.png)
What is Workforce Housing?
Workforce Housing is affordable, conveniently located housing for individuals with low to moderate income. Since the specific dollar range defined as Workforce Housing varies, it is measured as a percentage of Area Median Income (AMI). Housing and Urban Development (HUD) broadly defines workforce housing as targeting individuals earning between 60% of the Area Median Income ($46,200 for a family of 4 in Forsyth County) and 120% AMI ($92,400). TCHC is focusing its efforts on housing for essential members of the Forsyth County workforce earning between 30% AMI ($23,220) and 60% AMI ($46,440).
Per HUD, housing should comprise a maximum 30% of household income. So a family earning $46,200 should be spending no more than $1,155 per month on rent. Yet a modest 2-BR apartment in Winston-Salem can run about $1,500 per month.
Who Benefits from Workforce Housing?
While the mission of TCHC is to focus on workforce housing for Forsyth County residents within 30%-60% AMI, an often overlooked factor with workforce housing development is that it benefits all members of a community. The two largest employers in WS/FC are Novant and Atrium WFBH. For these hospitals to operate and provide for the healthcare needs of all WS/FC residents, their employees need affordable, accessible housing. Restaurant staff who feed these and other community members also need workforce housing, as do the police and fire crews who protect them and the teachers who instruct their children.
How AMI Translates
Certified Nursing Assistant
Food Service Worker
Teacher's Aide
Landscaper
30% AMI
of $77,400
$23,220
affordable rent: $580/month
60% AMI
of $77,400
$46,440
Teacher
Police Officer
Firefighter
Social Worker
affordable rent: $1,161/month
% of Winston-Salem/Forsyth County
Households by Income [1]
8.1%
40.5%
31.3%
13.5%
6.5%
The Housing Crisis
The impact of the national housing crisis can be felt throughout Forsyth County, most acutely in the affordable and workforce housing markets. A 2018 Housing Needs and Assessment study, commissioned by the City of Winston-Salem, uncovered a 16,244-unit shortage of workforce and affordable housing rentals. Most of these units are needed to support our community’s workforce. [2]
Factors Contributing to the Housing Crisis in Forsyth County
Population growth, behavior, and trends
-
2010: 350,670 people, 137,682 households [3]
-
2021: 385,523 people, 155,985 households [4]
-
2030 projected population: 416,043 people [5]
-
Older populations moving in, younger moving out
Supply and demand
-
Housing starts have not fully recovered from 2008 recession [6].
-
Housing stock is aging.
-
Shortage of labor and available land limit new construction.
-
Housing costs have significantly outpaced income growth.
The Financing Gap
Market-rate development is easier than affordable development, because a developer generally relies on just two primary sources of capital: private equity and debt. The amount of debt a development can secure is based on the amount of income that can be generated by future tenants’ rental payments minus expenses. In a market-rate deal, a new development is feasible when the expected cash flow from rent—coupled with contributed equity—will sufficiently cover the debt and development costs while still yielding an acceptable rate of return.
​
In the case of below-market-rate housing, the decrease in rental income means the math doesn’t work for developers. So they must rely on various forms of subsidy to help close the gap between the affordable rent for lower-income households and market-rate rent needed to make the project feasible. The federal gov’t created the Low Income Housing Tax Credit program (LIHTC) in the late 1980’s, which has become the most important source of funding for affordable housing in the United States. The program leverages tax credits to provide a much-needed source of equity for developers building affordable housing. LIHTC brings private capital to the table through sellable tax credits, allowing developers to take on less debt, which in turn can allow them to reduce rents.
​
However, the equity generated from the tax credit is still not enough to close the gap between development costs and the reduced rents that would be affordable to households with low to moderate incomes. In addition to LIHTC equity, developers must piece together multiple sources of permanent financing, referred to as “The Capital Stack.” These additional funding subsidies can come in many different forms to fund capital and operating costs—including grants from public or private sources and loans from county or state government agencies.
"
We have accepted, so to speak, a second Bill of Rights under which a new basis of security and prosperity can be established for all — regardless of station, race, or creed …Among these are… the right of every family to a decent home.
​
—Franklin D. Roosevelt, State of The Union (January 11,1944)