Ratios of Housing to Jobs in parts of Ohio are as bad as the San Francisco Bay Area

Columbus homeowners have been celebrating news that their home values have skyrocketed in that last few years. The Columbus Dispatch in particular has been praising the local market, saying that homeowners are “sitting on a gold mine” as home values reach record highs. While praising current homeowners, the Dispatch had no problem blaming new home buyers for pushing up prices in affordable neighborhoods.

Honestly, I’m not interested in blaming anyone for the lack of affordability. It’s more important that we recognize that these soaring prices and lack of affordability are the first signs that we’re in a housing crisis. If we don’t address it, it will get worse. Lower-income folks are already feeling the impacts, and if we stay on our current trajectory, even more people are going to get left behind. The region will suffer for it. Before diving into the data, let’s take step back to examine why affordability is important and then take a look at just how bad it is here in parts of Ohio, particularly Central Ohio.

Where People Live Matters

Neighborhoods matter. There’s a reason wealthy people are willing to spend hundreds of thousands (or in some cases, millions) of dollars to live in a specific place. They want a certain neighborhood character, access to amenities, or good schools, and they’re willing to pay. The downside of this system is that the only people who actually have a choice are those with means. This has worrisome implications.

For one, it leads to school segregation. You may think that Ohio, being a northern state and home to many heroes who fought against slavery in the Civil War, would be a place of relative equality. Unfortunately, that’s not the case. In fact, by some measures, Ohio has more segregated school districts than any other state. White flight and exclusionary zoning have lead to de facto school segregation.

Schools that have little class and racial diversity tend to have worse outcomes and they exacerbate some of the education funding problems we see at the state level. (I recommend you read Mike Petrilli’s book, The Diverse Schools Dilema, on the subject). Diverse schools are better schools, but we live in a system that incentivizes anyone with means to get to the best district they can and then try to pull up the drawbridge behind them. High real estate costs are probably the biggest barrier that keeps low income folks from getting into “good” suburban schools.

Secondly, the sprawl we see in Ohio has disastrous effects on the environment. Ohio is the 7th most populous state, but ranks 14th in urban transit ridership. We don’t ride the bus or take the train as much as we could (which is why I think we should have a statewide rail network). Instead, we drive, and in so doing, we waste more energy and put more green house gases into the atmosphere. Moreover, as we build outward, we drain land and build homes in areas that used to be rural or wild areas. California is already starting to see major problems as a result of building suburban communities near wild land. I would argue that in Ohio, sprawl is making our runoff problems worse (algae blooms in Lake Erie) and puts us at risk of wild fire and flooding. I did a tweet-thread on this a while back (maybe I’ll get around to turning it into a blog post at some point):

Ohio, we have to talk about our sprawl problem. Let’s dig in (and talk about some solutions too!) https://t.co/KhGR9diCsm 1/x pic.twitter.com/UWkWdu1oq3 — Kevin Verhoff (@kevinverhoff) May 21, 2019

Lastly, and probably most importantly, where you lives affects your income mobility. For better or worse, our society is still built on personal connections: jobs go to people in networks, internships go to family friends, and when times are tough our neighbors provide a safety net. Having a mix of incomes in neighborhoods allows poor kids to access networks they otherwise would be shut out from. Lower income students do better in diverse schools, and contrary to popular belief, upper income kids do about the same as they would do in their fancier schools (read about it the benefits of diverse schools here).

Moreover, there’s good evidence (here and here) suggesting that commute time is a major factor in escaping poverty and a key lever in improving income mobility. It’s pretty clear that forcing people to the edges of the metro area and making them commute into jobs centers can have disastrous effects on income mobility.

Having diverse communities near jobs is good for everyone. It improves education outcomes, promotes more efficient and greener living, and it can help to reduce poverty and increase upward mobility. To me, the really big question is: why isn’t Ohio creating communities that can help bring about these outcomes?

The Situation in Ohio

In communities where there are lots of jobs, there should be a lot of housing. Having a lot of housing in mixed-use zones allows for shorter commutes and can create more diverse communities. Communities with lots of jobs but little housing face affordability problems and sprawl outward as prospective buyers or renters drive ’til they can afford the mortgage or rent or just leave the city for areas with “better schools”. Places with lots of homes but few jobs are either depressed or are bearing the housing burden for jobs centers; they might also be known as bedroom communities.

