by Brenée Goforth
Communications Associate, John Locke Foundation
Last week, the Charlotte Observer published an article on the intersection of wages and affordable housing. The story reads:
Consider Charlotte’s affordable housing crisis as a math problem. Housing costs are too high. Wages are too low. How do you solve it?
So far, the community has focused on half the equation, raising and spending tens of millions to build and subsidize affordable units, while largely ignoring the issue of poverty-wage jobs.
Many housing advocates say that’s a mistake. In a city where low-paying jobs are a significant and growing part of the economy, Charlotte can’t build its way out of this problem, they say. The community needs to address wages, too.
The story’s reporter, Pam Kelley, explains:
North Carolina’s minimum is the same as the federal minimum wage – $7.25. But in Mecklenburg County, a living wage – the hourly pay required to cover necessities – is significantly higher. The MIT Living Wage Calculator puts it at $12.58 for a single adult, $24.69 for an adult with one child. Other living-wage models produce even higher minimums.
The article featured JLF’s policy stance, written by Jon Sanders, in opposition to mandated minimum wage increases as a solution to housing affordability. The story reads:
Opponents of wage increases, such as Raleigh’s conservative-leaning John Locke Foundation, cite a 2014 report in the Journal of Labor Research that predicts raising North Carolina’s minimum to $10.10 would kill as many as 50,000 jobs. Urban areas with low unemployment, like Charlotte, could weather the hit, but it would be hard on rural areas, says Jon Sanders, the foundation’s director of regulatory studies.
Rather than requiring minimum-wage increases, housing affordability can be increased by removing restrictions on housing that keep the supply low. In a research brief published last week, Jon Sanders wrote:
Planners, policymakers, and other concerned citizens want more affordable housing options and less traffic congestion. But instead of more regulation, the way to bring those things about more effectively may be less restrictive land-use and other regulations. With fewer government obstacles and more freedom to operate, people can respond to market needs more quickly and in a greater variety of ways.