Apple and Google will bring new jobs to the Triangle. Can we handle the growth?
The world’s most valuable technology company announcing it will set up shop in the Triangle is no ordinary event — not even for an area that is getting used to big announcements.
Apple Inc.’s plan to establish a campus in Research Triangle Park, investing up to $1 billion in North Carolina over a decade, including $552 million on the new site, is the biggest in a series of major tech developments coming to the region.
Fujifilm Diosynth is bringing 725 jobs to Holly Springs. Invitae is bringing 374 to Morrisville. And a month before Apple’s news, Google announced plans to bring 1,000 jobs to Durham.
The growth presents opportunities but also challenges, as highly paid workers — Apple salaries will average $187,000 — enter a housing market where demand has already squeezed supply, driving home prices to unprecedented levels.
Some worry the influx will make existing inequities worse.
“It’s not doing anything for those low-wealth residents who are, already, disproportionately impacted by the lack of affordable housing,” said Yolanda Taylor, a housing advocate. “And it won’t do anything for those folks currently struggling to pay rent.”
The Triangle’s housing supply
High demand coupled with increased material and labor costs during the COVID-19 pandemic have pushed home prices up 15% to 20% in recent months, said Amanda Hoyle of real estate data firm Zonda.
Average Triangle home prices have jumped to nearly $400,000 from around $340,000 at the start of 2020.
The Triangle currently has less than one month’s supply of housing for sale, meaning it would take less than 30 days for all available homes to be sold, if no more were listed for sale. Experts say a balanced market should have around a six-month supply of homes, The Charlotte Observer has reported.
Some 73,000 new single-family homes are planned or underway in the eight-county greater Triangle region. “But every project has its nuance and challenge to getting started,” Hoyle said, “so there’s no guarantee that all of those lots will be developed as planned.”
In a 10-mile radius around the Apple site, there are 127 subdivisions with about 3,000 new homes that were sold in the last 12 months, Hoyle said. Zonda data shows plans for another 7,500 homes, but “most of those homes could be built and sold before the first building at the Apple site even opens,” she said.
Nationally, homebuilders have high confidence they can meet the demand, according to the National Association of Home Builders.
“For Raleigh-Durham, I think it’s important for the local municipalities to know that economic and employment growth is inevitable,” said George Ratiu, a senior economist with Realtor.com. “It will have to be addressed by intelligent, and more importantly, well thought-out zoning. It will be important to boost the supply pipeline, to make zoning favorable towards development.”
Ratiu has watched how Amazon’s plans to establish its second headquarters in northern Virginia has affected the housing market there.
“We saw an immediate impact to demand of prices, meaning a lot of people started speculating that the move would bring lots of demand and lots of workers,” he said. “Prices adjusted, and within a year they had jumped almost $100,000.
“However, last fall we followed up on that,” he said. “Basically the market returned to normal market dynamics … the speculative impact has more or less moved on. Expect similar things to likely take place for Raleigh. We’re going to see investors suddenly take a much closer look.”
Can supply meet growth’s demand?
It’s not clear how fast the Apple jobs will affect the Triangle market.
“Where’s everyone going to live?” makes a for a nice headline, but it isn’t exactly accurate, said Stacey Anfindsen, a Triangle housing market analyst.
“We’re reacting to it now, like ‘Oh my gosh, Apple is coming here tomorrow,’ but they’re not,” he told The N&O. “Who knows what the market’s going to be like three years from now? There’s certainly going to be more apartments; they’re certainly going to be more homes.”
Anfindsen said, with proper planning and the Triangle’s already rich talent pool, the area could absorb the growth in tech jobs without worsening market conditions during the years it takes to develop the Apple campus.
Otto Cedeño of Movil Realty and the Durham Association of Realtors rebuts those who say there’s no room in the Triangle area for future growth.
“People in Raleigh-Durham and the area of RTP are being selfish making those comments, because they’re forgetting about the adjacent towns that are in need,” said Cedeño. “What the towns surrounding the Triangle need the most is people to go live there and stimulate their economies.”
