New study to look at regional housing issues
SANDUSKY - You may have seen flyers around town or social media posts from local community partners talking about a regional housing study. What is it and why is it important?
Firelands Forward, in partnership with many community partners, has commissioned a regional housing study in order to better understand the housing landscape in the Firelands. The affordable housing inventory in the Firelands Region has become a critical problem for the health of the workforce, both from a talent attraction lens and from a sustainability perspective.
Median home prices have risen year over year in Huron and Ottawa Counties by approximately 35% and by over 60% in Erie County. The median price in Erie County in 2022, is $293,500 according to Redfin’s MLS and public record calculations (Redfin, 2022). This is simply unaffordable for median income wage earners ($33,600) in the county. There are many reasons for the atypical price inflation in the region’s housing market, including national housing inflation due to a shrinking inventory, outside investment in short term rentals within the Firelands Region, and an aging housing inventory that needs investment. However, in order to attract developers and inform legislative reform, we need to understand the housing landscape from a data viewpoint.
Long-term rental rates correlate with rising purchase prices. In 2021, the Fair Market Rental rates increased by an average of 8.6% in the Firelands Region (rentdata.org, 2021). In addition, only 38.7% of Emergency Housing Vouchers have been utilized in Ohio (U.S. Department of Housing and Urban Development, 2022). This low utilization rate is almost entirely caused by a lack of inventory. This means that the 8.6% increase in rental rates is being passed on to the consumer for 61.3% of the eligible population for HUD Vouchers (our communities’ lowest wage earners). In addition, because rental rates are increasing faster than wages, individuals who do utilize subsidies find it harder to overcome the need to rely on these benefits and become subsidy independent. This affects the labor force in several ways.
There is a substantial benefits cliff in relation to housing subsidies. This means that a better paying job could result in a substantial net loss of income. Unfortunately, Ohio does not have a step-down system for most subsidies, meaning an individual could go from paying a $100 monthly rent copay to paying $1,000 per month if they earn a raise as low as $1 an hour. In most instances, Ohioans must earn less than 50% of the regional median income in order to qualify for subsidized housing. In the Firelands Region, this equates to $15,645 per earner or $29,204 per household (Economic Modeling Software International, 2022). Availability in housing across markets is also a factor in talent attraction, a critical component to growing our labor force.
This is an incredibly complex challenge. Outside investors have driven up housing prices in the Firelands by buying up available real estate and converting inventory to short-term rentals. Real estate investors have largely been hesitant to make large-scale investments because of the soaring cost of goods. A comprehensive regional strategy will be necessary to attract investment in a way that will benefit the labor force while ensuring programming and legislation reflects the approach to increasing the inventory of affordable housing.
Because of the complexity of the housing landscape, a good start to solution development is an in-depth analysis of current regional conditions, involving direct resident feedback.
Firelands residents are encouraged to take the survey at surveymonkey.com/r/FirelandsResident.
This article originally appeared on Fremont News-Messenger: Firelands Forward, partners commission housing study
