Making a dent in the OBX housing crunch?

By on April 16, 2021

A few ideas and projects in the pipeline

County Manager Outten acknowledges the challenges and Planning Director Creef acknowledges the slow progress in creating new housing.

In an October presentation to the Dare County Commissioners, Marcia Perritt, associate director of the Development Finance Initiative (DFI) ticked off some sobering statistics. She told the commissioners that almost 3,000 people had turned down jobs in Dare County because of a lack of affordable housing. She also noted that the county needs 1,200 rental units for lower-income workers.

Given that reality, it’s no surprise that as summer nears, there are serious concerns about a labor shortage on the Outer Banks that could affect everything from business hours to the quality of service. The lack of affordable housing is a major contributor to that problem, and while the issue is not unique to the Outer Banks, there are limited options for tackling the problem here.

“Raleigh, Durham, Winston-Salem, the large urban areas, they’re all struggling with the same problems. The difference there is as you move out twenty miles or so from Raleigh in Wake County, you’re still in Wake County and you’ve got less urban areas. We just don’t have any large tracts of land for that kind of housing,” observed Dare County Manager Bobby Outten.

Bobby Hanig, the State Representative from N.C. House District 6 is blunt. “I don’t see a short-term solution to resolving the problem,” he said.

In this installment in our ongoing series of stories about key Dare County housing issues, we look at some of the efforts — public, private and public-private partnership —to create more reasonably priced workforce housing.

Yet even as developers break ground on new projects and the county and towns pass ordinances trying to address the problem, a shortage of quality, affordable workforce housing will continue to plague the area for years.

Bowsertown and SAGA projects

In October 2020, the Dare County commissioners voted to move forward with the Bowsertown workforce housing project in Manteo. The property, off California Lane, is owned by the county.

But it is a long journey from concept to completion, as Outten explained, and the project is currently in the design phase. “Our goal is to get it built quickly. But to do this we’ve got to have developer input that uses the tax credits [and other incentives]. Just Dare County can’t build it. We don’t have a housing authority, so we’ve got to have a public private partnership to do it,” he said.

“We want to get as many units as we can and have all the things you need to make it a livable community,” Outten continued. “Hopefully near sixty units. Sixty seems to be kind of a sweet spot for the developers as a minimum they can do that makes sense for them.”

Bowsertown is not the only workforce housing development in the pipeline. If construction progresses on schedule, SAGA Construction plans to have Somerset Apartments in Kill Devil Hills, a 112-unit apartment complex, ready for occupancy by June 2022.

The apartments, located behind the company’s upscale Run Hill Apartments, is targeting mid-range wage earners, according to company CEO Sumit Gupta.

“We [are developing]112, one- and two-bedroom apartments that will start in just over the basic $1,000…The average price for one or two bedrooms will be in the $1,200 or $1,300 range,” Gupta said.

Using a generally accepted calculation that housing costs should be approximately 30% of income, the apartments are targeting workers who earn between $40,000-$52,000 per year.

“The lack of affordable rental housing is a major weakness in our infrastructure here, and it’s causing ripple effects in getting the right people. You can’t bring people to the area if there’s no housing,” he added.

SAGA’s Gupta has a few projects in the pipeline. Kitty Hawk Mayor Perry says ADU enforcement is difficult.

SAGA is also hoping to develop a 72-unit project with all rents under $1,000 located by the CVS in Manteo. That property is zoned commercial and to proceed, the town will have to issue a special use or variance permit to use the property for residential purposes. The town’s planning board has turned the request for a variance down, and the matter next goes to the Manteo Board of Commissioners.

“If it happens, 72 units, one, two or three bedrooms, all under $1000, because it’s state regulated…And not one dollar of local money needs to be used,” Gupta said.

Other Options: ADUs, Cluster Homes

The commissioners and some municipalities have tried legislating incentives for more reasonably priced housing through such tools as accessory dwelling units (ADU) and cluster developments.

In the past, renters who were residents of the Outer Banks often relied on ADUs — attached apartments to homes that were generally well-priced and were a good option for an individual or small family. Increasingly, though, those units have been converted to VRBO (Vacation Rental By Owner) and Airbnb rentals.

