Nationwide Housing Shortage Most Dire For Those at the Bottom

For those at the lowest rungs of America’s economic classes, the affordable housing crisis is bad and getting worse. According to a 2011-2013 study released in 2015 from the Urban Institute, not a single county in the United States has an adequate supply of affordable housing for those in extreme poverty. Families classified as extremely low-income (ELI), or those making less than 30 percent of an area’s median household income, have far less options today than in 2000. On average nationally, only 28 affordable units are available for every 100 ELI renter households. That represents a 25% decrease in the years since 2000, when there were 37 affordable units for every 100 ELI households.

In Hamilton County, there are 52,749 ELI households (making $20,600 or less), with only 17,972 affordable units. This amounts to around 34 affordable and adequate units for every 100 households. In 2000, there were 47 units for every 100 ELI renter households. As usual, most of Cincinnati’s peer cities are facing a similar situation for their region’s poorest residents. In Cuyahoga County (Cleveland), there exist only 31 affordable units out of 100 families today, compared with 44 in 2000. In Allegheny County (Pittsburgh), there are 35 units per 100 families today while there were 44 per 100 in 2000.

Since 2000, many rural and suburban counties have joined metropolitan counties in their extremely low numbers of available units per needy households. The change is visibly stark on the Infographic for the State of Ohio, As the Urban Institute notes, the most drastic changes have occurred in the Midwest, South, and West in states like Ohio, Kentucky, Alabama, and Nevada, where comparatively abundant ELI housing availability in 2000 has plummeted.

The last 16 years have also seen ELI families increasingly reliant upon federal assistance for housing. The Great Recession, rising prices in many metropolitan areas, stagnant wages, and lack of development mean that while only 57% of families relied on HUD in 2000, more than 80% do now.

Indeed, while the Urban Institute points out that federal assistance for housing has grown (albeit not enough), they also acknowledge that many in the US Congress frequently call for cuts to federal housing assistance provided through the Department of Housing and Urban Development (HUD). Without this federal assistance, an already-dire situation for ELI families becomes catastrophic. Accounting for a theoretical total cut in federal housing assistance, there would exist only 5 affordable units for every 100 ELI renter household. That amounts to a mere 609,802 units for 11,341,484 ELI households. In Hamilton County specifically, there would be only 10 units for every 100 households. Cuyahoga and Allegheny Counties fair even worse, with only 5 and 3 units per 100 ELI renter households, respectively.

While the nationwide housing crisis has been much-discussed, including on this site, the true scope of the problem is most visible at the bottom of the economic spectrum. The biggest loss in affordable housing for extremely low income families has occurred mostly in unassisted units, highlighting the need for more affordable developments nationwide. Without increased federal assistance, along with more and smarter development across the nation, many will be driven to homelessness and unsafe & overcrowded housing.

Roughly 39% of Hamilton County’s Workforce Commutes From Outside of County

Of the 490,222 workers in Hamilton County, 39% of them are commuters from outside the county. This is according to data released by the U.S. Census Bureau.

Compared to other similarly sized metropolitan areas, this is a larger than normal percentage. In Cuyahoga County, home of Cleveland, for example, only 28% of the almost 700,000 workers commute from outside the county; and in Allegheny County, PA – the center of the Pittsburgh metropolitan area – that number is 22% of more than 680,000 workers.

The difference, some say, may be attributable to the fact that the Cincinnati region’s job center sits directly on a state line, and borders three counties in Northern Kentucky.

However, in Jefferson County, KY, with a similar amount of workers in the county as Hamilton County, only 26% of employees commute from outside Jefferson County. This is in spite of the fact that Louisville sits directly on the Ohio River, like Cincinnati, with commuters crossing the state line from Indiana each day.

Perhaps further explaining the matter is the merging of Cincinnati and Dayton’s economic activities, which increasingly promote cross commuting between Cincinnati’s northern, and Dayton’s southern counties.

Such commuting patterns complicate transportation management for regional planners. Not only does it mean heavy rush hour commutes, but also more unpredictable reverse commutes.

While Hamilton County was a bit of an outlier, it was joined by Davidson County, TN (Nashville), and St. Louis County, MO (St. Louis) with similar complex commuting patterns.

Federal Reserve Finds Cincinnati Out-Performing Many Of Its Regional, National Peers

The Vice President and Senior Regional Officer of the Federal Reserve Bank of Cleveland‘s Cincinnati Branch, LaVaughn Henry, says that the Cincinnati Metropolitan Statistical Area continues to show positive signs in recovering from the Great Recession, and is moving toward a position of long-term growth.

At approximately 2% higher than its pre-recession level, Henry says that per capita GDP in the Cincinnati area is out-performing other nearby metropolitan areas, along with the rest of Ohio.

Likewise, the unemployment rate is lower in Cincinnati than other metropolitan areas nearby. It is currently 4.1%, the lowest level in a decade. However, employment is still nearly 2% below its pre-recession level in the Cincinnati region.

The construction industry has seen large employment gains in the area, driven by increased home sales but also by Cincinnati’s ongoing center city construction boom.

Henry reports that the region’s manufacturing is also growing healthily, surpassing the growth seen both nationally and state-wide. This growth, he says, reflects increased demand from the aviation and automobile sectors of the U.S. economy. These two sectors, however, only account for 4% and 10% of the metropolitan GDP, respectively.

Larger sectors like transportation and utilities, while still seeing growth, are increasing at a slower pace.

Here’s How Cincinnati Stacks Up When It Comes to Household Incomes

Recent data released by the Brookings Metropolitan Policy Program shows that Cincinnati’s middle class slightly worse off than its Midwestern peers, but is about on pace with the national average.

