North Carolina communities will face a gap of around 900,000 housing units by 2030 if nothing changes, an executive at the North Carolina Budget & Tax Center said in April.
It’s not the only time leaders have sounded the alarm on the Triangle’s growing housing crunch. The median sale price of a home in Wake County was $434,140 in January, up 25.4 percent from January of 2021, when the median sale price was just $346,315, according to the Triangle Multiple Listing Service.
As the Triangle attracts major tech companies like Apple, Google and now Meta while seeing increased startup activity in recent years, it has consistently ranked high on lists of the top tech regions. That’s attributable to a host of reasons—especially the talent consistently pumped out by local universities—but one longtime advantage is a relatively low cost of living compared to other tech hubs.
The economic prosperity of the region is also driving more and more people to recognize the pros of living in the Triangle, especially in a remote working age, said RIoT’s Executive Director Tom Snyder.
“I think that COVID and other things really made a shift for people thinking about, where do I actually want to live and what do I value in the places that I live,” Snyder said. “The fact that now I can work from anywhere makes a place like this even more attractive.”
But as the area’s housing shortage worsens, how could this affect the region’s overall growth as a tech ecosystem?
That’s something a lot of local leaders think hard about, including Scott Levitan, the CEO and President of the Research Triangle Foundation.
“If our region is going to grow by a million people by 2050, which is what is predicted, we all have to start thinking ahead of the puck on what we need to address before matters in the Triangle get acute,” Levitan said.
Still, there’s some reason for optimism. Although he said he doesn’t have a crystal ball, Levitan believes that as mortgage rates go up—as they are currently doing in response to the Fed raising interest rates—housing demand and price escalation might soften.
And even with these growing pains of the housing shortage, the Triangle will likely still be situated in a better spot than other tech hub cities, according to Dr. Mike Walden, a Reynolds Distinguished Professor Emeritus at NC State University.
Walden said the Triangle has experienced the same housing issues as other metro areas. Supply is not keeping up with demand, and as a result, housing prices are rising. Still, price per square foot is lower in the Triangle than in other metros.
“For many firms and workers, this means the Triangle is still viewed as a relative bargain,” Walden said. “But, if growth in the Triangle outpaces growth in other regions, the Triangle’s cost advantage will narrow.”
Walden sees two potential changes that could keep the Triangle on track as an increasingly influential tech region. One is growth in the outer sections of the area. There is under-developed land miles from Raleigh in towns like Garner, Knightdale, Sanford and Pittsboro. These towns will likely grow and absorb a major part of future growth, Walden said, adding there needs to be coordinated transportation options linking these communities for this to truly work.
The rise of remote working in tech is also helpful in terms of expanding the potential housing supply for tech companies located in the Triangle. If a regular commute is unnecessary, workers can live on the outskirts of the area for less money.
Though the way Levitan sees it, one key piece of the puzzle ultimately comes down to the lack of equity in public education. Many families choose the community they live in based in large part on the rankings of the schools in the area. If schools were on similar playing fields, families could remain where they are or choose relatively affordable neighborhoods instead of all rushing to the same ZIP codes—driving home prices there higher and higher.
Ultimately, the housing shortage in the Triangle is a good problem to have, Levitan said, as it shows the economy is booming in the Triangle—and nobody wants a sluggish, struggling economy. But he said conversations on how to continue the area’s growth in a sustainable way are needed right now.
“We have a lot of talent and intelligence in our region,” Levitan said. “We have a business community that’s becoming more and more engaged and wanting to be engaged in regional planning issues around transportation, housing, public education, diversity, equity and inclusion. We have the talent to be able to look into the future and start to plan now for the kinds of issues that growth entails.”
To fundamentally change the housing shortage requires policy change, Snyder said, not just an affordable housing unit here or there. The tech sector, which generally offers higher-paying jobs, will still be able to build within the Triangle, he adds. However, the industries that make somewhere a great place to live—like art, hospitality and entertainment—may suffer more if employees from these arenas can no longer afford to live in the Triangle.
“If a housing shortage continues to be such that only the tech workforce can afford the houses, it really impacts the ability to have a balanced and vibrant community for those times when you’re not at work,” Snyder said.