Thursday, October 17, 2019
EconomyOuter Banks

Lack of workforce housing hurts OBX economy, leaves residents in the lurch

Low wages and costly housing are driving away students seeking summer employment here and making it nearly impossible for residents to live. NC legislators cut $1,000,000 in funding for development. Towns now need to address the problem.

The lack of workforce housing in the Outer Banks has many possible solutions, but they all start at the same place—with a living wage. Paying $15/hr. is a good start but hardly the only solution necessary. Even a $20/hour wage does not provide enough money to support home ownership in Dare County. However, ownership is not the only answer to affordable housing, and $15/hr. for year-round, full-time employment does start to put a person in the market for a year-round rental.

Many successful businesses do pay a living wage. Monica Thibodeau, managing partner at Carolina Designs and former candidate for County Commissioner, was asked what effect a $15 minimum wage would have on her business. “No effect,” she replied. “We already pay all our employees more that than.”  To compete in the tight labor market on the Outer Banks, businesses that want to hire the best employees pay above minimum wage, well above. Those businesses are successful in part because their employees are focused on their jobs and not on putting a roof over their heads.

Many businesses are also successful at recruiting students to work in the summer. The towns, for example, hire significant numbers of lifeguards. They do it by paying a good wage, helping the students find housing, and actively recruiting on campus. They hire responsible, highly trained employees and keep them coming back year after year. If other businesses follow that practice, then they, too, should be successful. It should be noted that Harris Teeter and some other local businesses follow a similar practice in hiring foreign students. They actively recruit and help with housing. I can’t speak to the company’s wages.

Other factors are at play here. As college costs have risen, the percentage of students working here during the summer has declined. A summer job at the beach no longer yields a hefty supplement to college costs, especially if the job comes with low wages and high housing costs.  Students are opting to take summer classes to shorten their enrollment or internships that provide a path to future employment.

Year-round workforce housing in Dare County is a different problem—one that can’t be solved through higher wages alone, though that would be a start. Solving the problem requires government action and possibly investment. No one doubts, and the last housing study by the Outer Banks Community Development Corp. shows, that wages on the Outer Banks do not provide enough income to support the purchase of even a starter home here. It’s going to get worse, too. The OBCDC has had to close its doors due to NC legislators cutting $1,000,000 in funding for community development groups—a way to punish mostly poor and minority communities.

The disconnect is driven by the summer rental housing market, and the solution lies in government intervention in that market. Dare County and Kill Devil Hills have adopted ordinances that provide density increases for projects that allocate a share of their units for affordable housing. Both ordinances have seen one project built, and both projects saw low demand for units. That is partly due to restrictions on the resale of the homes. The ordinances require the homes’ costs remain in the affordable range. This protects the stock of affordable housing. You can’t flip an affordable unit into the summer rental market.

To resolve the problem, government will have to do one of two things. It must either require the creation of affordable housing to balance summer rental construction or enter the market with subsidies, or better incentives, to encourage creation of affordable housing units. This applies to both home ownership and affordable rentals. Construction of the latter is perhaps the quickest way to provide workforce housing units.

So what are the real-world answers? Here’s two:

1.  Land on the beach or Roanoke Island is too expensive and in short supply, but Dare County owns a large tract on the mainland. This would be a good place to start. The county could lease parcels to developers to build affordable rental units. Both townhomes and individual homes could be built on this property, but rental housing is where I would start.

2.  The towns and the county should loosen restrictions on accessory dwellings and “granny flats.” Many homes in Dare County have an undocumented apartment tucked underneath or in the back. You probably know of such units in your neighborhood. These spaces are generally unpermitted and unregulated. With proper design of the zoning ordinances and possibly septic rules, the spaces could flourish and provide both affordable housing and an income stream for homeowners. That additional income stream would make homeownership more affordable. The Town of Duck has been working on rules of this type; other towns should develop similar ordinances.

There are paths to better workforce housing in Dare County. They start with better wages and a real effort by local government to address the issue. Absent these changes, the status quo will persist, and the community will suffer.

Bob Muller served as President of the Outer Banks Community Development Corporation for five years and is a former Commissioner and Mayor of Nags Head. His article here was written in response to the Outer Banks Sentinel article, OBX housing crunch hits summer employees.