City Talk: High costs, inadequate supply demand more aggressive housing policy
This is the City Talk column by Bill Dawers, a longtime contributor to the Savannah Morning News.
Home values have nearly doubled in Chatham County during the past seven years.
According to the Zillow Home Value Index (ZHVI), the value of a typical home in Chatham County rose from about $177,000 in May 2017 to $337,000 in May 2024.
If values had merely kept pace with inflation, a home worth $177,000 in 2017 would be worth about $226,000 today.
In a pattern repeated in many places across the nation, home values in Chatham County were increasing steadily through the long recovery after the 2007-2009 recession, but values surged in the second half of 2020, largely due to pandemic-related factors.
Values in the local area seemed to be leveling off in early 2023, but the increases have continued to outpace inflation for the past year.
The trends have been similar across much of Georgia, although the values on the coast have increased at a faster pace than the statewide numbers over the past year.
Some areas that are likely attracting investors have seen especially strong gains. The typical home in the 31415 zip code, which includes much of west Savannah, has increased in value from about $46,000 in 2017 to $153,000 today, according to the Zillow estimates.
Obviously, the increases in home values are good news for many people, but home ownership is getting further out of reach for many other folks, including young families and recent entrants into the workforce.
Strong demand and higher values have contributed to the well-documented increases in rental prices.
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According to Zillow, the median rent in Savannah is $2,250 per month, which by definition is unaffordable for most households.
In a bit of good news for prospective homebuyers, the number of active listings in Chatham County is up considerably compared to a year ago, according to data at SavannahNow. The increase in supply should put some downward pressure on prices, which currently seem out of whack with prevailing wages.
On the other hand, demand for housing seems likely to increase due to a variety of factors.
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The new Hyundai Metaplant is gearing up for production. The plant is in Bryan County but the proximity to Chatham, Effingham and Bulloch counties should fuel population growth across a broad area.
Despite residents’ concerns about rapid growth, the Georgia coast will probably continue to be an attractive option for transplants from other states for the foreseeable future. The large Baby Boom generation continues to move into retirement, local hiring will remain strong and the beach still beckons.
It remains to be seen whether the downward pressure on values and prices offsets the various upward pressures.
Public policy throughout the region is not keeping up with the challenges. Officials are hampered by the sheer number of separate bureaucracies and arcane political divisions, but that shouldn’t be an excuse for faster action to add to the supply of housing and enhance affordable options.
Good ideas abound. Density bonuses could help fuel new construction. The City of Savannah could pass a long-delayed inclusionary zoning ordinance. More aggressive efforts to allow commercial-to-residential conversions could dramatically expand the housing supply with minimal environmental impacts.
Obviously, there won’t be any dramatic changes overnight, but if leaders in Chatham County and across the region fail to respond aggressively enough to the lack of housing and the high costs of housing, we will be doing a disservice to the next generation.
Bill Dawers can be reached via @billdawers on X and [email protected].
This article originally appeared on Savannah Morning News: City Talk: High costs, low supply require a better housing policy