Housing is the crux of village affordability puzzle
- Published: April 12, 2018
EYE ON AFFORDABILITY
This is the fourth in a series of articles examining the cost of living in the village.
Articles in this series
Poets John and Maria Booth never thought they would be able to afford a home in Yellow Springs.
The Booths’ combined income as a public school teacher and a physical therapist assistant was too high to qualify for one of the local affordable housing programs available at the time, in 2004. But it was too low to purchase a market-rate home for their family.
An act of generosity and a unique arrangement made local home ownership possible. Suzanne Clauser was building a speculative house on Dayton Street, and offered it to the Booths at a discount with one caveat: they had to sell it back to her at cost if they moved within 10 years.
Thirteen years later, the Booths are grateful they took the leap. After mixed experiences with landlords in rentals through the years, without Clauser’s offer they might no longer live in Yellow Springs, a town that has cultivated creativity in their two children and has been a good fit for their mixed-race family.
“We probably would have moved out of town, or just outside of town, which is hard because the communities flanking us are a different vibe,” John Booth said.
Booth, who went on to serve on Village Council and the board of Home, Inc., said that not everyone has been as fortunate, and sees the impact of a housing affordability crisis in town.
“A lot of people whose families have traditionally lived here have been forced to move out,” he said.
Around the same time, in 2006, Alex and Minerva Bieri were looking to purchase a home for their growing family. They were renting a small house in town, and with a new baby were ready to buy. They found a larger home with a big, open yard, but it happened to be in Clifton.
“If Yellow Springs was more affordable we might not have cast as wide a net,” Alex Bieri said of their home search.
Ultimately, they chose to buy in Clifton for its historic nature, natural surroundings, “country vibe,” and more affordable home prices, Bieri said. The Bieris have since invested in several rental properties in Clifton and Alex Bieri went on to become its mayor, while they send their two children to Yellow Springs schools through open enrollment. Although affordability was a factor in their decision, more specifically it was the availability of options in Yellow Springs in their price range.
“We didn’t move out of Yellow Springs because we were literally evicted and couldn’t pay our bills,” Bieri said of their situation. “We were just ready to be homeowners.”
Clifton, 3.5 miles east of Yellow Springs, and the area surrounding it is home to some former villagers, Bieri said, though not all are “refugees of the affordability crisis” and some may just prefer country living. At the same time, Bieri has witnessed the impact of rising housing prices in his hometown.
“I grew up in a blue collar family … and it seemed like Yellow Springs was full of people like us — not extreme poverty or extravagant wealth,” Bieri said. “So now there is this feeling that we’re pulling away from that.”
Who can afford to live in Yellow Springs and how do they afford it? Is the village becoming less affordable and what can be done about it? As part of its ongoing series, “Eye on Affordability,” the News has been exploring these questions. And while every one of the 1,700 households in Yellow Springs likely has its own story, recent studies and anecdotal evidence point to a trend — the village is becoming a more expensive place to live. This week’s focus is on housing.
Housing costs, the largest single expenditure for most Americans according to the Bureau of Labor Statistics, are not only relatively high in Yellow Springs compared to surrounding areas, they are growing. And these costs affect both those looking to move to Yellow Springs and those who are already here.
According to Home, Inc. Executive Director Emily Seibel this week, the concerns around housing affordability that led to the formation of that nonprofit in 1998 are now reaching a crescendo.
“We are at a critical tipping point, and I think people are feeling it,” she said. “[Affordability] is such an important issue in our community, and everyone is connected to it in some way, or knows someone who is struggling.”
The high cost of housing
Looking at recent sales data, houses in Yellow Springs cost more than twice as much as those in the surrounding area, according to a housing report by Bowen National Research recently commissioned by Village Council. And, importantly, housing prices are rising faster than local incomes.
The median sale price in the village from January 2014 to October 2017, $186,250, was more than double the price of $82,900 in an area that includes Xenia, Springfield, Enon, Cedarville, Fairborn, part of Beavercreek and the townships around the village, according to the Bowen report. However, the median household income in Yellow Springs in 2017, $63,024, was only 30 percent more than households in the same area, $49,028.
