Moody’s report: Georgia housing deficit ‘acute,’ short 41,000 homes

“The imbalance between the nation’s housing demand and supply is much more localized than the national numbers and public dialogue suggest,” says the report.

In Georgia, there was a shortage of about 35,000 rental units and a 41,000 deficit in the homeowners’ market, according to data researchers shared with The Atlanta Journal-Constitution.

Analysts with Moody’s Analytics; the nonprofit Reinvestment Fund; the Urban Institute think tank; and mapping tool PolicyMap said the findings could help officials make more informed decisions about which parts of their cities need more housing and which don’t.

“It was really important to show these gaps and overages at a very localized level. What we wanted to be able to do was enhance the ability of people like (Mayor Andre Dickens) … to know (which) places are short,” said Ira Goldstein, senior adviser of policy solutions at Reinvestment Fund.

The report is timely, as Democrats and Republicans in Congress have proposed a bipartisan housing bill called the Renewing Opportunity in the American Dream (ROAD) to Housing Act, which includes provisions to increase housing supply.

Still, Moody’s report argues there is “remarkably little grasp of the scale or contours of the challenge,” as previous estimates failed to reach a consensus.

That’s why analysts decided to look at the crisis at the local level.

In Atlanta, the city-level analysis on PolicyMap reveals the tapestry of the city shortage’s in rental housing, with some pockets of surpluses offset with large swathes of the city where there is not enough housing.

PolicyMap CEO and founder Maggie McCullough said the rental shortage in the city is about 4,740 units, with a shortage of 3,360 owner-occupied units. In census tracts with a surplus, there is a rental market surplus of about 2,580 units and a owner-occupied surplus of about 560 units.

Moody’s report found regions with the most shortages were in the industrial Midwest, parts of the Southwest and the Southeast, including Alabama, Florida, South Carolina and Georgia. Nationwide, the analysis found that the shortage was more pronounced in rental markets.

Atlanta Regional Commission’s Samyukth Shenbaga said the high cost of land, zoning and permitting regulations, and NIMBYism — the Not In My Backyard movement — were all contributing factors in the metro region, with Gwinnett, Cobb, DeKalb, Fulton and Forsyth all facing significant demand for housing.

Another recent study “Short Supply: How Many More Homes Does Georgia Need?” found that the state was not keeping up with population growth and that 94 of the state’s 159 counties were undersupplied, with the most acute deficit in Fulton County, where there is an estimated 75,000-unit shortfall.

“Every year, if you’re not building more and preserving more, you are falling behind in terms of economic competitiveness. People are going to make decisions about not moving to your region based on the fact that it’s not affordable,” Shenbaga said.

Moody’s Analytics chief economist Mark Zandi said high building costs were also partly to blame, and that construction of luxury apartments and high-end single family homes had led to an oversupply for higher earners.

However, those developments were more attractive to builders than the middle-income market, which lacks government subsidies, he said.

“It’s just not economic for builders to build at that price point because the cost of building is so high,” Zandi said.

One of the report’s most striking findings was that national shortfalls are most severe in the workforce rental market — or the kind of housing police officers, nurses, teachers and other middle-income earners rely on — rather than in the low-income neighborhoods.

“There are many parts of the country where there are shortages there, but broadly speaking, that’s not where the problem lies,” Zandi said, explaining that federal government assistance from the Low-Income Housing Tax Credit, and other state and local subsidies could be helping to fill in the gaps.

To create maps at the local level, analysts compared local vacancy rates to a baseline from 2012 to 2018 when the market was more stable — after the recession and before the COVID-19 pandemic.

For the national numbers, analysts compared today’s vacancy rates to the baseline for 1985—2000, when vacancy rates averaged about 3.8%, concluding that there are fewer vacant homes and not enough housing for people who want it. The report finds an 800,000-unit deficit because of the vacancy-rate gap.

Using the most recent American Community Survey and Census Housing Vacancy Survey data, the report also looks at “pent-up” households, or those that want to buy or rent a new home but can’t afford it.

Those pent-up households account for another 1.2 million units that are needed to address the shortage, bringing the total deficit to 2 million.