Although ADUs have been a part of the Outer Banks rental market for a number of years, until recently there was no specific permitting guidelines for them. Within the past two to three years, though, Dare County and some of the county’s towns have created ordinances to allow them.

The language in the ordinances calls for them to be used for long-term rentals, but as Kitty Hawk Mayor Gary Perry notes, enforcement is difficult.

As a practical measure, there “really…is no way to enforce that. It’s worth it to try to say that’s what we want. In practice, I have no doubt they’re being rented right and left, there’s no question in my mind,” he said.

ADUs are not the only option Dare County is using to try to address its housing shortage. Dare County Planning Director Donna Creef believes that cluster developments can play a role.

“We did a handful of houses in Rodanthe, a couple in Avon and then we approved another one down on Hatteras,” she said.

According to Creef, the county has clear guidelines defining what a cluster development is and how it can be used.

“We have standards in our ordinance for a group home, it’s called a group housing development,” she explains. “You have one parcel of land, and you only own the footprint of your structure. Everything else is common area that has certain setbacks and building separations in order to do the cluster homes…They have to be occupied on a long-term basis.”

To date, however, very few cluster developments have been approved by Dare County.

“It’s not any significant number,” Creef acknowledged. “But I think that, you’ve got to crawl before you can walk. The competition for housing is so keen I think that even one unit helps.”

Laurel Bay

Although land is at a premium for most of Dare County and anything large enough for a subdivision or development is difficult to find along the Outer Banks or on Roanoke Island, the county includes a sprawling mainland.

Much of the mainland is part of Alligator River National Wildlife Refuge, but the Eastlake community is a largely undeveloped and sparsely populated part of the county. However, there is no county water provided to the area and well water is used for homes. Because septic systems are used for waste treatment, creating subdivisions is a challenge.

Hatchell Concrete in Manteo took on that challenge with Laurel Bay, a small modular home development about a half mile from the Alligator River Bridge. There was an old farmhouse on the property that Jamie Hatchell had hoped to restore, but it was past redemption.

“Then this idea just grew from there, because we had all this property and acreage— and why can’t we make a nice place that’s affordable,” Jamie Hatchell said.

The subdivision is not large. There will be 21 lots with 19 for residential and two for commercial use. The company is stating slowly, with only three ready now.

Perhaps most importantly, the company is trying to keep the price around $250,000, although it’s difficult to do. The next delivery is scheduled for the summer and keeping the price in line is a challenge.

“When I priced up the new [modular homes] they are 30 to 40% higher than what we originally paid. I don’t want cut quality, so I’m trying to choose different models…anything I can do to kind of keep it so that we won’t have to raise prices. There’ll be $250,000 or just to touch a bit more to cover the cost of just 30% inflation,” he said.

It is a project that Hatchell Concrete is well positioned to undertake, Derek Hatchell stated.

“It’s a unique situation because we have a construction company. We have equipment…The average person would probably pay quite a bit more than what we had to pay for those services,” he said.

Laurel Bay, for the Hatchells, represents what can be done when people think creatively about solutions.

“I do encourage people to kind of look out of the box because we are a very small area, and we’re not growing more land,” Derek said. “There is property, that if you know you dig a little deeper, you can utilize.”

 

 

 




Comments

  • HAHAHAAA good luck

    Keep building rental units and accommodations for vacationers and eventually there will be too many people here visiting and not enough residents. So now its up to digging up more land to find housing for residents. This whole place will be built up in 5 years. All around all I see anymore is more trees and habitat being cut down to pave way for buildings. The whole place will become a swamp and the water table will rise and every storm that comes through will just be worse and worse flooding.

    The cost of living here is too high, even at 40-54K a year. I’m willing to bet two-thirds of the year round residents of this county don’t even make that much a year. Hate to say it but there really isn’t a future here for young families to come up in. Teachers, ems, police, county and town employees, are all way underpaid in this county. You can’t buy a house here on a single income budget. Best thing to do is move and establish a comfortable life where the income to costs ratio allows you to save money so in 10 years when this place has fallen apart from flooding and foreclosures, you might be able to pick up a small home and and hope to be able to afford to retire.