In fact, though average home sales prices increased 81 percent between 2001 and 2017, median household incomes only rose 21 percent in about that same time frame.
One sign of the financial stress on local households is that some 465 local households paid more than 30 percent of their income toward housing costs, a condition that the U.S. Department of Housing and Urban Development considers “cost burdened,” according to data from the 2011–15 American Community Survey featured in the Bowen report.
The percentage of housing cost-burdened villagers — which includes 43 percent of all renters and 18 percent of all homeowners — is slightly lower than neighboring communities and regional and state averages. But, the Bowen report notes, “this still represents a notable number of households paying a high share of their income towards housing.” These figures do include property tax and utility payments, which are the next most significant part of housing costs after mortgage or rent, according to the Bureau of Labor Statistics, and have also been trending upwards in recent years. (A focus on local property taxes and utility costs will be the subject of future articles in this series.)
To Patrick Bowen of Bowen National Research, these results collectively show that housing affordability is a fast growing problem in the village.
“The housing situation is critical in Yellow Springs as housing costs continue to climb and housing choices, regardless of affordability level, are very limited,” Bowen wrote in a recent email. And it may be affecting low-income families the most, he continued.
“It appears families, particularly lower-income families, are feeling the impact of the limited supply of affordable housing alternatives in Yellow Springs,” Bowen wrote.
A national problem?
Last year home sale prices in Yellow Springs averaged $262,593, an increase of 35 percent in six years, according to figures from the Dayton Area Board of Realtors. However, nationally prices rose 48 percent in that same time period, according to a press release last month from the National Association of Realtors.
Local Realtor Rick Kristensen said this week that home price increases are not just a local trend. While some areas have yet to recover from the subprime mortgage crisis of 2006–07, other places are experiencing rising costs due to low housing inventory, he said.
“The Dayton market has low inventory, Cincinnati, Columbus, the nation,” Kristensen said. “So it has switched over to a seller’s market.”
The housing affordability challenge may not be unique to Yellow Springs, according to Village Council member Marianne MacQueen, who is leading a Housing Advisory Task Force for the Village. MacQueen said the problem is that, nationally, incomes have not kept up with rising housing costs.
“The cost of housing, like the cost of college, has risen faster than incomes,” she explained. “Wages have been flat while housing costs have increased.”
In fact, the National Association of Realtors press release noted that while home price increased 48 percent since 2011, incomes only grew 15 percent.
Bowen agrees the problem is a national one, pointing to the challenges that developers face in making projects geared towards lower-income households financially viable even when there is demand for them.
“We are seeing the limited availability of housing that is affordable to lower-income households impacting markets throughout the country,” Bowen wrote. “So, this isn’t a Yellow Springs only problem, it’s a national problem.”
Perennial demand, limited supply
Though rising housing costs may be a national problem, what is unique to the Yellow Springs housing market is its exceptionally limited supply of housing paired with a strong desire among many to live here, according to several villagers interviewed this week.
Local Realtor Teresa Dunphy boiled down the dynamics of supply and demand at work in pushing up local home prices.
“We have a desirable community — a nice school system, walkability, parks all around us — and we don’t have a lot of housing, and until we get some more, [high prices] will continue,” she said.
To Bowen, four factors are responsible for high prices: the “extremely limited inventory” of both rentals and homes, an increased interest in home buying due to growing incomes, the fact that the newest homes built in town have been higher-end properties, and the “continued appeal of Yellow Springs.”
The appeal of Yellow Springs seems to have also grown in the last few decades, MacQueen said, a period that corresponds to a dramatic increase of local housing prices, which previously tracked with home prices in the Dayton region until the 1990s. She attributes the shift to Yellow Springs’ prior reputation as a radical community fading as the college shrank, while features like the bike path brought more people to town to experience what the community had to offer.
