(The Center Square) – For North Carolina residents struggling to buy homes, it’s not their imagination that prices seem to be going through the roof, according to a newly released study.
The state as a whole had an average listing price in North Carolina of about $520,000, which is 20% below the national average of $647,000, the John Locke Foundation study notes.
Even so, it can be hard to find an affordable house to buy because home costs have risen faster than incomes, the study said.
“While prices here remain lower than the national average, the state is facing a severe and growing housing shortage driven less by market forces than by outdated land-use rules and regulatory barriers that constrain supply,” the report concludes.
It’s worse in the state’s cities such as Charlotte, Raleigh, Durham and Chapel Hill.
“When you look at the big picture, everything looks pretty good,” Kelly Lester, a John Locke policy analyst and author of the housing study, told TCS. “However, when you start looking at the specifics, all the major cities are burdened and we are short over 750,000 housing units in the next five years.”
Part of the problem is due to the rural-to-urban population migration that has been occurring in North Carolina and across the nation, Lester said.
Also, urban zoning regulations have for years favored single family homes with large lots and frowned on more affordable dwellings.
“In Raleigh, for example, more than half of residential land was historically zoned exclusively for detached single-family homes, effectively banning duplexes, triplexes, townhomes, and small apartment buildings in much of the city,” the report says. “When population growth accelerated, the housing supply simply could not respond.”
In recent years, cities like Raleigh and Chapel Hill have begun approving more affordable housing types including duplexes, townhomes, cottages, and “accessory dwelling units,” which are smaller homes that share a building lot with a larger house.
“These changes did not require massive subsidies or new bureaucracies,” the report said. “They simply removed barriers that prevented the market from doing its job.”
Legislation introduced last year in the Legislature would require cities and towns to allow the expansion of these types of housing statewide. The bill will be considered again this year, Lester said.
“Prices are high not because developers refuse to build, but because rules prevent them from doing so efficiently,” the report concluded. “Minimum lot sizes, parking mandates, lengthy permitting timelines, and rigid zoning classifications all add costs that ultimately show up in higher rents and home prices. When supply is artificially constrained, scarcity becomes permanent.”