The study, which categorized individual metropolitan areas and gave regional averages, ranked each city’s population based on six household income categories: Bottom 20% ($21,433 and below); Second 20% ($21,433-$41,109); Middle 20% ($41,110-$65,952); Fourth 20% ($65,952-$106,100); Next 15% ($106,100-$200,000); and Top 5% (Above $200,000).

Cincinnati’s percentage of households making less than $21,433, 34.9% of the city’s population, is significantly higher than the Midwestern and national average 25.1% and 20%, respectively. It is also significantly higher than Pittsburgh (27.9%), but lower than Cleveland (43.2%).

The percentage of households in the middle class (I defined this as the Second 20% and Middle 20%), however, is mostly even. Pittsburgh’s middle class population stands at 41.1%, with Cincinnati at 40% and Cleveland at 39.2%. Cincinnati also stands in the middle when it comes to the upper class, with Pittsburgh again leading and Cleveland trailing.

When compared with the rest of Ohio’s cities with more than 100,000 people, Cincinnati is found to have the highest percentage of Top 5% households, while also having the third highest percentage of Bottom 20% households. This, researchers say, follows a national trend where large cities are over-represented in both categories.

A perhaps startling trend is just how poor so many people are across the Midwest and Ohio.

Of Ohio’s four cities with more than 100,000 people, three of them – Cleveland (#2), Toledo (#4) and Cincinnati (#5) – all rank near the top in terms of the highest percentage of their residents falling within the Bottom 20%. While Columbus comes in at #29, this may be due to the city’s large municipal boundaries that account for areas that would in no way be considered part of any of the other three cities.

While, on average, the study found that Midwestern cities tend to have more low income households, and significantly fewer upper class households than the rest of the nation, it also found that Western and Northeastern cities each have high populations of those making over $200,000, although the Northeast has the highest percentage of households making under $21,433.

Researchers did note, however, that these numbers change somewhat when adjusting for cost of housing across metro areas.

Alan Berube, author of the study and a senior fellow and deputy director at the Brookings Metropolitan Policy Program, also noted that despite media portrayals of some cities being entirely poor, and others being entirely wealthy, virtually all American cities still boast a large middle class.

Regional Economic Hopes and Concerns Shifting As Cities Recover From Great Recession

According to the Federal Reserve Bank of Cleveland’s annual survey of its district, jobs and the economy overall continue to remain the top concern for local leaders.

Each year, seeking to gauge ground-level concerns and needs, the Federal Reserve Bank of Cleveland – which includes all of Ohio, Eastern Kentucky, Western Pennsylvania, and the West Virginia Panhandle – conducts a survey of community leaders to assess local challenges around the Fourth District.

In their 2015 survey, jobs remained the number one concern and priority for local leaders throughout region. Skyrocketing to the second place position was a preoccupation with access to quality and affordable housing; while vacant and abandoned properties were third.

While public officials acknowledge that jobs are indeed being created, the concern is about the type of job creation that is occurring in their communities. Part-time jobs, low wages, lack of benefits, and high turnover mean that being able to support a family is out of reach for many of those working in these newly created positions.

There is also growing concern about continued vacancy in high-wage, high-skilled positions where a skills gap is keeping many of those looking for work from filling these positions.

New in this report is the growing concern over affordable housing. While low-wage and part-time jobs continues to grow, new housing options are limited and those that are being developed are often either at the high or low end of the market. Economists at the Federal Reserve Bank of Cleveland say this is the first time the issue has registered as a top concern.

Continued in-migration to central cities, like what is being experienced in Cincinnati, is exasperating this problem throughout the Fourth District. Of course, this in-migration is seen by many as a net positive, even though the housing market has yet to catch up.

“The remarkable resurgence happening in core neighborhoods will have a very positive effect on those neighborhoods, and on the City of Cincinnati overall,” explained a professor at the University of Cincinnati in response to this survey.

A social services organization CEO in Pittsburgh also sees increasing migration to urban centers positively, but worries about the possibility of rising property driving historic residents from their neighborhoods. The concern over affordable housing is, as the Cleveland Fed puts it, “respondents grappling with the good and bad elements of revitalization occurring in their urban centers.”

While less relevant in the Cincinnati region, the Fourth District’s shale gas boom has also caused affordable housing problems in parts of West Virginia and Western Pennsylvania, as oil workers move in and are able to pay more in rent than other, longer-term residents.

Although the economic recovery is in full swing and most cities are seeing migration to their urban centers, many neighborhoods are still suffering from blight and disinvestment. According to the survey, abandoned properties were the third most-cited concern among respondents. Many cities in the region, particularly those in northern Ohio, are still saddled with significant amounts of abandoned and vacant properties, many of which left over from the housing crisis.

These properties not only require tax revenue to maintain and produce no tax revenues in return, but they are also most typically found in low-income, minority neighborhoods, exasperating already-difficult economic conditions for many of these communities.

At the end of the survey, the Cleveland Fed attempted to gauge emerging issues, both positive and negative. The biggest negative issue cited by almost all respondents was how to deal with an aging infrastructure that needs to be replaced. Budget cuts at all levels of government have lead to increased deferral of basic maintenance and improvements, especially in older municipalities that dominate the Fourth District.

While on the positive side, most respondents cited the continued migration of residents to the inner-city as having the most potential to positively impact economic recovery throughout the region.

Respondents also specifically mentioned the activation of the National Housing Trust Fund, which will provide federal support to help areas construct, preserve, and rehabilitate buildings for affordable housing. The National Low Income Housing Coalition predicts that Ohio and Pennsylvania will be some of the largest recipients of these funds, and thus have the most to gain or lose by its status.