To quantify the the housing-jobs ratio in Ohio, I dug up jobs numbers across the state along with the numbers of occupied housing units, both of which available from census data and the Bureau of Labor Statistics. Using county-level data, I divided the number of housing units by the number of jobs to calculate the housing-to-jobs ratio. The resulting ratio allows for comparisons of the overall housing mismatch across geographies. When Curbed did a similar thing for the San Francisco Bay Area, they found that the areas with the worst overall housing mismatch had ratios in the 0.58 to 0.82 range, that is, those cities had 0.58 to 0.82 housing units for every job.

These ‘worst offenders’ in the Bay Area are places where there are lots of jobs but not a lot of housing: Santa Clara County (home to Intel and Oracle and more), San Mateo County (home to Electronic Arts, Google, and Facebook and more), and San Francisco County (home to Twitter and Wells Fargo and many many others). These three counties had housing to jobs ratios of 0.69, 0.70, and 0.71 respectively. These are places have insanely high housing prices and where folks have little choice but to commute for hours and hours or pay excessive amounts for housing. They are completely unaffordable except for the massively rich. It’s famously difficult to find an affordable place to live in these areas. Having lived in the Bay Area, even before the housing crisis really started to hit, I can confirm that it’s absolutely wild.

Surely Ohio is nothing like the Bay Area, right? Wrong.

If we compare Ohio Counties to the San Francisco Bay Area, we find that Franklin County, home to Columbus, would be on the lower end, at 0.73. Hamilton County, where Cincinnati is the largest city, has a mismatch of 0.74, also low even by Bay Area Standards. The greatest mismatch in Ohio is in Union County, just to the northwest of Columbus and home to Marysville, at 0.63. Both Franklin and Hamilton counties have scores that would be considered bad even in the San Francisco Bay Area. Here’s where every county in Ohio landed:

Perhaps unsurprisingly, the areas around Cleveland, Columbus, and Cincinnati have higher mismatches, with Cuyahoga being the least worst offender (way to go Cleveland!). There are some surprises though, including Holmes, Shelby, and Hancock Counties. These are really small counties that are pretty much outside the orbit of Ohio’s largest metropolitan areas. While it might be worrying for folks who want to ensure these smaller counties are affordable, the scale of the problem in Ohio’s major cities is orders of magnitude greater than in less populous parts of the state. The chart below starts to make the picture even more clear. It shows the jobs-housing mismatch in absolute terms, by subtracting the number of occupied housing units from the number of jobs:

In Franklin County, there are 201,347 more jobs than occupied housing units. Of the 21 counties with a positive jobs-housing mismatch, the three largest counties in Ohio account for 78.6% of the overall missing houses, and Franklin County accounts for 36.1%, almost as much as Hamilton and Cuyahoga counties combined. In all, the three-C counties account for 438,287 more jobs than occupied housing units.

On the other end of the spectrum is Lorain County, with 33,385 more housing units than jobs. Lorain County, where I grew up, is probably bearing some of Cuyahoga county’s housing burden while simultaneously facing a depressed jobs situation as factories close (like the auto assembly plant my dad used to work at).

However you spin it, Ohio’s cities don’t have enough housing and are either outsourcing their housing to neighboring counties or putting low-income residents in a bind. Franklin County is the worst, with a worringly low housing to jobs ratio and responsibility for over 1/3 of the state’s housing mismatch, so that’s where I’m going to focus the rest of my commentary.

A Looming Crisis in Ohio

Having a lot of jobs is in indicator of a region’s success, and of course, in any prosperous area, home prices are going to go up. In the aggregate, Ohio is doing pretty well. Particularly in Central Ohio, median household income is pretty high while unemployment levels are low. On the surface things look pretty good: there appear to be a lot of job opportunities and more people want to live in our cities, again particularly in Columbus, but there’s are a couple of problems.

