Edy Aguilar works in and has friends in Huntsville, Ala., and is excited to get involved in the city’s ever-growing community. But finding an affordable place in the city is just beyond her reach.

Huntsville is a hotspot for technology and aerospace jobs, with more jobs coming to the city every year. The city has expanded its entertainment amenities by adding  attractions like Top Golf and minor league baseball’s Trash Pandas, complete with a new stadium, Toyota Field.

The city is on track to be  Alabama’s most populous city, with census estimates showing Huntsville could hit that mark this year. Housing prices are rising too, with the median sale price of a home in Huntsville and the nearby growing suburb of Madison up $100,000 since January 2018. The median sale price of homes in Huntsville and nearby Madison  are now $267,000 and $280,000, respectively.

“I love Huntsville. I’m always here every weekend visiting my friends. It’s hard to not want to live here,” Aguilar said, who now lives in northeast Alabama. “ I’m ready to be here and ready to be a resident. I’m ready to contribute and be involved with the community.”

But with the aggressive housing markets and high rents, Aguilar said she feels hopeless about her possibility of living in the Rocket City. Currently, she commutes an hour each way to work. “I know I may not have an engineering job or something fancy but I feel like paying over $1,000 for rent–I can’t fathom it, honestly. That’s just a lot of money to me to put away on something you don’t really own,” Aguilar said.

Huntsville is prime real estate

But new employees like Aguilar aren’t the only people who view Huntsville as an attractive place to live and work. Investors looking to cash in on  a hot real estate market are  making it more difficult for the city to retain its existing affordable housing, city officials said.

In addition to the city’s growth and rising housing demand, the COVID-19 pandemic exacerbated the need for affordable housing, among other community services like rental assistance and mental health needs, social services professionals say.

“Over last year, our numbers in all of what we do went up. It didn’t go down. There are moments where it’s like, ‘Holy moly.’ It’s a lot,” said Darin Geiger, executive director of Family Services Center in Huntsville.

The center provides temporary housing for residents facing homelessness and financial counseling services for low-income residents looking to purchase a home.

“There is a lot of wealth and rocket scientists here, but having affluent individuals doesn’t mean there isn’t a share of folks here who have struggled with generational poverty,” Geiger said. “We want to get things in here to attract people to the city. Our hope is that we recognize that anytime we’re doing that, the need for affordable housing is going to continue to rise.”

The per-square-foot cost of a Huntsville-area home has grown since about 2015, a cost that accelerated a faster rate in early 2021. The housing stock has also decreased, with a sharp loss of available housing happening during the pandemic.

A hot real estate market combined with more people moving to Huntsville and historically low interest rates for mortgages has made the purchasing a house in Huntsville more daunting. Residents and real estate agents described bidding wars that result in homes selling for more than  $30,000 over the list price.

Aguilar said the prospect of bidding war has made her less likely to consider buying a home.

The most recent home sales data reveal a deeply threatened housing stock. Matt Wilkins, a real estate broker with Blue Dot Real Estate Alabama, estimates that the local housing stock would dry up in less than three weeks.

The availability of homes less than $200,000 is especially low. Most first-time buyers are looking to buy a home in this range, which makes it even harder for low-income and first-time buyers to find a home they can afford, Wilkins explained.

Even for people not necessarily looking to buy a home, the prospects for affordable rental housing are slim. It’s been a concern for the community since before COVID-19 threatened construction material supply chains, leading to higher rents and construction costs.

City officials say the rising cost of land and competition from investors is making it more difficult for the city to buy and preserve affordable housing like one development in the Terry Heights-Hillandale area built in 2015. The development, designated for people making less than 80% of the area median income, was built using $7 million in federal HOME and Community Development Block Grant funds, according to city officials. Huntsville City Schools also spent $20 million to build Sonnie Hereford Elementary School, which is at the center of the Terry Heights Development, according to city officials.

Scott Erwin, Huntsville’s manager of  community development, said today it would be much harder to build the Terry Heights development under current market conditions.

“Now, we are competing with out of state investors coming in and buying. I have no opportunity to invest because I can’t get to the table fast enough with the funding,” he said, adding that it’s harder for the city, which has to be “slow and deliberate” with this type of purchase, to have a seat at the negotiating table.

Ain’t no magic bullet 

In order to stay on top of housing demand and changing community demographics, the city has to stay up to date with national zoning and construction trends to ensure a variety of housing available, said Dennis Madsden, Huntsville’s manager of urban and long range planning.

“For a long time we had been building two formats: multifamily apartments and then single family homes. When you have a diverse population and workforce, you need more diverse housing stock. Many cities struggle to update our zoning. We need to make sure we’re allowing that instead of making builders jump through hoops.

“If there’s not a varied [housing] stock, people either get not-enough-house or are forced to get more house than they can afford. We want residents to be able to right-size their housing,” Madsden said.

While the cost of construction and the rising cost of homes seems daunting, officials and real estate agents seem confident the market will reach a sort of equilibrium in the future. However, both local nonprofits and the mayor’s office have been concerned about affordable housing for nearly 10 years.

In discussing solutions for the affordable housing shortage, Madsden said there is no “magic bullet” for Huntsville.

“There is no one entity and one program you can use to solve affordability. It really requires a multi-agency and multi-program approach. Private sector, nonprofit and housing authority. People love a magic bullet — one program you can do to solve the problem. But it just ain’t out there,” he said.

This is part of an occasional series about how fast-growing Southern cities are addressing affordable housing challenges. Let us know if we should take a look at your city by emailing Anna Beahm at abeahm@reckonsouth.com.