Apple’s announcement is a golden opportunity for the Triangle’s surrounding towns — like Mebane, Dunn, Creedmoor, Sanford, Roxboro — where Cedeño believes new Apple and Google workers can buy homes, and where astute owners will move to once they sell their homes in denser Triangle areas that have skyrocketed in value.
If you can point to areas within a 20- or 30-mile radius of RTP, you’ll see where future homebuyers will want to live, he said.
Lack of affordable housing isn’t new
But some worry the newcomers will price others out of the local market.
Nearly 1 in 4 Wake County households are cost burdened, meaning they spend more than 30% of their family’s budget on housing and utilities, according to the N.C. Housing Coalition. And more than 40% of Wake County’s renters have trouble affording their homes.
In Durham County, nearly 1 in 3 overall households, and nearly 50% of renters, have difficulty affording their homes, according to the housing coalition.
Dorcas Ministries helps people in need primarily in western Wake County, where Apple is coming. They saw demand for their services quadruple in 2020 because of the COVID-19 pandemic, said Sally Goettel, president of the board of directors.
“The trouble with gentrification and with people getting pushed out of the housing market did not start with the Apple announcement,” she said. “This may exacerbate the problem in some ways, but it is one we can address and have the opportunity to do so if we have the community will to address it.”
Many people who have historically lived in Raleigh’s urban tier have already been pushed to the suburbs of Wake County, said Taylor, the affordable housing advocate.
It’s fine if people want to move, but as development has picked up, people are now being pushed out of Wake County altogether to places like Rocky Mount and Wilson, she said.
“We don’t want to become a type of exclusive city where only the wealthy can live,” Taylor said. “I definitely think this move by Apple to the Triangle is a tsunami of gentrification waiting to happen, because we are already seeing an affordable housing crisis.”
Taylor was pleased to see Apple commit funds to local schools and to a state infrastructure fund but said she wished the incentive package had included affordable housing.
The responsibility of local governments
When people who work in hospitals, grocery stores and restaurants are priced out of their homes, it increases traffic problems and changes the culture of communities, said Nathan Spencer, executive director of WakeUp Wake County, a nonprofit that focuses on transportation and growth issues.
“We need to find a way to keep the people we have spent the last year calling ‘essential’ living close to where they work,” he said.
When you look at Raleigh’s peer cities, municipal and community leaders says they wished they’d purchased more land along their transit corridors and better incorporated their affordable housing plans around transit, Spencer said.
“We are definitely behind,” he said. ”When it comes to things like bus rapid transit and land acquisition around there, we should have been buying land four or five years ago, and there were definitely warnings.”
Raleigh recently purchased property along New Bern Avenue, which will see the city’s first bus rapid transit line. Raleigh voters also recently backed an $80 million affordable housing bond that will include more money to buy land along transit lines.
Durham voters, meanwhile, backed their own $95 million affordable housing bond, the state’s largest, as part of a five-year plan to add affordable housing. The Durham Housing Authority will use $59 million of that to create 2,500 housing units, said Anthony Scott, chief executive officer of the housing authority.
Local governments are taking steps, but cities should also change development rules and zoning regulations to add “missing middle” housing, said Jacob Rogers, chief executive officer of The Triangle Community Coalition.
Missing middle housing is normally defined as the mix of housing between single-family homes and apartments like townhomes, duplexes and cottage courts.
After a year of debate, Durham passed zoning changes that allow for varied housing in neighborhoods near downtown. And Raleigh is considering a change to allow more “missing middle” housing throughout the city.
“If you have the political will to make economic development a priority you have to have the political will to accommodate that economic development, those people, those jobs, those services,” Rogers said.
“So if housing is a true priority, and if economic development is a true priority, we have to see housing as an infrastructural need, and they have to make those political decisions fast and now.”
This story was originally published May 3, 2021 at 5:30 AM with the headline "Apple and Google will bring new jobs to the Triangle. Can we handle the growth?."
