‘There’s just nothing on the market’

By on March 19, 2021

As home sales surge, employee housing shrinks

John Harris of Kitty Hawk Kites and restaurateur Wes Stepp are concerned about housing their employees.

Homes and properties on the Outer Banks have been selling at a record pace for months and there is no sign it will slow down in the foreseeable future. And as home sales soar to unprecedented levels, real estate and business leaders are sounding alarm bells about the impact on housing for the Outer Banks’ permanent and seasonal workforce.

In an earlier Voice story, the effect of home sales on the vacation rental market was examined. But the loss of rental homes extends beyond the properties Outer Banks visitors use for their vacations, also affecting those looking to rent while they fill temporary or full-time jobs in the area.

“We need five-hundred rental units right now, today,” said Richard Hess, Senior Broker at Sun Realty and Chair of the Outer Banks Chamber of Commerce Board of Directors.

President of Kitty Hawk Kites, John Harris, has witnessed firsthand how critical the shortage of year-round rental housing is in attracting key employees. “We had a manager’s position open at $45,000 annual pay plus benefits,” he said. “Somebody applied from the western part of the state and accepted the position. After a week of searching for housing, they declined the position. They couldn’t find any place to live.”

His concern is echoed by Wes Stepp, President of the Outer Banks Restaurant Association and owner of Red Sky Cafe and NC Coast Grill & Bar. “Labor, as far as finding a place that’s…affordable, is always a challenge,” he observed. “But there’s just nothing on the market. I’ve never seen it as bad as what we’re going into now.”

The North Carolina Department of Commerce estimates that in 2019, 25.6% of Outer Banks housing was rented by year-round residents. There is, though, growing evidence that the market is shrinking. “I sell real estate for a living,” Hess said. “And lot of people when they move here, they don’t want to buy a house as soon as they get the job. They want to make sure they like the job before they commit. They want to rent a place.”

Some of the current problem is related to the surge in real estate sales, but Hess says there are other factors as well. “Part of it is the past five years, you’ve had a lot of people that had year-round rental properties that converted them to Airbnb…So those houses are gone,” he said. “And then the second thing that [has] happened more recently in the past year is that there’s people moving here in droves.”

The rental crunch affects both long-term and seasonal employees. Outer Banks businesses typically hire five to six time more seasonal employees than permanent staff for the summer. Those employees need a place to live, and business leaders are worried about what they are seeing.

Harris, with Kitty Hawk Kites stores from Ocracoke to Corolla, is one of the largest seasonal employers, typically hiring “a couple of 100 people for the season.” For the upcoming season, he has had to take some extraordinary measures trying to create housing for his employees.

“I just had to buy another house trying to beef up our housing,” he said. “I’m trying to model housing people in RVs or travel trailers this season, trying to create housing any way we can.”

Not every business, though, hires as many people or has the capacity to create its own housing as Kitty Hawk Kites. If those businesses are not fully staffed for the peak season, some difficult decisions will have to be made that will impact revenues and the visitor experience.

Restaurants, which are very labor-intensive businesses, are particularly dependent on summer help for the peak season and Stepp says their owners are worried,

“Shared among restauranteurs on the Outer Banks, it’s their single largest concern,” he said.

The summer of 2020 with travel restrictions in place and inadequate time to fully hire a staff, may have provided a preview of what could happen this year.

“Last year we couldn’t open for lunch at Red Sky because we just didn’t have the labor force to operate two shifts,” Stepp said. There may be more of that this year.

“Without the labor force in place, people are talking about we’re not going to be open for certain shifts and we’re going have to be closed two days a week, even in the height of the season,” he said, adding, “The other thing that’s affected are menus, the products that people are serving.”

Stepp also explains that if he can’t hire the line cooks he needs, he will have to cut back on what he offers the public.

“If you’re operating with X amount of people on the line, and then all of a sudden you only have two, they can’t produce as much food as four. You’re going to have to limit what you’re offering,” he said. “If we don’t have the labor force to be able to perform a full menu, we’ve got to reduce it, limiting the options to the public.”

“That’s a big deal,” he added. “Because you have a certain amount of days…on the Outer Banks to make the money to get you through all winter.”


Is the OBX housing boom cause for concern?

OBX home sales boom as rental stock shrinks

 

 

 



 

 

 



Comments

  • CCC

    Has anyone even talked to Currituck County to try and partner on something? Maybe they need an incentive to help us out. Talk it to death, pay for research and then talk it to death some more – that appears to be working really well!

    Monday, Mar 22 @ 8:45 am
  • surf123

    Not to bust bubbles but there are very few people who would tolerate seasonal worker’s renting their buildings especially if they are nice and if they are nice they would do a lot better than rentals to temporary workers.

    The only solution is on the mainland as close to the bridges as possible. On HI in the Tri-Villages, Avon, and Hatteras there is really is no place that the best use is worker housing. Most people do not want a fraternity house next door to the home they are renting. I’ve lived in summer rentals before and I would not want to live next door.