    Ems staff making $30-35k a year working long days with non stop calls, dispatch workers pulling 12 hour shifts, NO one getting paid overtime!!! Then there is this guy up top working two county jobs making a quarter of a million dollars + a year trying to figure out how to help people he doesn’t even care about. You’re using county funds to build new buildings and combine buildings, things that make increase the county assets so the county is wealthier, at the expense of pay raises to keep it a competitive job market.

    Friday, Apr 16 @ 1:37 pm
  • Debra

    I am a business owner and Spoke to the commissioners over 20 years ago. All you get is Blah blah blah! Nothing has been done for years. I guess when the revenue drops drastically and the reviews trash our beach they might figure out a way to do it. Everywhere else the figure out housing but here, no one does anything but talk. We have lost a lot of out labor force to other areas where they can get an apartment for a price that does not make them choose paying the rent of feeding themselves or their kids. Come on people get your stuff together and figure this out now not 2 years from now. Just bureaucratic BS!!!

    Friday, Apr 16 @ 1:51 pm
  • Dethrol

    Any solution needs to be locally derived and driven. The United Nations, World Bank, OXFAM, etc. simply love the idea of Development Finance. The idea is noble enough, as long as one is comfortable with multinational institutions and international banking conglomerates with nebulous connections to God knows who and what. We here in Dare County just need to make sure we accept that Development Finance is shot throughout with things like green recovery, climate financing, social justice, etc. before we go all in.

    Friday, Apr 16 @ 2:55 pm
  • John T

    There’s plenty of high and dry land on the Currituck mainland.That would be a good start IMHO.The housing shortage also affects workers along the Currituck Outer Banks.Why not bring the two counties together and come up with a solution that help remedy the situation?

    Friday, Apr 16 @ 4:43 pm
  • Joe Morabito

    I just love it when these elected morons say they don’t see a short term answer to the problem, that’s because they never take a long term look at anything. They are reactive not proactive in every facet of their jobs. We need affordable housing if we are going to have a workforce, we need subsidized apartments for seniors, we need expanded healthcare services, but most of all we need our elected officials to decide if we are going to be a tourist retreat, or if they are going to try to establish a year round economy.

    Friday, Apr 16 @ 7:11 pm
  • Marsha Johnson

    I bring this up all the time. A major problem to long term housing is is the North Carolina laws that protect the tenent and does not protect a Landlord. Therefore, the loss of property, damage and rent money dealing with a bad tenent turns off a property owner from doing long term. You cannot get them out, you cannot put their belingings out, you cannot turn off water or ekectric, you cannot garnish wages, you will never see money from a judgement. Just a bad investment to long term lease for tge average landlord. Change the law.

    Friday, Apr 16 @ 8:23 pm
  • Runnerguy

    The answer is already happening, people are moving to Currituck and Tyrell counties.
    Business owners should not be asking local governments to pay for housing.
    Remember all that free market stuff you bring up when it comes to wages ?
    Same thing for housing !

    Friday, Apr 16 @ 8:45 pm
  • It’s the $

    Whether Dare or Currituck, BOC make housing decisions and exceptions to UDO’s for the $
    County gets more revenue from rentals with less outlay than supporting year round that might even incur school costs and without the occupancy tax
    IMO folk who care about the issue including business owners ought to reflect when voting

    Friday, Apr 16 @ 9:29 pm
  • Chaser

    The housing is still there it is just that the landlords do airbnb and vbro now and not long term or month long rentals to college kids.

    Saturday, Apr 17 @ 9:23 am
  • Stan Clough

    With the ongoing paranoia of the covid, political violence in cities and many other reasons many more people are wanting to live on our barrier “island”. It is good for those that own property and not so much for those that rent. As a builder in 2000 I wanted to build a nice 1200 sq. ft. home efficient for people that lived and worked here. As I started building September 11 disaster happened. In 6 months lot prices doubled. I had 2 new houses for sale and sold above asking price because of competition. Life goes on and Dare County has become a wonderful place to live, good schools, beaches, public services, a Hospital. Property values go up when the area has what we have in Dare County.
    All the projects sound good, hope they work. I tried townhouses, its not what everyone wants but affordable or workforce or necessary housing is not something someone buys. It is apartments for rent in East and Currituck, accessory apartments, combining business with employee housing on location.
    Property values will not deflate so I would guess that for the future we all need to evaluate how we want our County to look in 20 years.
    I say we all stop using cars and ride bicycles. Like Catalina Island, bikes or golf carts. Contractors and deliveries are allowed trucks, just a thought…

