With the inflation rate climbing to a 40-year high of 8.6% in May, everything is getting more expensive, but increasing rents and housing costs are particularly concerning to some local leaders because of what they might portend for the area’s ability to cope with continued growth.
The first to feel the pinch of rising costs are those members of the community with the least means to absorb them, according to Nalisha Henry, vice president of community impact for United Way of Greenville County.
The lack of affordable housing in the Greenville area has been identified as a critical need, and Henry says although gains have been made in this area, the need is still dire.
Warning signs began emerging last fall, she says, when COVID-related eviction moratoriums ended and calls to United Way’s 211 helpline requesting housing assistance began to increase significantly.
“Stable housing is critical to community success and individual success,” Henry says.
The area’s rapid growth and struggle to deal with the challenges of gentrification are disproportionately affecting the most vulnerable segment of the population, according to Lauren Stephens, director of social services for The Salvation Army of Greenville,
“This is an epidemic here,” Stephens says. “We’re going to have to reckon with what we have chosen to ignore.”
With increasing housing costs, the number of people struggling to obtain affordable housing — generally calculated to be 30% of household income — will only increase, according to Rachael Mason, a social worker with Triune Mercy Center.
All three women say finding housing that runs $500 to $600 a month, which is the amount most of the people they work with can afford, has become nearly impossible.
“We’re just finding that is becoming non-existent,” Mason says.
A broader problem
Although most of the debate about affordable housing has been focused on the area’s most vulnerable residents, increasing housing costs are impacting a much broader segment of the population.
The area’s explosive growth in recent years has created an extremely tight housing market for potential home buyers across the economic spectrum. The demand-versus-supply imbalance has been steadily pushing up prices, according to Michael Dey, vice president of government affairs for the Greenville Home Builders Association. If more is not done to address the problem, Dey says it could have a depressive effect on the area’s growth prospects.
There is only about a month’s supply of housing inventory available, a slight improvement over last year, but Dey says that is nowhere near the five-month supply of a normal market.
With an average of about 50 people a day moving into the Greenville area, the only hope of meeting demand is new construction, Dey says. Aside from increasing costs for new construction, regulatory hurdles and community opposition to new housing developments are hampering builders’ efforts to meet demand.
This circumstance is pushing many would-be home buyers into the rental market, according to Dey, which in turn pushes rent rates up due to the supply-demand imbalance in that market. It also creates a vicious cycle in which fewer households have the means to afford to buy a home. This produces a phenomenon called “drive until you qualify” where developers and the buyers they depend on move farther from an urban center to areas where land is cheaper.
And that, Dey says, is a recipe for unchecked sprawl.
“You know what that’s called?” he says. “Atlanta.”
Greenville housing cost snapshot
- The average monthly rent for a one-bedroom apartment in Greenville as of June 23 is $1,377, a 23% increase over the previous year, according to Rent.com,
- With housing affordability typically calculated at 30% of household income, an individual or family would have to earn about $50,000 a year to afford to rent a one-bedroom apartment at such rates.
- About 41% of the cost to build a new multifamily apartment building is due to regulatory requirements, according to a study released this year by the National Association of Home Builders.
- The median home price in Greenville is $350,000, according to Realtor.com. Listings stay on the market an average of 41 days.