The United States is facing an affordable housing crisis and Georgia is not immune.
It seems that home ownership is becoming less and less a reality in our state. Reports indicate that nearly two-thirds of renters nationwide say they can’t afford to buy a home. In fact, Georgia has the lowest home ownership rate (61 percent) in the Southeast and one of the lowest in the United States. And in Georgia, between 2012 and 2016, roughly 1.3 million households were renters — representing 37 percent of the state’s population at that time.
And this number may continue to grow as home prices continue to rise. From 2011 to 2018, the average single family home sales price has jumped from $162,220 to $301,000 for an increase of 85.5 percent. By comparison, disposable income increased by 14.4 percent from 2011 to 2016.
The demand for workforce housing across Georgia is growing. As the top-ranked state in the country to do business for seven straight years, Georgia continues to see an increase in business recruitment and expansion. And as our state continues to attract new businesses, the population grows and so does the need for more affordable housing. In FY19 the Georgia Department of Economic Development facilitated the creation of over 28,000 jobs. With the creation of new jobs and the other factors over the last decade, Georgia is currently looking at a shortfall of nearly 350,000 homes.
As President of the 3,500-member strong Home Builders Association of Georgia, this concerns me. This is a problem that needs a solution.
A group of Georgia lawmakers spent much of the off-session looking for answers. A House Study Committee chaired by Rep. Vance Smith of Pine Mountain met four times during the late summer and fall to look at the issue of affordable housing. Their challenge, as defined by HR 591, was to review the existing and current practices relating to locally adopted residential design mandates for the purpose of protecting private property rights, allowing for consumer choice and encouraging the development of affordable housing options.
They heard testimony from numerous experts before issuing their report.
Their findings: the problem is a lack of supply.
They identified several reasons for the shortfall, among them the Four L’s: Labor, Land, Lumber and Laws. They emphasized that LAWS, or land use regulations, account for 24.3% of the final price of a new single-family home. Other points recognized by the committee include the difference between zoning conditions and building code requirements and unnecessary government regulations.
Similarly, a nationwide study listed the factors for the affordable housing crisis as: climbing costs of construction materials, increased costs of land and increased restrictions placed on the builder.
An editorial recently in the Augusta Chronicle asked the question: “Shouldn’t the look and feel of a community be determined by the people living in it?”
Be clear. The Home Builders Association of Georgia (HBAG) is not opposed to communications between local governing officials, home buyers and home builders about the look and feel of a community. However, once the peaceful communications and negotiations become mandates, you have to ask if a line has been crossed. When restrictions and requirements go beyond safety standards and codes, and becomes more about banning vinyl siding, concrete slabs and personal preference, you have to question if home rule has gone too far.
HBAG was pleased with the recommendations of the study committee:
1. Remove Unnecessary Aesthetic Restrictions
2. Encourage Local Governments to Loosen Zoning Restrictions
3. Allow for Innovation in Building Material Technology
4. Expand the Low-Income Housing Tax Credit to Include Single-Family Homes
As President of the HBAG, I would urge state lawmakers to look at the recommendations offered by this committee and look for solutions to the problem.
With the crisis we are facing in Georgia, now is not the time to discourage innovation by mandating aesthetics, restricting designs, and even infringing on the rights of property owners. We are not suggesting or recommending legislation that would risk the safety or would limit the local governments from shaping the look and feel of a community. HBAG is asking that we find a way to strike a balance between local control and the rights of the property owner.
Doug McMonigle is the president of the Home Builders Association of Georgia