Perceived reasons for paying more for housing in metro Atlanta: Results from the 2018 Metro Atlanta Speaks survey

ABSTRACT

Various factors may influence housing prices paid by residents, and these factors can be grouped into the demand- or supply-side factors. However, the empirical literature has not adequately investigated whether or not residents perceive that they pay more for housing, and if so, whether paying more is associated with the demand-side factors such as housing attributes or neighborhood/locational amenities, or supply-side factors such as a lack of affordable housing alternatives. Using the 2018 Metro Atlanta Speaks survey, we find that millennials, Blacks or African Americans, Hispanics or Latinos, residents with children, and relatively higher-income residents perceived that they are paying more because of the demand-side factors such as housing attributes or neighborhood/locational amenities. Conversely, working-age residents, females, high school graduates or less, and renters perceived that they are paying more due to the supply-side factors such as a lack of affordable housing alternatives. In a situation where residents are to choose one factor associated with housing, millennials and Blacks or African Americans prefer the quality of housing, relatively higher-income residents prefer local schools, new residents to the area prefer neighborhoods, and Hispanics or Latinos and employed residents prefer location over any other factors.

Acknowledgments

This article benefited from very helpful comments provided by three anonymous reviewers and the editor. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of the Atlanta Regional Commission.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1. Since fair market rent (FMR) for a two-bedroom apartment in metro Atlanta is $1,031, a worker would need to earn $3,437 a month to afford FMR in metro Atlanta (National Low Income Housing Coalition, 2018). Since transportation costs account for nearly 23% of income for these low-income households, housing affordability becomes a serious concern when transportation costs are taken into account (Atlanta Regional Commission, 2018b).

2. Between 2010 and 2014, nearly 25,000 new luxury apartment units were built in the City of Atlanta (Immergluck et al., 2016; Yu, 2016). A new study by RentCafe, a real-estate firm indicates that 90% of new apartment constructions completed in the City of Atlanta in 2017 and 2018 were luxury apartments; this rate is above the national average by 11 percentage point (Balint, 2018).

3. The survey instruments, results and interactive dashboard, and main highlights of the Metro Atlanta Speaks survey are available at https://atlantaregional.org/atlanta-region/regional-data-resources/metro-atlanta-speaks-survey-report/or https://33n.atlantaregional.com/2019-metro-atlanta-speaks-data-dashboard.

4. When there are multi-collinearity problems, the estimates remain BLUE, but the variance of the estimates will be high resulting in imprecise estimates (and low t-values) (Gujarati, 2003, pp. 341–47).

5. A Gallup survey indicated 59% of millennials are single and have never been married (Fleming, 2016).

6. A recent study indicated Whites had lower odds to commute on transit, compared to nonwhites in metro Atlanta (e.g., Blacks or African Americans, Hispanic or Latinos, or Asians) (Ghimire & Lancelin, 2019).

7. Brookhaven is the first city in metro Atlanta to adopt a mandatory citywide inclusionary zoning ordinance, according to which, 10% of the new residential housing projects must be workforce housing (Bagby, 2018).

8. Nationally, the construction cost of a typical manufactured home, on average, is $33 per square foot compared to $77 of a site-built home (Norton, 2019).

Additional information

Notes on contributors

Ramesh Ghimire

Ramesh Ghimire is a Spatial Economics Research Scientist at the Atlanta Regional Commission in Atlanta, Georgia.

Jim Skinner is a Senior Principal Planner at the Atlanta Regional Commission in Atlanta, Georgia.