Author: Jacob D. Fessler

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Business News

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

Homes in Clifton Heights [Travis Estell]

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.

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Business News

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.

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News Transportation

All Aboard Ohio Celebrates Recent Successes, Future Plans at Recent Meeting

Bicyclists ride along recently completed streetcar tracks on 12th Street [Travis Estell]

Last Tuesday, All Aboard Ohio held their Spring meeting at the newly-opened Taft Ale House in Over-the-Rhine.

President of the Southwest chapter, Derek Bauman, ran the meeting, which not only included discussion of advocacy for interstate passenger rail in Cincinnati, but also of the ongoing construction of the Cincinnati Streetcar.

Several community leaders and representatives were present, including Streetcar Project Manager John Deatrick, Metro’s Rail Operations Manager Paul Grether from Metro, the chief of staff for Councilman Kevin Flynn, a representative from the Cincinnati Preservation Society, the president of Queen City Bike, and even Cincinnati Union Terminal’s Amtrak station manager.

To begin the meeting, Deatrick and Grether talked about the construction of the streetcar system, which can be seen directly outside of Taft’s Ale House, and the future operation of it. Deatrick informed the crowd that almost 70% of the construction is complete, which is ahead of schedule, and the city expects the first streetcar delivery by September.

When asked to address the ongoing discussion about the next phase to Uptown, Deatrick declined to comment.

Grether then explained how his organization acts as the conduit for federal funds to the streetcar and will be the future operator of the system. He also discussed Metro’s plans to schedule the streetcar in a manner that complements and fully integrates with Metro’s bus operations, and those of TANK.

Another key point that Grether mentioned is that the technology is in place to be able to give streetcars signal priority, should leaders at City Hall decide that is desirable. Such a move would quite significantly improve travel times and performance.

As the conversation moved on, Bauman spoke about the group’s efforts to establish daily passenger rail service between Cincinnati and Chicago. Not having daily rail service to Chicago damages business competitiveness for the city, Baumann said, considering that Milwaukee, St. Louis, Detroit and Indianapolis already currently boast such service.

The effort has received renewed interest as of late due to the debate surrounding the future of the Hoosier State line, which connects Chicago to Indianapolis. Project proponents scored a big win recently when funding was picked up by the State of Indiana to continue its service. Those efforts even attracted the attention of Senator Joe Donnelly (D-IN) in a letter he penned to the Federal Railroad Administration about the possibility of future extensions of the line.

Since assuming the presidency of the local chapter, Bauman has made a variety of changes to allow for greater participation and engagement. Meetings are no longer confined to members, for example, and they have begun reaching out to the business community and area universities.

Bauman said that he hopes this approach will help make daily passenger rail service a reality for the Cincinnati region at some point in the near future.

Those that are interested in supporting the efforts of All Aboard Ohio can do so by making a tax-deductible donation to the organization on Tuesday, May 12. On this day the Columbus Foundation will make matching donations to a collection of non-profits throughout the state, including All Aboard Ohio. You can make secure donations to the group on their website.

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Business News

Federal Reserve Has Rosy Outlook for Cincinnati’s Over-Performing Economy

A spring 2015 update on the economic health of the Cincinnati region from the Federal Reserve Bank of Cleveland gives reason for optimism when it comes to the area’s recovery.

The Cincinnati metropolitan area is recovering at a rate equal to that of the nation, and production, income, and GDP are all up in the area. LaVaughn Henry, vice president and senior regional officer of the Federal Reserve Bank of Cleveland’s Cincinnati Branch, cited the area’s diversified economy as one reason for robust growth.

More specifically, the Fed pointed to Cincinnati’s large employment percentages in the consumer marketing field as a reason for its success. As the nation continues to recover and consumer confidence and consumption rise, Cincinnati is poised to benefit at a greater rate than other metropolitan areas.

