By Sheldon Johnson, Urban Revitalization Project Specialist
According to a recent study released by the Harvard Joint Center for Housing Studies, there has been an unprecedented surge in rental housing in the US. In 2005 there were approximately 34 million families and individuals living in rental housing; by mid-2015 there were approximately 43 million. The increase of nearly 9 million rental households from 2005 to 2015 is the largest gain of any 10-year period on record.
This historic increase of rental households nation-wide has been coupled with rising rent as the share of households who experienced a rise in rent grew from 31% to 37%, which is the highest level since the mid-1960s. Of the 43 million families and individuals who rent, 1 in 5 are considered to be cost-burdened, meaning they pay between 31 and 50% of their income on rent. Additionally the number of severely cost-burdened renters, who pay more than 50% of their income on rent, increased from 7.5 million to 11.4 million from 2005 to 2015.
Ohio cities have not been immune to this nationwide trend. According to CBRE, a Cincinnati based commercial real estate firm, rent adjusted for inflation rose 7% in Greater Cincinnati from 2009 to 2015. The National Low Income Housing Coalition (NLIHC) estimated that nearly 34% of the population in Greater Cincinnati are renters. While renters of all kinds are affected by increasing rent, low-income renters are most adversely affected.
The Harvard Joint Center for Housing Studies reported that 44% of Cincinnati renters are cost-burdened and 24% are severely cost-burdened. An NLIHC study found that an individual working at the state’s minimum wage of $8.10 an hour would need to work 44 hours a week to afford a modest studio apartment at fair market rent in Cincinnati. They would need to work 55 hours for a one bedroom apartment, 73 for a two bedroom, and 101 for a three bedroom.
Low-income renters in other areas of Ohio also face difficulties paying for rent. The Urban Institute reports that Franklin County has 24 affordable housing units for every 100 extremely low-income (ELI) households— defined as a family of four making less than $20,000 a year. Columbus has more than 59,000 extremely low-income families, but only 14,000 available units they can afford.
It is clear that housing affordability is an issue that will be critical to the redevelopment of Ohio cities. Greater Ohio Policy Center is engaged in emerging conversations in local communities and statewide regarding potential solutions.