By Jamie Miller
The pandemic-era housing market is white-hot and unpredictable. It even tricked Zillow’s algorithm into making huge forecasting mistakes —mistakes that cost the online real estate company a half billion dollars.
Housing prices are surging at a record pace, rising 19.8% year-after-year in August, according to the S&P CoreLogic Case-Shiller national home-price index.
There are several factors contributing to this aggressive inflation. Home building has become more expensive due to labor shortages. Global supply chain backups have driven prices of lumber and other building materials up.
There is a high demand for homes, but years of under-building has caused a low inventory. According to USA Today, five million more homes are needed for supply to catch up to demand. This imbalance in the housing supply is also leading to higher rental prices as demand for rental units outpaces supply.
College students, including University of Georgia senior Paxton Dobbins, are one group that are being affected by rental inflation.
“Our rent went up $75 a month this past year, and I cannot imagine what they are going to charge renters next year with this market,” Dobbins said. “It is unethical to milk money out of college kids already having to pay for their education. We need more affordable options.”
Other economic factors have contributed to overall rising costs of being a homeowner or renter. For example, the U.S. Bureau for Labor Statistics reported that energy services (gas and electricity) have gone up an average 8.5% for all urban customers across the U.S. since September 2020.
Increasing rents combined with rising energy costs have made housing unaffordable for many, leading them to seek out affordable housing programs as a potential solution to COVID-era housing inflation. Serving college students and other low-income groups, these programs benefit an entire spectrum of people.
The Georgia Supportive Housing Association (GSHA) – a non-profit membership network – is working towards strengthening the housing resources in Georgia through stable housing and supportive services. A big part of this mission is affordable housing. But to provide that service, they must find actual housing.
Mariel Sivley, executive director of GSHA, says that COVID-19’s market inflation has made that hunt more challenging.
“It was hard before COVID-19 to find landlords and to do that relationship building. It is a lot more challenging now with the tight market because the rents are higher, and they can be choosier,” Sivley said.
But the exuberant amount of federal funding that will be available for distribution in the coming months is providing hope for non-profits like GSHA who are struggling to find housing resources. Funding allocation decisions are in the hands of the Georgia General Assembly, who will finalize selections in March 2022.
“It seems like it is so easy for us to have a choice about where we want to live…but some people have no voice. Giving them the grace of having a choice about what kind of community they get to live in, and for them to feel safe and happy with that choice would be amazing,” Sivley said. “It would be amazing for there to be enough [housing] opportunity for there to be choice.”
Jamie Miller is a journalism student at the University of Georgia.