“I think people started not liking living in the suburbs anymore,” MacQueen said. “We actually have a community here, and where else do you find a community? Maybe in an urban neighborhood, but not Beavercreek.”
Bieri said that Yellow Springs’ desirability has inflated local home prices more than homes are technically “worth,” i.e., the value of materials and labor to build the structure. It might be related to the “cookie cutter designs” of suburbia, declining downtowns elsewhere, and, in the village, low crimes rates and other attributes residents wouldn’t want to sacrifice, he said.
“Part of the desirability can be attributed to Yellow Springs preserving its public square, its downtown, and it’s also the fault of other areas letting theirs go,” Bieri said. “The desirability factor is something people don’t want to sacrifice.”
Supply getting tighter
On the supply side, Yellow Springs has added relatively few new houses in recent years. The problem is compounded by the fact that few people in town move annually, according to Bowen’s report. Just 12 percent of villagers move each year compared to 18 percent in the surrounding area, the report noted. That means the number of houses available on the market at any time is limited.
But while there are typically in the range of 25 to 35 homes on the market at any time, since the end of 2016 there have only been a handful at a time, according to Kristensen.
“Because there’s a lot of demand, the houses get picked up quickly and there are not enough sellers wanting to come on the market,” Kristensen explained.
As of April 3, there were only seven home listings on the Multiple Listing Service, including two newly constructed houses in the Birch III development. On the low end, there is a four-bedroom, one-and-a-half bath house on Shawnee Drive listed at $185,000 and a three-bedroom, two-bath new build on Stewart Drive listed at $295,000. The five other homes for sale are all listed in the $400,000s.
Houses are also selling faster, Kristensen said. The average number of days on the market a decade ago was about 160 days, compared to 125 days now, according to his figures.
Furthermore, recently built developments Birch III, Stancliff and Thistle Creek are filling up, leading to fewer options for those home buyers who want a new home, according to Kristensen. Four lots are left in the 40-lot Birch III neighborhood, Stancliff has one lot remaining and Thistle Creek has two, Kristensen said. Other lots scattered throughout town are selling at rates between $55,000 and $95,000, the highest lot prices he has seen as a local Realtor.
“We don’t have a lot of housing stock and we’re landlocked and we’re a vibrant community,” Kristensen summarized of the housing situation. He also cited his figures that sale prices per square foot in town have increased from $118 in 2004 to $130 today.
“Our square footage values put us on par with Oakwood, Springboro and Centerville, communities like that,” he said.
Between 2000 and 2010, only 129 housing units were added to the village, according to Census figures, which the Bowen report indicated has contributed to the town’s “very limited modern, high quality product.” One factor in Yellow Springs is the stated policy of Village Council to not extend its borders through annexation and the presence of preserved land in the greenbelt not available for housing development.
As a result of what the Bowen report referred to as “pent-up demand” for housing locally, some 190 houses for sale are needed in the community by 2021, in addition to 310 rental properties.
Rentals the most limited
When it comes to rentals, the situation may be even worse, several interviewees said this week. Although the Bowen report found that the cost of rentals in town was not significantly different from the surrounding area, the availability of rentals was severely lacking. Furthermore, the quality of the town’s rapidly aging rental properties and the fact that no new apartments have been built in 40 years meant accessible, modern rentals are hard to come by in Yellow Springs.
This week Teresa Dunphy, rental manager of Dunphy Real Estate, said there are no rental vacancies in any of their properties. She believes that the prices of local rentals are not a deterrent for those wishing to live here, citing a three-bedroom, one-and-a-half house she recently rented for $1,270 per month. However, the lack of rental development has contributed to their scarcity.
“I think a lot of it has to do with that in the past people have been against any development,” she said. “But when you have development, you get some saturation and prices don’t skyrocket.”
Seibel of Home, Inc. said that group has been well aware of the rental crisis in Yellow Springs.
“There isn’t enough [rental housing],” Seibel said. “It’s tough, especially for larger families, and for seniors there is very little that is accessible and affordable.”