    Saturday, Apr 17 @ 9:36 am
  • Tri-Village

    I’ve been throwing around the idea of all of us working class people doing a fourth of July week strike. No one go to work. This county needs to see the importance of the workforce here. I know we all need to make money but if we want a change, we need to show this county and all the rentals what will happen when there is no one here to work.

    Saturday, Apr 17 @ 8:31 pm
  • Michael Arnold

    Looks like business owners are going to have to suck it up and start providing housing for their employees. I see no realistic option to get through what look likes a built-in and systemic problem of the OBX. Capitali$m at its worst.

    Sunday, Apr 18 @ 7:56 am
  • Strike Please!

    Tri-village, I had been pondering the idea of a local strike too. It feels like if the working class that makes up the majority of our year round population doesn’t act this problem will just keep getting worse until it’s no longer fixable. I wonder what local interest would be like for that kind of event, I personally would love to take part.

    Sunday, Apr 18 @ 11:15 pm
  • Kira

    None of this helps family’s like me that make less then 15,000 a year. What can yall do for people like me that need 3 bedrooms because of having opposite sex children that can’t share a room and can’t afford 1,000 a month or more to have a place of our own

    Sunday, Apr 18 @ 11:36 pm
  • Sean Mulligan

    In California the way they take care of low income housing is to let them live in RVs parked on the side of the road.The only answer is higher wages.Low Income housing is a bandaid at the most.They can start with teachers and then all essential workers including grocery and all other retail outlets.That is the answer and the result will be higher taxes and prices for everyone.Basically we have to much wealth in the hands of a few people.I would rather see the employers who are raking it in pay a higher wage than government shoving it down there throats.Unfortunately no one wants there lifestyle changed.Instead of the CEOs chiming in on political points maybe they could take a pay cut and pass it on to the bottom of there respective labor force.

    Monday, Apr 19 @ 9:34 am
  • Dethrol

    Reality check. The Outer Banks is absolutely no different than any other vacation community anywhere else In the country. The overwhelming majority of employers on the Outer Banks are small businesses. The mythical CEOs that everyone talks about are most often your neighbors and friends who take huge amounts of risk to maintain businesses, employ people, and provide service or goods. The idea of a strike may sound sexy but it’s misguided and fraught with unintended consequences. Who are you going to target with a strike? This isn’t a mining town or manufacturing hub. Want to target something? How about government. Nearly 25% of the people employed in Dare County work for the government. Yet, the government does not produce a single damn thing. Good luck getting those government workers to join your strike and jeopardize their pensions and steady paychecks.

    Monday, Apr 19 @ 12:01 pm
  • Cavemansurf

    Increasing supply will always help to keep prices down & construction workers employed. But if all the new housing/Apt turn into vacation rentals, then what? Still no housing for the work force.

    The county could own housing that is strictly for its employees (teacher’s, garbage men, lifeguards) but people would have to move out if they quit. That’s what the military does. This also doesn’t help the restaraunt workers/hotel staff etc…

    OBX is slowly turning into Hawaii….only for the super rich & super poor (who spend their lives in housing projects, if lucky, tents if not).

    The only answer is strict licensing & enforcement of Airbnb. Property owners will fight this regulation as infringement of their rights….But it has to be done.

    Dare county has allowed it’s small amount residential/workforce housing to be taken over by tourists.

    Monday, Apr 19 @ 7:10 pm
  • Larry

    I think the housing is still here. Problem is that they all turned into vacation and quick airbnb rentals. No one wants to deal with the yearly tenants. It’s easier for them to charge high $$ to rent out week to week or day to day. Weed out all the bad tenants making as much money as possible.

    I’ve seen at least 4 homes in my neighborhood remodeled and turned into vacation/airbnb rentals.

    Monday, Apr 19 @ 11:03 pm
Join the discussion