away all our land,” he said.

Morrow, meanwhile, balked at the discounts for sewer hookups that another council member, Maureen Copolof, said she wants to consider. These would place the burden for bringing in new low- and middle-income residents on existing customers in those same categories, he said.

“I'm not ready to open the door to the giveaway program.”

Is It Really That Bad?

Morrow also doubts that the price of housing is quite the problem it’s cracked up to be. Recently hired city workers have all been able to find accommodations, he said, and he named several modestly priced, available rental properties in the city.

“I can tell you, I can find a rental right today if I have a job,” he said. “But if you look at social media, you’d think the world is falling.”

You might get that same impression from Sonya Flynn, senior housing specialist with Western Carolina Community Action, who spends her days trying to place low-income residents in housing they can afford.

Her clients include disabled and elderly people, she said, and workers such as a single mother who puts in more than 45 hours a week at three jobs to bring in $24,000 a year.

Flynn watches these residents grow discouraged lingering in homeless shelters or makeshift living arrangements as they wait for Housing Choice Vouchers and for openings in low-income complexes. She sees a lot of them give up hope and leave the county.

“I wish every day we had more money to work with and I wish we had more property that is affordable,” she said.

“But the reality is, it’s just not there.”