Firstly, the we aren’t building housing fast enough, and I think it’s fair to argue that the types of housing that’s being built isn’t very sustainable. Central Ohio developers are mostly building ‘luxury’ apartments with cheap building materials and designed for the young and affluent. We’re not building affordable housing that’s built to last for families. That’s why home prices are surging – more people are demanding a limited supply of stable, quality housing (see the housing-jobs ratios above), so the costs of living are going to go up. But here’s the real catch: the homes themselves are not actually increasing in value, but rather the value of the land under the homes is. It’s not the buyers fault; sellers are sitting on valuable land and are either unable to build on or are just happy to watch their property values soar.

Secondly, the jobs aren’t necessarily that great. Low wage, service sector jobs are driving most of the jobs growth around the state. Many workers are finding part-time work or in many cases multiple part-time jobs. It’s becoming increasingly difficult to earn a wage that allows for a traditional middle-class life. As manufacturing jobs have left, there just aren’t good options for for anyone except white-collar workers. Worse, as automation continues to grow, even traditional white-collar workers are starting to feel the crunch (check out the Second Machine Age on how automation will take over pretty much all the jobs).

So, we have a region that’s growing and adding jobs, but the jobs don’t pay very well, and we don’t have enough affordable housing. It’s not hard to see that we’re building a bifurcated society with two classes of people.

The lucky ones are okay. They might have inherited some wealth, have someone to help support them, bought a home before the big boom, or have landed a good-paying job. (Full disclosure: my parents helped pay for me to move and for rental deposits when I first graduated college. They also co-signed a car loan for me so that I could afford a reliable car. My spouse and I both have fulfilling, well-paying jobs. I am eternally thankful for it. I understand that not everyone is so lucky). These lucky folks can afford rent in some of Columbus’s ‘nicer’ neighborhoods or in an upscale suburb if they decide they want to move out of the city. Their kids can go to well-funded schools with low teacher turnover rates. They don’t have to worry about crime or about being harassed by police. Healthcare is a concern, but it’s not a question of if they will get care, it’s a question of where and how they will get it. They have no problems getting around the city and region because they own a car. If their car breaks down, they can afford to repair it and get a rental while it’s in the shop. Columbus (and Ohio more generally) is built for them, and they have options.

Those stuck in the lower class find housing where they can. They might share an apartment or couchsurf. Their kids go to schools that are failing and at risk of a state takeover. They have to worry about high infant and maternal mortality rates because they have limited access to healthcare. Many get around the housing affordability problem by sprawling outward – Columbus had a 44% increase in super-commuters between 2005 and 2016 (see the raw data here), but if their car breaks down, they’re stuck. They have few options.

And while my focus is on Central Ohio, this story rings true across the state and indeed across much of the US. This inequality will continue to grow if we don’t address it. Central Ohio and all of Ohio’s cities will become completely unaffordable for all but the wealthiest. Those who can afford to leave will do so, but many will be stuck with nowhere to go. Some will be forced to live in their cars as housing costs continue to increase (or we’ll start to see landlords offering luxury bunk beds, which isn’t necessarily terrible if that’s what people want, but if it’s your only option, it kind of sucks). Others will (already are) string together shifts at multiple part-time jobs to make ends meet. They will (already are) constantly worry about how to pay for things and will be (already are) one paycheck away from calamity. For too many, there will be (already is) no light at the end of the tunnel – no way to break the cycle of poverty. We will create (already have?) a permanent underclass.

We don’t have to create an Ohio that is unaffordable for all but the wealthiest. Many parts of the state are booming, and we should take advantage of the boom to ensure that we create a more just and equitable society. We should build more affordable housing, and we make it cheap and easy for folks to move around their community and the state more generally. We should ensure that all parents can send their students to quality schools and that everyone has access to quality healthcare.

We may differ about how to achieve these ends, but at the end of the day, we should all be able agree on the overall objectives. First, let’s recognize that we have a problem, and then let’s start talking about and implementing the solutions.

I’m interested in hearing what you think – what are the causes and what are the solutions? What trends did I miss? The easiest way to let me know is by hitting me up on twitter. And if you’re interested in the data or the code for the visualizations I used in this post, check it out on git (also, feel free to give me feedback on my code – this blog is meant for me to practice some viz skills after all).

Also, I’ve lightly edited this piece to improve some of the wording.