Study: Region needs over 14,000 units in five years to sate hunger for housing
Published 3:29 pm Friday, October 20, 2023
By Jake Moore, Bowling Green Daily News
It’s getting harder and harder to find housing in Bowling Green and Warren County.
The results of a new local housing needs assessment were released this week, illustrating just how much the city and county’s booming populations are straining rental and for-sale housing inventories.
“Every community has some level of need. Your growth alone has exacerbated the problem,” Patrick Bowen, president and founder of Bowen National Research, told the Daily News after presenting his firm’s findings to the city’s board of commissioners Tuesday.
According to the assessment, the number of households in Bowling Green increased by 4,807 – 19.6% – between 2010 and 2022. The city is projected to add another 1,375 households – a 4.7% jump in size – over the next five years, a growth rate nearly six times that of the state.
The county projections contain more of the same. Warren County is projected to add 1,412 households by 2027, a 5.9% increase.
“I would say, in the last couple years, you’re probably the fastest-growing county that we’ve studied,” Bowen said.
The issue with that growth is a lack of homes to hold it.
All told, the city and county are facing a combined estimated housing gap of 14,247 residential units over the next five years. Bowen said this would be the number of units to shoot for if you wanted to “solve everything.”
He added that figure is a tall order, and told the Daily News that a more tangible goal might be to add 3,000 units across the city and county by 2027 to “keep you afloat.”
“You’ve got to keep up with those growth numbers,” Bowen said. “If you don’t add 3,000 units in the next five years, that limited inventory that you have now is going to be smaller, and when you have less inventory, landlords can raise the rents because somebody is going to take that.”
Multifamily rentals – apartments – are seeing a significant demand across all program types, whether it be market-rate rentals or government subsidized housing.
The assessment surveyed 59 apartments in the city and 16 in the county. Out of 6,628 total units in Bowling Green, just 206 were found to be vacant, an occupancy rate of 96.9%. That rate sat at 93.2% when BNR examined the area in a previous assessment back in 2019.
Just 25 of the 1,052 units surveyed in the county were vacant, an occupancy rate of 97.6%. That rate was 97.5% in 2019.
None of the available units in either the city or the county fell under tax credit housing programs or were government subsidized rentals.
Out of the 59 city apartments, 23 of them maintained wait lists, with waits for tax credit rentals and government subsidized projects reaching up to two and four years, respectively.
The Bowling Green Reinvestment Area, which encompasses downtown and the north and west portions of the city, was examined as its own sub-section of the assessment. Just two of its 1,044 apartments were found to be vacant, an occupancy rate of 99.8%.
A total of 750 households are currently housed through the city’s Housing Choice Voucher Program, up by 21.8% since 2019. Just over 1,300 households are on the waitlist for a voucher, up from 900 five years ago.
“You have a shortage of multifamily housing,” Bowen said. “For property owners, this is great news. For the citizens, this is not good news.”
Out of the city’s stock of nearly 9,500 non-conventional rentals – things like single family homes, duplexes or mobile units – just 39 were found to be available to rent, good for a 99.6% occupancy rate.
Bowen said a healthy occupancy rate would be somewhere between 94-96%, and that Bowling Green would not be considered a healthy multifamily housing market.
Rents of market-rate rentals in the city have also increased since 2019, especially among more common unit configurations.
The median rent for one bedroom, one bathroom multifamily units in Bowling Green has gone up by 42.9% and the median rent for three bedroom, two bath units has jumped by 63.8% in that same timespan.
“You’ve got significant rent growth that’s far outpacing household income growth,” Bowen said.
In terms of rental conditions, BNR’s assessment found that about 1,900 Bowling Green households live in substandard housing, which includes overcrowded units or ones without complete kitchen or plumbing access.
BNR found that 7,745 renting households and 1,968 owner households inside the city are cost burdened, meaning they are putting more than 30% of their income toward housing.
This is exacerbated by the finding that a majority of the most common local occupations offer insufficient wages for a single earner to cover a typical rental. All common occupations lack sufficient wages to cover a typical for-sale unit.
Things don’t look much better in the realm of for-sale homes. The city’s for-sale inventory was discovered to have dropped by nearly 50% since 2018, with the assessment only finding two homes for sale in the city and two in the county listed under $200,000.
That number was a little higher inside the BGRA, as 11 of the 43 available units were priced under that mark.
There were 155 city and county units listed below that price point back when BNR completed its 2019 assessment. The median sale price has increased by $80,000 in the city and $97,000 in the county in the last five years.
Out of the available housing stock, the newest product – homes constructed since 2010 – was found to have a median price tag over $350,000 in both the city and county, putting the dream of owning a modern home out of reach for many.
“For folks that are trying to get in as a first-time homebuyer that would like to get something modern, they’re not going to be able to afford it,” Bowen said.
BNR solicited input from stakeholders, like real estate developers, and found that items like land, labor and material costs are the largest barriers to development.
“We’re seeing this market after market,” Bowen said.
Resident and commuter input found that rentals below $1,000 a month and for-sale units priced below $200,000 are key needs. About one-fourth of the employers surveyed said that housing is having an impact on them, and the majority of them said they would be more likely to hire more workers if local housing issues were resolved.
Some of BNR’s recommendations to address the gap include the establishment of a housing committee or the hiring of a housing director, the modification or implementation of new policies to encourage the creation of new housing units and the marketing of the area’s needs to developers that might not be looking at a place like Bowling Green.
Other solutions might include the issuance of a bond to cover affordable housing developments, which has happened in other booming cities. In 2022, voters in Asheville, North Carolina, OK’d a proposition to issue two bonds, totaling $70 million, to conserve natural spaces and develop affordable housing units.
Ultimately, Bowen said local governance alone won’t be able to solve the shortage – “they can assist, but it’s really going to be the private sector.”
The assessment did identify 16 available-for-purchase sites that could potentially be a fit for future housing developments inside city limits, peppered along arteries such as Scottsville and Russellville roads and Campbell Lane.
Brent Childers, director of neighborhood and community services, said the city can use the data collected by BNR as more leverage when it comes to writing affordable housing grants.
“Whenever the opportunity comes up, it allows us to articulate a better story of why affordable housing is so needed in Bowling Green,” Childers said. “Really we procured this on behalf of the community, so now we have this resource that the entire community can use – the development community, the lending community – as a guidebook on what demands are out there.”
He said the city and county can’t control interest rates, pandemics or natural disasters like the 2021 tornadoes that cut into an already depleted housing stock, but the entities can work to put attention on immediate needs.
“The market is going to do what the market’s going to do,” Childers said. “All we can do is educate about what the demand is.”
The full assessment can be found on the “featured links” section on the city’s website.