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Over BUILT - Northeast Ohio is maxed out and teetering

Marc Lefkowitz  |  05/06/16 @ 9:00am  |  Posted in NEO Sustainable Communities

This week, we take a second look at the Center for Neighborhood Technology’s 2011 “Broadening Urban Investment to Leverage Transit (BUILT) in Ohio” report. In it, CNT explains how Greater Cleveland over build its infrastructure, which led to across-the-board vulnerabilities during the Recession.

CNT’s plan, which still holds, is to kick start the moribund real estate market by turning from expansion to fixed assets like the regional transit system.

The BUILT report come with a raft of policies that would increase density around Greater Cleveland's transit lines. CNT is perhaps most well known for its Housing + Transportation (H+T) Index, an affordability map of 337 metropolitan areas—from its home base, Chicago, with a very large transit system to Fort Wayne, Indiana with a bare bones system. The report includes a back-of-the-envelope analysis of the locations in Cleveland where transit frequency and market values could support transit-oriented development (TOD).

Maxed out<br />In many outlying areas in Greater Cleveland, three in ten properties have either a second mortgage or home equity loan. Should some of these homeowners fall behind on payments because of job loss or higher fuel costs, another round of home foreclosures could unfold.Blind faith<br />Sprawl without growth has left Greater Cleveland with a legacy of vacant units, mounting transportation costs, government debt, and tens of thousands of excess properties. Perversely, these development trends hurt municipal revenues and cripple local capacity to regulate land use development and transportation
investments. Nevertheless, the Ohio Department of Development and NOACA project these trends to continue through 2030.Road to ruin<br />Only four out of ten Greater Cleveland households live in neighborhoods where the combined cost of housing and transportation is at or below the H+T affordability benchmark of 45 percent of Area Median Income.

CNT was tapped in 2010 by then-Ohio Governor Ted Strickland to forecast the demand for transit-oriented development in Cleveland. The report reads like a cautionary tale, one that was essentially ignored by state and local leaders. (To its credit, Cleveland this year started to address its TOD opportunities by turning its attention to a form-based code. NOACA is leading a TOD study to identify the best sites for development.)

First, the report looks at why Greater Cleveland suffered so badly during the housing crisis. The answer has roots deeper than the sub-prime lending fiasco.

CNT warned the region that it overshot its new housing supply—adding 1.5 units per household—during the Recession while population declined in Cleveland and Cuyahoga County.

Supply outpaced demand, and distance between bedroom community and job centers grew. CNT predicted an affordability crisis for many people moving into far flung areas in the five-county region. Many living in the far reaches of Northeast Ohio are a job loss or gas price spike away from financial ruin, CNT notes.

The problem can be traced to a policy blindspot that goes like this: 1 in 7 households in Northeast Ohio are paying a mortgage that is 28% of their income. On its face, that is manageable for most, and it is why housing here is considered affordable. Caveat emptor: the cost of transportation is the second highest household expense. Northeast Ohio needs to be mindful of H+T when making regional investment decisions if affordability is a goal. Because, when transportation is added to housing, only 4 in 10 households in the region live in areas that are affordable.

“These residents typically own more cars and drive them further to commute to work, access commercial centers or run simple errands to the cleaners or grocery store—dedicating as much as 30 percent or more of their income to transportation.”

What does policy have to do with it? From 1982 to 1997, Northeast Ohio invested heavily in roads and highways that opened up more urbanized land—a 32% increase between Cleveland and Akron. Meanwhile, density slipped by 24%.

“Infrastructure investments have exposed households in Greater Cleveland to escalating transportation costs and little transportation choice,” CNT notes.

In retrospect, the report offers insight on why Ohio went in the opposite direction, inducing more sprawl, after it was made clear that a demographic trend of less driving, smaller households and a preference for transit among Millennials should have sent Northeast Ohio moving toward a strategy of building around existing infrastructure like transit.

They point to the State of Ohio and its Department of Development which produces a population trend forecast used by MPOs in staging their long range plans. ODOD predicted more outward migration. MPOs like this region’s (NOACA) are required to use those forecasts to plan more infrastructure investment into those areas of "growth" which has trended away from existing communities.

Clearly, that “forecast” includes a greater burden on the region. It turns out “sprawl without growth” is as costly as it sounds. It lead to many homes being over leveraged—with 1 in 5 households in the exurbs holding a second mortgage or home equity loan.

Northeast Ohio can make the case this next time around as NOACA prepares its long range plan that the ODOD “forecast” needs to be adjusted for the reality of climate change, demographic shifts, competitive economic factors like housing + transportation. Planning with this data can lead to something other than a business as usual trend.

“Outmigration is not inevitable,” CNT wrote. “It is a historical trend, not a destiny. An inventive and adaptive smart growth scenario can avoid these outcomes and create a new paradigm of growth in the 21st Century.”

And yet long range transportation plans are still required to blindly follow the ODOD population trends. Advocates for NOACA’s 2014 strategic goal of “building a more sustainable, multi modal transportation system” will need their leaders to make a case why the region collectively is served by taking aim at the looming housing + transportation affordability crisis in Northeast Ohio. In essence, by focusing incentives on land surrounding transit, CNT offers a way to bring affordability back into a safe zone for more families.

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