    Monday, Mar 22 @ 9:54 am
  • Rob

    I am a Yankee who owns a beach rental. I love to use the place Off Season as I do not like all the crowds, but I do enjoy others who are willing to pay my mortgage by renting it. The land that the house sits on could accommodate a small accessory house (if zoning was fixed) . I would gladly, at my expense build it and rent it at a price that is realistic. I would even go so far as to sign an agreement that if granted zoning permission, I would keep the unit as affordable housing. I have several apartments in the Virginia and we prefer to have long term tenants as this works out to be cheaper and more profitable. How do we do it, reasonable rent, good housing, always fix things when they break, treat our tenants as family.

    Dare Govt – please allow home owners the chance to help those who keep this community moving.

    Monday, Mar 22 @ 1:04 pm
  • Stan Clough

    So many negative opinions here. Facts are that people want to live here and land is limited. Prices will go up. What bothers me most is the “greed is a sin” guy. What defines a “sin” ? the dog surely does not know. His comments are in violation of numbers 9 and 10 of the “Ten Commandments” we have all heard of and some respect.
    Life is not always easy, communities need to work together to make things happen but property values can not be ignored and transportation needs to be addressed. there are 2 choices, create a system to transport workers from inland and assure the inland housing is there.
    Or move up vertically and expand sewage treatment capacity.

    Monday, Mar 22 @ 3:02 pm
  • OBX Resident

    There is nothing on the market because Dare County and many of the municipalities have not revised their zoning regulations to solve the problem. With more and more land being SAGAtised, the availabilty of undeveloped land is diminishing. The article quotes a stakeholder as stating we need 500 units right now. The denser zoning districts in Dare County allow 10 units per acre. Using this density per acre one would need 50 acres to meet this demand. As more land is developed for single family uses there is going to be less available land and the problem is going to continually worsen. One can also prevent the SAGAtion of the fabric of the Outer Banks by creating zoning overlays that limit the density to more intense land use areas and put architectural requirements on the developer to preserve the sense of place. You want to the density bonus you have to meet these requirements. The municipal leaders are also at fault. It is almost to late for zoning to be able to solve the problem, but that does not matter our leaders seem incapable of actually working to solve the problem. The zoning exists in other coastal communities.

    Monday, Mar 22 @ 9:08 pm
  • sandflea

    After discussing this subject with former employees of John Harris; it seems that “$45,000” isn’t a base salary. That’s if the person makes all of Harris’ “goals” and gets all of the potential bonus’s. This a pretty pathetic income for a management position here on the Outer Banks.

    Tuesday, Mar 23 @ 8:16 am
  • mikem

    only idiots will build on a temporary SAND DUNES by the ocean.. waves come in.. land flows out.. the Ocean will win.. like children digging holes in the surf..

    Tuesday, Mar 23 @ 9:58 am
  • resident

    The greed us locals have observed is sickening. These same community leaders are the ones that hire our kids and adults pay them nothing , expect them to work a 12 hour shift with no breaks treat these young kids rudely and then complain that they cant house outside workers. Well we are no longer concerned if the realty companies cannot get cleaners for their rentals, or serve food to tourists. We are concerned with being able to continue to WORK 2 TO 3 JOBS and not get kicked out of a yearly rental because its turning into a weekly rental . Maybe Dare county should buy some of this land with the land tranfer taxes and reserve that land to help the residents to be able to continue to work and live here. The lack of respect that was shown to the locals last year as we entered into the pandemic left a bad taste to a lot of residents and Yes I very well remember the rude gentleman saying that we could bait his hook and pour him drinks. I hope to never meet this gentleman because his drink would be on his lap. If none of this applies to you then great , you are fortunate enough to afford to live here but try to look at the experience of a local with low salaries , expensive food, fuel, etc. although this is my home , where a majority of memories and friends were made I may have to consider leaving in the very near future due to the housing issues. Heartbreaking actually.

    Tuesday, Mar 23 @ 2:01 pm
  • Stan Clough

    As they say, do not let the screen door hit your ass on the way out !
    Sorry if that sounds rude but quit blaming your problems on people that work hard in a competitive environment. Maybe there are rude people that make rude comments about local people but do not be that joke, they are the joke and hopefully we will all thrive together. Trying to blame SAGA for anything is absurd. The outer banks community needs to find a way to make it work.

    Tuesday, Mar 23 @ 9:44 pm
  • Old timer

    LMAO. The rental problem has been going on for years. Who wants to drive from Columbia or E. City for minimum wage? Cleaning, cashiering, waitressing, etc for the Paying guests of wealthy non-residents who own a beach home in exclusive beach community that doesn’t give a darn about the year round residents. Remember the days when you had to buy a house because you would get kicked out in May so the owner could rent weekly summertime $$$$? But the kicker is you cannot afford a house / high taxes/ high insurance / over priced groceries etc…,on a poor man’s wage.
    It’s never going to change until we vote out the greedy real estate / contractor power mongers.
    Can obx voice post the salaries of all the elected officials? That would be informative to the community.
    Thanks!

    Wednesday, Mar 24 @ 2:19 pm
  • Localist

    Maybe instead of a convention center they could build affordable housing on that property…

    Wednesday, Mar 24 @ 8:15 pm
  • Stan Clough

    Affordable housing on the Outer Banks is a relative term

    Thursday, Mar 25 @ 9:33 am