How do the housing markets in Ohio’s largest metropolitan regions compare?

A surge of new home construction rang in the new millennium just over a decade ago, but that surge quickly ended when the now infamous housing bubble burst, subsequently leading to the Great Recession.

In recent years the economy has begun to rebound, but the housing market still has not quite come back. In particular, the home ownership housing market has not come back.

This had led to a new surge of housing construction as developers work to build product for a still growing U.S. population. Cities have seen much of this new apartment construction as the rebounding economy has coincided with the entrance of Millennials into the housing market.

The narrative has been that rentals are surging while home ownership is sagging, but according to newly released data from the U.S. Census Bureau, this common narrative is only partly true.

Home Ownership Rates in Ohio MSAs
Apartment Vacancy Rate in Ohio MSAs

In Ohio’s five largest metropolitan regions the data shows that home ownership rates have settled out around the same levels they were at nearly two decades ago. And while apartment vacancy rates have been plummeting in recent years, they are still higher than they were in the 1980s and 1990s.

Akron and Cleveland are virtually tied for the highest home ownership rates in Ohio at 66%, but this is down from their respective peaks of 80% and 77% around the height of the housing bubble. At 61%, Columbus scores the lowest of Ohio’s five biggest metropolitan regions in terms of home ownership.

Columbus boasts the state’s lowest apartment vacancy rate at 6%, which is approaching the capital city’s all-time lowest apartment vacancy rate of 5% in 1990. The Dayton region has the highest apartment vacancy rate in the state, with its apartments sitting empty nearly twice as much as those in Columbus.

Both when it comes to home ownership and apartment vacancy rate, Cincinnati seems to serve as the state’s trend line. For the year ending 2013, the Queen City had a home ownership rate of 63% and an apartment vacancy rate of 9%.

While the aforementioned data seems to cloud the discussion about housing market trends, additional data also shows that overall inventory and prices of owner-occupied units is decreasing, while inventory and pricing of rental units is increasing.

Locally, Cincinnati is in the midst of an apartment building boom, with thousands of units across the region currently under construction. While home permits have increased recently, those numbers pale in comparison.

Report: Cincinnati’s five-year outlook for building demolitions may approach 8,000

Home demolition photograph provided by Price Hill Will.

In September, city officials stood in Price Hill alongside state officials to announce plans to demolish up to 700 vacant and blighted buildings in Cincinnati. The funding for the ongoing effort comes from a state-wide program called Move Ohio Forward, which gives demolition funding to cities from money the state won in a settlement with large banks last year over the home foreclosure process and lack of property upkeep by the banks.

City officials estimate that there are currently 1,300 vacant and blighted properties awaiting demolition. The $5.84 million grant, when matched with $5.34 million from the Hamilton County Land Reutilization Corporation and $3.49 million from the City, will provide enough funding to cover just over half of the total amount of demolitions mandated its own ordinances. The final amount of demolitions, officials say, will vary from neighborhood to neighborhood.

“The Moving Ohio Forward Grant Program provides unprecedented blight abatement opportunity for the City to clear dangerous, obsolete buildings from neighborhoods, make way for redevelopment, and eventually raise property values,” Edward Cunningham, Property Maintenance & Code Enforcement Division Manager, told UrbanCincy.

In an effort to further control what happens with the cleared sites, the City of Cincinnati will work with Hamilton County’s new Land Reutilization Program in order to acquire tax delinquent properties. Once the buildings are demolished, the City will determine if the land can be used as parks, community gardens or rehabilitated into new housing. So far, however, only enough funding for lot restoration on 200 parcels has been identified.

In cases where the lots are private properties, and are not able to be acquired, it will be up to the property owners of the vacant lots to decide the future of their property. According to Cunningham, property owners will be allowed to maintain the lots, create parks, parking or new infill construction.

More Comprehensive Plan for Demolitions Needed
Property demolition has been used by many cities including Cincinnati as a method of addressing problem vacant buildings that have been condemned because they are hazards to human health and unsafe to occupy. While the debate on the impacts of foreclosure and vacant property is far from over, some of these buildings are “too far gone” in the eyes of building inspectors that they legitimately need to come down. And according to Cunningham, the buildings being demolished under this program are buildings that are beyond repair.

Once the demolitions are completed, one-by-one, it will create more land between occupied houses thus negatively impacting the completeness of the neighborhood’s form. Without a strategic plan, vacant and unmaintained lots could end up degrading neighborhoods in the same manner as blighted homes; however, vacant lots tend to be easier to maintain and do not pose as much of a risk as a standing structure.

Furthermore, demolitions made through this program on private land will place the cost burden on the property. Should the property owner not pay the assessment for the work, then the property could be foreclosed by Hamilton County, which would then open the land up to redevelopment. This process, however, does take a considerable amount of time and offers no guarantee of redevelopment.

Projected Housing Units in Five Year Demolition Pool by City for Ohio’s “Big Eight” Cities. Source U.S. Census Bureau.

The challenge of increasing amounts of abandoned and blighted housing is not symptomatic of Cincinnati alone, as many older industrial cities are facing the similar problems. A recent report from the Brookings Institute found that Cincinnati might have close to 8,000 buildings eligible for demolition in the next five years. The report also stated that while the demolitions have the potential to stabilize neighborhoods, excessive regulations and costs prevent cities from demolishing the amount of housing that should be demolished on an annual basis.

To overcome these hurdles the report makes a series of recommendations for cities to devise their own strategic demolitions plan.

“Planners, urban designers, and residents must together evaluate how demolishing a particular building will affect the texture of its block or area,” the Brookings Institute stated in Laying the Groundwork for Change: Demolition, urban strategy, and policy reform (2012).

Cities such as Cincinnati need to have a level of transparency in place that allows for neighborhood input on the reuse of the newly created vacant lots. It is not merely enough to encourage neighborhoods to help identify future uses for vacant lots as the city is doing now, it should be required.

As previously profiled on UrbanCincy, Cincinnati’s population decline is systemic and although vacant building demolition is more a testament to the large supply of housing versus demand, absent a strategic demolitions plan, the city should be mindful that stabilizing neighborhoods relies heavily on preserving existing housing or building new housing capacity and offering incentives or neighborhood upgrades that would attract new residents.