Of the 1,700 occupied housing units in the village in 2017, 668, or 39 percent were occupied by renters, according to the Bowen report. That figure is on par with the surrounding area. In fact, rentals have grown in the last 10 years, from 598 in 2010, and are greater than the previous peak of 657 in 1980, Census figures show.
Still, rentals may not be growing fast enough while the existing supply ages, according to the Bowen report. In fact, 78 percent of all rentals were built prior to 1969, the report noted. The town’s local apartment complexes were built at least 40 years ago, the News has reported, including Orlando Brown’s 16-unit apartment at Lawson Place in 1963; the 50-unit Hawthorne Place on West North College Street in 1966; and the 1970s, the 24-unit Twin Coach Apartments on Union Street; and Greene Metropolitan Housing Authority units at Lawson Place and on Corry Street for low-income households.
MacQueen also noted that as a share of total housing, rentals have declined in recent decades. That’s because single family homes that were formerly rented were sold, while no new apartment complexes were constructed. “Yellow Springs has been discouraging of rentals,” she added.
Kristensen said that many of his clients can’t find a rental in Yellow Springs that meets their needs, whether it is the size, quality, condition or amenities it offers. That has affected new people wanting to try out the community before they buy a home here.
“If they are going to relocate to an area, they usually want to rent and wait to see the market,” Kristensen said.
As Bowen’s report noted, the largest number of renter households in the village, about 58 percent, make less than $35,000 per year — a group that is projected to increase. The affordability challenge may be especially concerning for that group, which includes seniors and the nearly one-fourth of all children in Yellow Springs who live in poverty, it added.
“It will be important that rental housing is developed that meets the affordability needs of of low-income seniors and families,” the report noted.
Impacts of high housing costs
For many villagers who already live here, rising home values may mean increased equity in their largest financial investment. But for those who wish to move here, it’s a major impediment.
Take Brenda Ronnebaum. An alumna of Antioch Midwest who student taught at Mills Lawn School, she has long wanted to live in Yellow Springs. But recently, she and her partner purchased a home in Beavercreek when they were unable to find a three-bedroom home in town for less than $200,000. Her two children, however, attend Yellow Springs High School through open enrollment.
“I paid attention to YS for the past few years and the home costs were just too high, and often [the homes] seemed to be in a condition which would require serious and immediate improvements,” Ronnebaum wrote in a message, adding, ‘We are very happy we can open enroll the girls.”
Housing affordability affects those already living here are well. Two-thirds of the more than 500 villagers who responded to a survey for the Bowen report indicated that it was a challenge for them to find suitable housing in town, with 90 percent citing affordability and housing costs and 73 percent low inventory.
Bowen wrote in an email that he believes current residents are having difficulty finding the housing they need when their life situations change, for example when children are born or move out, incomes increase or decrease, or seniors aging in place.
“A healthy market needs to have choices available so residents can move around as their household characteristics and needs change,” Bowen wrote. “Yellow Springs doesn’t offer such choices right now.”
To Seibel, the village is losing income diversity due to high housing costs, which in turn affects the character of the village.
“One of the things that made the village a community and not a suburb is that the owner of the company and the employees could all live here together,” Seibel said. Instead, today the situation is that much of the local workforce commutes to work, Seibel added.
Housing costs have caused a “middle income hole” of young adults and young families in Yellow Springs, MacQueen noted, which has a significant impact on the viability of the school system.
That income sector typically is comprised of working people who add to the income tax base and might start their own businesses, MacQueen added.
“We have upper middle class, and we have low income people but we are missing lower middle income and middle income,” she said.
A demographic shift linked to local housing affordability may have been predicted in a 1972 report on local housing needs prepared by the League of Women Voters and the Community Planning Committee.
“If that World out there does not decrease its demand for housing in Yellow Springs and we do not attempt to meet some of the demands, we will become more and more of an upper middle class community,” the report noted.
“We must recognize that if we make a decision not to grow, we are also making a decision to eliminate low- and moderate-income families from our community.”
The next article in the series will feature local efforts through the years to increase housing affordability.