Further bolstering the region’s growth are the construction and manufacturing sectors, having grown 7% and 4% over the last year, respectively. Healthcare and education are also growing, while the area’s business and professional sectors are lagging behind national averages.

Overall Cincinnati’s performance seems to be mirroring that of the nation, with high growth in manufacturing and construction, stagnant growth in government, and large drops in the information sector.

The region’s employment rate now stands at 4.5%, nearly a point lower than the national average and the lowest level in 10 years. The average Cincinnatian is seeing the fruits of this economic growth, with wages growing faster than the rest of Ohio and other nearby metros. Henry says that wages are poised to reach an average of $840 a week – a level not seen since 2007.

The region, however, has not yet managed to reach pre-Recession employment levels. This is in line with the national trend, although behind local metropolitan areas.

The Federal Reserve Bank of Cleveland also cited recent announcements from companies planning major job expansions as reason for continued optimism that the area’s employment growth will continue. While the local housing market has seen sluggish growth, the Henry says that shrinking housing supply and increased construction will strengthen the sector.

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Business News

Cincinnati Fares Poorly When Examining Centralization of Jobs Throughout Region

A December 2014 Salon article, using statistics from an April, 2013 Brookings Institute report shed light on an increasingly-present paradox in the American economy – America’s next generation of workers prefers urban living, but jobs tend to be decentralized and located far from most region’s urban center.

The report found that from 2000 to 2007 the share of jobs located within two miles of a major urban area’s central business district declined 2%; and that by 2010, a nationwide average of 43% of jobs were located at least 10 miles from the CBD. Only 24% of jobs, meanwhile, were located within two miles of most regions’ primary downtown.

The pattern is more acute in Cincinnati than in most other metropolitan areas, where a robust urban turnaround has been taking place. Compared to the national average of 22.9%, only 17.7% of the region’s jobs were located within three miles of the CBD, which in Cincinnati’s case would also include Uptown. Furthermore, 52.8% of the region’s jobs, approximately 452,000, lie between 10 and 35 miles from downtown.

In the first decade of the new century, which was defined nationally by the huge job losses of the Great Recession, the Cincinnati region lost a total of 76,845 jobs. Of those, 67,122 were within 10 miles of the CBD. While total jobs declined 8.2%, the jobs within 10 to 35 miles of downtown Cincinnati increased 3.3%, with both other areas experiencing declines.

While these recent gains tend to buck the national trend, the Cincinnati region’s employment remains more sprawled than the average American metropolitan area. But while the region has fewer jobs than average within 10 miles its CBD, the Cincinnati region has more jobs within 10 to 35 miles than all but three Midwestern regions (Detroit – 77.4%, Chicago – 67.4%, St. Louis – 62.1%). Columbus and Cleveland come in at 35.4% and 46.5%, respectively.

What this seems to indicate is that Cincinnati has a lower reliance on jobs from manufacturing and agricultural industries than most of its Midwestern peers.

The Brookings Institute went on to find that the Great Recession stalled this trend across the board, as hard-hit industries like manufacturing and retail tend to be the most decentralized. Yet, from 2000 to 2010, 91 of the largest metropolitan areas in the nation saw the number of jobs within three miles of their CBD decline.

Washington, DC, which serves as a national economic outlier for its massive job and wage growth, was the only metropolitan area that saw downtown jobs rise as both a percentage and gross number.

Researchers say that the land-use and zoning policies of each metropolitan area affect the geographical characteristics of jobs within that area. While metropolitan areas with over 500,000 jobs tend to be more decentralized, large metropolitan regions like Chicago, Atlanta or Detroit include large secondary clusters of employment outside of their traditional downtown.

While talented young workers increasingly show their preference for walkable urban communities, jobs continue to decentralize throughout the United States. This distribution creates problems for the region in terms of building and maintaining infrastructure. It also does not bode well for more sprawled regions, like Cincinnati, in terms of being able to attract a new workforce to take the place of aging Baby Boomers.