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Alpharetta housing market reaches new heights

Study: New homes are beyond reach for many households

ALPHARETTA, Ga. — Alpharetta’s residential building boom is not keeping up with demand, and new homes for households earning less than $100,000 are almost completely out of reach.

That’s the word from a new report presented to the city as part of its update to the Comprehensive Land Use Plan. Since the update kicked off a year ago, the city has held online surveys and a number of steering committee meetings.

The housing element evaluates the adequacy and suitability of existing housing serving the current and future needs of the community.

Geoff Koski, president of KBA Advisory Group, said his firm began the study in January 2020 — before the pandemic — but its conclusions account for current available data. The trends present in July 2020 have not changed, in fact, they’ve accelerated, he said.

“The trends that we are identifying are still there, the price points have gone up, but the trends are still there,” Koski said.

Right now, national and regional housing trends point to demand for smaller, single-family housing both for purchase and for rent, he said. There is less overall demand for large homes. The trend toward smaller family homes, he said, should continue for at least another decade.

“One- and two-person households really prevail, and that’s where the growth in the market is,” he said.

For-sale will continue to occupy the larger share of demand, he said, but there is growth in demand for rental housing. Another trend that continues is demand for mixed-use centers where housing is interspersed with retail and office.

As prices continue to climb, the need for affordable housing, or workforce housing, will continue, Koski said. Not only that, but Alpharetta continues to outpace the Atlanta Region in population growth. According to KBA Advisory market data, from 2010-20, the city averaged 1.6 percent growth. Fulton County averaged close to 1.9 percent. The region as a whole posted an annual growth rate of about 1.5 percent.

The study suggests that in order for Alpharetta to continue to attract business and residents, additional housing of various types will be necessary.

Alpharetta Housing Study

Keeping up with the jobs

While Alpharetta has led much of the region in job creation over the past decade, it hasn’t experienced an increase in housing to accommodate those new employees.

Right now, the study shows about 45 percent of the households in Alpharetta have three or more people. Fewer than half of them have children. Yet, there are more single-family homes in the city’s housing stock than any other type.

“There will always be one- and two-person households that want a single-family home, but typically… they’re looking for an option,” he said. “It could be a single-family home, could be a townhome.”

To meet the new demand for housing, Koski said, it takes a mix, both owner-occupied and rental.

The study shows that, compared to neighboring cities and to the Atlanta Region, Alpharetta has and is adding jobs at a much higher pace. Housing growth has not kept up with the demand, Koski said.

“While you’ve added a lot of jobs, your housing hasn’t kept up at the same rate,” he said.

Alpharetta mayor says city must work to bring back business

Even so, city records show that 2018 saw the largest number of single-family building permits — about 500 — since 1998, the height of the city’s housing boom when just shy of 700 were issued.

And while homebuilding is robust, Alpharetta’s housing market does not produce newly constructed for-sale detached homes for under $300,000, the study shows. And, it produces essentially none between $300,000-$400,000.

“If your household, combined, is not making six figures, you’re out of the market for a new home — really anywhere in the region, but particularly here in Alpharetta,” Koski said.