Eric Maribojoc, Professor of the Practice & Housing Affordability Initiative Lead, Leonard W. Wood Center for Real Estate Studies – UNC Chapel Hill

In an interview with Invest:, Eric Maribojoc, professor of the practice and housing affordability initiative lead at the Leonard W. Wood Center for Real Estate Studies at UNC-Chapel Hill, discussed the pressures shaping North Carolina’s housing market, the role of public-private partnerships, and opportunities for regulatory reform. “We can make housing approvals less complicated, less uncertain, and less costly,” Maribojoc said.

What changes are having the greatest impact on housing affordability in North Carolina and the Triangle?

Prices have continued to increase for for-sale housing as North Carolina continues to experience population growth driven by job growth. That is positive because we want to see both population and employment expand. However, we need to create housing to keep up with the demand.

We also need to create housing in the places where people want to live. Housing supply has not kept pace with demand, which is why prices continue to rise, although the increases are not as rapid as they once were. We have done a better job of creating housing, and high interest rates have dampened demand over the last couple of years. Even so, house prices are still climbing faster than many people can afford.

More households are spending over a third of their income on housing expenses, creating significant financial stress.

How is the broader economic environment contributing to rising housing costs?

The cost of constructing housing has risen substantially since the COVID-19 pandemic. Those higher construction costs feed directly into housing prices.

Land in the Triangle has also become more expensive because more people are competing for less available land in the places where they prefer to live.

Demand remains strong, although elevated mortgage interest rates have moderated it over the last two or three years. Even so, the total cost of buying and occupying a home remains a large portion of people’s paychecks, while incomes have not increased at the same pace.

Housing costs include more than the mortgage. Property taxes and property insurance also affect affordability. Insurance costs have increased significantly, partly because of natural disasters affecting both western North Carolina and coastal communities.

How do affordability challenges differ for renters and prospective homeowners?

North Carolina produces more housing than the average state. Although we have an affordability problem, it is not as severe as in some other states, and the relatively lower cost of living remains one reason people continue moving here.

We have built a substantial amount of rental housing, particularly in the Triangle and Charlotte. That increase in supply has helped moderate rent increases.

As a result, renters generally face less pressure than prospective homeowners because for-sale housing prices have continued increasing while rental supply has expanded.

However, many lower-income households, and even some middle-income households, still find both renting and homeownership unaffordable. Most of the rental housing currently being built serves the higher end of the market. The higher end is well supplied, while the lower end remains undersupplied for both rental and for-sale housing.

For renters who can afford newer apartments, limited rent increases may provide an opportunity to save toward a down payment, although elevated interest rates continue to delay homeownership for many buyers.

What forms of public-private partnership can expand affordable housing production?

The greatest shortage is housing for low-income and lower-middle-income households. Public-private partnerships are one way to address that shortage.

These partnerships can take many forms. Publicly owned land can be combined with private capital, lowering project costs. Public capital can also be paired with private ownership or construction, while both sectors may contribute financing to make projects feasible. Public support may also come through housing vouchers or rent subsidies.

Whatever the structure, the public contribution helps reduce costs and allows projects to attract the private capital needed to move forward. The common goal is making housing financially feasible that otherwise would not be built.

Why is stable housing important to workforce development and economic growth?

Housing is a special kind of real estate because it is a foundational need. It is difficult to become educated, hold a productive job, or raise children without stable housing. Those outcomes all contribute to a more prosperous community.

Research on economic mobility has also shown that stable housing helps people advance. Someone born into a low-income household has a better chance of moving into a middle- or higher-income household when that person has stable housing and broader opportunities.

Housing markets therefore need to provide adequate housing across income levels. Public-private partnerships may address one segment of the market, while the private sector serves another. The question is how the regulatory environment can allow both to meet those needs.

How can regulatory reform reduce the cost and complexity of housing development?

We have reached a point where housing is overregulated. Complicated regulations and processes create compliance costs that either increase the final cost of housing or prevent projects from being built.

Many regulations exist at the county and city levels, while others are established by the state. Recent federal housing legislation has encouraged jurisdictions to review their rules and reduce unnecessary costs and complexity.

The most effective framework is what we call by-right development, meaning a developer can build housing as long as the project complies with established regulations.

The most difficult regulations are discretionary because they require public hearings or additional approvals. That creates uncertainty, increases costs, and adds risk for developers. We can make housing approvals less complicated, less uncertain, and less costly.

How does public opposition to new development affect affordability?

One challenge housing developers encounter is public opposition to new housing. Public input is important, but people also need to understand the broader consequences of not allowing additional housing.

Restricting new housing affects whether future generations can afford to remain in their communities. Information, education, and well-executed projects can help address those concerns because, once projects are completed, residents often see that their worst fears do not materialize.

Communities are also changing. Single-person households are among the fastest-growing household types in the United States, and we also have a growing older population. Those households need different types of housing from what we traditionally built for small families.

Good developers consider not only where people live but also the shared spaces where residents can gather and build relationships. Affordability matters, but people also want communities where they are proud to live.

What role can individuals play in improving the housing environment?

Individuals can have a significant impact on how housing is built in their communities. Our development process includes extensive public input directed toward elected officials who approve many housing projects.

For a long time, the loudest voices were those opposed to change and new housing. That has contributed to today’s affordability challenges.

The conversation is becoming more balanced as more people attend public hearings and speak in favor of housing, but there is still a long way to go.

I encourage people first to become informed. If that knowledge leads them to participate in the public process, their engagement can go a long way toward improving the housing situation.

The YIMBY movement, which supports increasing housing supply, will hold its national gathering in Raleigh this fall. That could help expand housing education and encourage more people in North Carolina to participate in these conversations.