Summary:
- North Carolina’s housing crisis is addressable by most local city and town leaders
- Austin, Texas is successfully bringing down its housing costs with sensible pro-housing reforms
- Leaders in Charlotte and across the state should study Austin’s pro-housing approach
North Carolina is growing. Already the 9th largest state in America by population, demographers expect North Carolina to become the 7th largest by the 2030 Census. As we have covered before, the overwhelming majority of that growth is accruing to our state’s urban and suburban counties – and as a result, housing prices are increasing.
Charlotte is a great example of the forces holding back greater housing development across the state. Our state’s biggest city has attracted roughly 100,000 newcomers over the last decade, and the broader Charlotte metro region continues to attract as many as 113 newcomers daily. But as demand for housing has climbed, supply has not kept up, and thus like any commodity, housing prices have risen. Charlotte’s median home price has jumped 92% in the last seven years, rising from $209,000 to $402,000, according to Zillow. This, despite meaningful efforts by city leaders to accelerate housing supply growth.
But the situation isn’t hopeless. There’s another, highly comparable American city that is successfully bringing housing costs down, and whose experience should be studied not only by Charlotte’s leaders, but by anyone interested in growing housing supply.
That city is Austin, Texas.
Austin’s answer
With a population of 974,447 in 2022 (compared to Charlotte, population 897,720) and a metro GDP of $222 billion (Charlotte: $228 billion), the Texas capital has a lot in common with the Queen City. It bears investigating whether North Carolina leaders could learn from the strategies Austin has used to bring down housing costs.
Texas built more houses than any other state last year, to which Austin alone contributed heavily. The results speak for themselves: since 2022, while Charlotte’s median home price has continued to increase (+4.5%), while Austin’s has actually declined by a cumulative 17%.
Nor does the good news stop there. Housing rental costs are also plummeting in Austin, with a 12.5% decrease year-on-year.
Texas has many built-in advantages that make building housing less expensive, including large amounts of cheap land and a large immigrant population, which draws down the cost of labor. Data from 2022 shows that immigrants made up 40% of the Texas construction workforce, compared to only 29% in North Carolina – though even here, as many as 1 out of every 4 construction workers is an immigrant.
But policy at the local level has also helped Austin bring costs down:
- In May of this year, the city’s leaders reduced minimum lot sizes from 5,750 square feet down to 1,800.
- In December of 2023, the city voted to allow developers to build more houses on single-family lots.
- They also made adjustments to their approval process, streamlining it so developers don’t have to wait months and repeatedly resubmit their proposals before they’re given the green light, and added bonuses for density.
- Austin’s leaders also eliminated mandatory parking minimums.
- Between 2020 and 2023, Austin’s Travis County approved 31,472 single-family building permits and 72,920 multi-family building permits. Mecklenburg county, by contrast, logged 27,130 single-family permits and only 25,854 multi-family permits, despite its population growing at a faster rate.
After the 60% cumulative spike in Austin’s median home prices from 2020 through 2022, the city leaders have acted with dispatch to address the city’s housing crisis. While the challenge clearly is not over (median prices are still 34% higher than in 2020), Austin has clearly made measurable progress. By contrast, Charlotte’s median home prices still remain stubbornly 54% higher than in 2020.
How can Charlotte catch up?
There are several specific steps that Charlotte leaders – or those in any city – could take to increase their supply of housing and bring median home prices down:
- Protect and reinforce pro-density zoning policies. Charlotte’s Unified Development Ordinance (UDO), passed last year, is having a positive effect in promoting more infill density. City leaders should resist attempts to weaken the UDO out of a misplaced fear of “too much” housing development.
- Fas-track approvals. Like they did in Austin, the city could audit its approval process to make it as simple, efficient, and fast as possible, and offer a fast track for projects that meet certain requirements. NC state lawmakers have proposed imposing permitting deadlines with financial consequences before, and this could be a sensible step.
- Loosen anti-housing restrictions like mandatory parking minimums. Charlotte has been reluctant to do this due to fear of creating transportation barriers, but there are already car-free developments in the city that encourage walking, biking, and ridesharing in a city already suffering from traffic congestion.
- Resist NIMBY influences. In order for any community to grow, it must change. “NIMBY” resistance often insists it isn’t against housing projects, only against this housing project – typically offering the same reasons each time. We should return to a paradigm where property owners have wide latitude over the use of their own property, but relatively little over neighboring property that they do not own.
- Support skilled trade apprenticeship programs. These programs encourage and train young people to work in construction. North Carolina has tremendous, long-term demand for jobs in the trades, and growing our supply of labor in this area would help bring down labor costs.
- Continue supporting immigration reform. Immigration reform is a federal issue, but cities can create a welcoming and supportive environment for the immigrants who live and work in their communities, like the compact Charlotte passed in support of the city’s immigrants in 2019. Voters should also be aware of the devastating economic consequences of Donald Trump’s promised massive deportation scheme.
See Carolina Forward’s paper The Road to Home: Fair and Affordable Housing for North Carolina, for real-world policy reforms that North Carolina’s leaders can take to bring down the cost of housing.
