The price of housing is rising across the U.S., and nowhere is this more apparent than in Georgia. According to the National Low Income Housing Coalition, a worker earning minimum wage in Georgia must work 97 hours per week to afford a two-bedroom apartment. For a one-bedroom apartment, they would need to work 84 hours per week. This leaves many Georgians struggling to find affordable housing. In fact, Georgia ranks as the 41st worst state in the nation for affordable housing – that’s very low down the list. There are several factors contributing to the affordable housing crisis in Georgia. The state’s population is growing rapidly, but the housing supply is not keeping up with the demand. This is causing prices to rise and making it difficult for people to find affordable living places.
Let’s find out more.
Current Situation
The problem is only getting worse. Between 2000 and 2016, the cost of housing in Georgia increased by 50%, while incomes only rose by 26%. This means that housing is becoming increasingly unaffordable for Georgians.
As of 2022, an estimated 1.7 million households in Georgia are cost-burdened, which means they spend over 30% of their earnings on housing. Of these, nearly 1 million are extremely cost-burdened, blowing over 50% of earnings on housing.
The lack of affordable housing has many negative consequences for Georgians. It is causing many people to struggle to pay for other basic necessities like food and healthcare. It is also leading to an increase in homelessness.
The lack of affordable housing is also hurting the state’s economy. It’s making it difficult for businesses to attract and retain workers. It’s also leading to an increase in traffic congestion as people are forced to live further away from their jobs.
Population Growth
Between 2010 and 2018, Georgia’s population grew by 18.3%. The population of Georgia grew by 1.7% in 2020 and by 1.5% in 2021.
In 2010, the population was 9,687,653 and in 2018, it was 11,519,958. This growth is projected to continue, the state’s population is expected to reach 10.4 million by the end of 2022 – with the population reaching 12.8 million by 2030.
This growth is driven by net migration, which is projected to be positive in both years.
Housing Costs
The prices in Georgia are at an all-time high because of the supply and demand crisis.
The median rent in is $825 per month.
The median home value is $319,431.
The median monthly mortgage payment is $1,100.
Income and Poverty
A reason for this affordable home crisis lies with the people. As they can afford the houses in the ever-increasing marketing.
The median household income in Georgia is $61,000.
The poverty rate in Georgia is 21.3%.
Affordability
The average fair market rent for a two-bedroom apartment in Georgia is $793, which is quite below the national average of $1,295. The average rent for a one-bedroom apartment in the state is $658, which is also below the national average of $1,164.
However, these averages can be misleading, as they do not account for the wide range of rents across the state. For example, in Atlanta, the average rent for a two-bedroom apartment is $1,861, nearly double the state average.
Homelessness
Georgia has a serious homeless people situation as well.
There were an estimated 10,234 homeless people 2020.
Around 60% are sheltered, and the other 40% are unsheltered.
Housing Needs
There is an affordable housing crisis in Georgia. In 2020, there was a shortage of over 207,244 affordable and available rental homes for extremely low-income Georgians.
According to the Department of Community Affairs, low-income households earn 30% or less of the area median income. For a family of four in Georgia, this equates to an annual income of $25,950 or less.
Closing Thoughts
The affordable housing crisis is having a devastating impact on Georgians. However, for investors, it’s a great opportunity to invest. It’s time for state and local leaders to take action to address this growing problem.