When it comes to the affordable housing challenge, Georgia is like many other states that face a significant demand-and-supply gap. At the same time, rising prices and supply chain issues have made it harder for contractors to deliver affordable units within a specified period. The result has personified in the form of more and more residents within the state becoming rent burdened. Moreover, investors with deep pockets are also contributing to the issue, Maxwell Drever notes.
Rent burdened individuals who spend nearly half of their income on rent are finding it hard to spend on other necessities like education for children, healthcare and nutrition. These sacrifices are compounding the issues not just for families but for the state government as well which has to allocate resources to tackle these issues for residents. At the same time, evictions are also a concern for the state and other individuals.
Rising Cost Burdens in Georgia
Maxwell Drever has analyzed that the affordable housing situation in Georgia is quite alarming. At present, 73% of extremely low income households that are renting homes in the state are cost burdened. A cost burdened household is one where more or less 50% of the income goes towards rent only. In a budgeting situation like this, making ends meet becomes challenging. Families and individuals therefore have to compromise at times on necessary expenses.
Currently there is a shortage of more than 200,000 affordable rental housing units in Georgia. This is a huge number which is topped by the fact that prices are constantly rising. Disrupted global supply chains, rising labor costs along with a variety of other problems are fueling this crisis. Things have not been looking up for both buyers and sellers as the COVID-19 pandemic continues to resurge and hinder the path towards normalcy.
Surging Prices and the Income and Expense Gap
Besides the prevailing issues of the global pandemic, rising costs but stagnant wage rates are making it harder for people to buy or rent a house in places like Metro Atlanta. In the past year alone, home prices have risen nearly 25% with the average cost of a house going up from $290,000 to almost $360,000. In comparison, wages have only risen by a meager 6% which is not enough to adjust for the higher expenses that people now face.
The prices and a gap between excessive demand and lacking supply means that whenever a property comes up for sale, bidding wars begin. Maxwell Drever states that not every family is able to bid above a certain amount, which ultimately translates to properties being picked up at amounts exceptionally over the asking cost. For the average person or the extremely low income individuals, these prices are already exorbitant, let alone after the bidding process.
According to Maxwell Drever , the current challenge is a mix of natural as well as man-made scenarios. The pandemic is not something that the world is able to control and predict at present. At the same time, wage rate disparities are rearing their ugly head as well. Consequently, a huge void is being created that can spiral out of control very soon unless corrective action is taken immediately.