YOUNGSTOWN, Ohio – With recommendations identified to address the housing challenges in Mahoning and Trumbull counties, the next step is recruiting the right people to implement them.
“We want to develop our housing consortium,” says Jim Kinnick, executive director of Eastgate Regional Council of Governments, of the first step.
Affordable housing and economic development share a strong relationship, he says.
The consortium is one of the recommendations in a housing strategy study contracted by Eastgate and released last month in cooperation with the Youngstown/Warren Regional Chamber. It was completed by the Greater Ohio Policy Center and the Reinvestment Fund.
A housing consortium can help all of the organizations involved in housing to maximize their time and resources by identifying common goals and coordinating to accomplish them, the study states. The Valley’s housing crisis is multifaceted and can’t be solved by one entity acting alone, it adds.
“Affordability, lack of new construction, high numbers of poor-quality units, acute needs of vulnerable populations, and outdated regulatory measures all impact the housing market in the Valley,” the study says. Solutions will produce better outcomes when tackled in a coordinated effort.
Kinnick calls the strategy a framework, or playbook, that will be followed over this year and beyond.
Justin Mondok, Eastgate planning and development director, says the organization hasn’t been rushing the process because it wanted to give companies, agencies and individuals time to digest the housing strategy.
Since the strategy was unveiled, several organizations have reached out to Eastgate, wanting to get involved, Kinnick says.
“We’re looking at growing that group and making sure we have the right people in the room,” he adds.
A Builder’s View
Joe Koch Jr., vice president of Joe Koch Construction, a home builder and developer in Austintown, hopes to be one of those people. He attended the meeting where officials unveiled the housing strategy.
“I thought it was a very ambitious starting point in order to go in the right direction for our area. Because I do believe housing is the golden goose, as far as trying to help an economy, especially locally and regionally,” Koch says.
The next step is getting the right people involved and that should include local builders and developers, he says. When local developers and builders get involved, he believes the strategy will progress. There’s a perception that developers make money hand over fist on the sale of lots and land development, but it’s not true, Koch explains.
“The cost of developing, especially within the past decade or two, has gone up astronomically to the point where, as a home builder, it’s more of a loss leader than it is a wise investment,” Koch adds.
Koch cites national and state regulations, and Environmental Protection Agency and U.S. Army Corps of Engineer regulations for wetland delineations, utilities, building costs and labor costs to install roadways and utilities.
“And then, on top of that, the cost of the money to borrow is starting to go up to the point where if you’re not selling and moving those lots, the cost of that money is astronomical,” he explains. “And it would choke most people out if you’re not strong enough financially to handle it.”
Joe Koch Construction builds houses across Mahoning, Trumbull and Columbiana counties and some in Portage. Most of the company’s houses range between 1,500 and 2,500 square feet and the average cost is between $300,000 and $350,000, plus the cost of the land.
Land prices have increased too.
The business remains busy, but the dynamic has shifted, Koch says.
“Before interest rates really went up, you had a lot of younger couples that were building homes that, with the low interest rate, they were able to afford a home that they otherwise couldn’t,” Koch says.
Since interest rates rose to as high as 6% and 7%, the homebuyer clientele consists of people who aren’t as rate sensitive.
“They’re usually retirees, people moving back in the area, or people that were selling an existing home and were able to take the equity from the sale of that house and spin it into the next home they were building,” he notes.
While there’s a need for more housing, Koch says some areas don’t want it.
“They may not come out and say it, but they’re not looking to add hundreds of homes within their development and within their community,” he contends, declining to identify which communities. “They’re perfectly fine being very rural and very much the way that it was the last 20 to 30 years.”
717 Credit Union
Warren-based 717 Credit Union is among the private sector entities involved with addressing the housing challenges.
In December, the credit union announced that it would administer $13 million in American Rescue Plan Act funds in Youngstown across three programs to improve housing.
That includes an affordable loan program, a residential facade program and a landlord revolving loan program.
In Warren, 717 is working with city council members in the third and fourth wards to offer home improvement loans.
“717’s mission is to help people live better lives financially and to support the communities we serve,” says John Demmler, the credit union’s president and CEO.
Housing is one of the top challenges for economic growth and attracting employers to the region and to improve the quality of life, he says.
“I think that one of the challenges – the social challenges – that credit unions really try to address, is home ownership and frankly, the disparity in home ownership with minorities,” he says. “And it’s something that 717 really wants to try to move the needle on.”
In Youngstown and Warren, the home ownership rate is about 50%, the 717 CEO points out. Minority home ownership is even lower.
Demmler looks forward to the company’s participation in addressing the Valley’s housing challenges.
“We’re honored that the city selected us to help administer the three programs that they had as part of the ARPA funds. And we were pleased to take one of those and then put some of our dollars in to expand it and try to have a larger impact,” Demmler continues. “So, we’re grateful for the city’s confidence in 717…”
Public Housing
Changes in housing extend to public housing too.
Donald Emerson, executive director of the Trumbull Metropolitan Housing Authority, says his organization is going through a right-sizing to meet the needs of its clientele. It’s in the process of securing a firm to conduct a market analysis to guide those changes.
“We’ve done a number of demolitions of some of our housing stock. At the same time, we’ve actually slightly increased the number of vouchers we’ve had as well so that people can utilize some of the private housing that’s out there,” Emerson says. “But we’ve just been trying to get to a stabilized position as it relates to the housing needs of the clientele that we serve.”
TMHA’s public housing is at 97% occupancy.
Emerson, who’s led TMHA for 26 years, agrees with the recent housing study released by Eastgate.
“What I concur with is that there’s not housing that people necessarily desire,” he says. “In this market, you can get housing. There’s plenty of housing, but it’s just not the type of housing people always want.”
People want amenities, he adds.
About Consortium
The housing study defines a housing consortium as an intermediary body at the center of the housing wheel.
It will include representatives from all sectors connected to housing including local government, nonprofit and for-profit developers, social service agencies and lenders.
The consortium should also have a full-time director and an executive committee, the study says.
Koch, the developer, believes his industry plays a critical role in implementing a housing strategy to address the crisis. It’s also going to take buy-in from the public and cooperation from local and state government officials.
“It’s an existential situation for our community, especially when you start seeing the population decline that they’re saying [that] if we don’t make the changes now, by 2050 you’re looking at a 20% decrease,” the home builder adds.
Just like any industry in the private sector, housing developers want to earn a profit, but it’s bigger than that, Koch says.
He’s the third generation of his family in the Valley and he wants to see the community return to a time when jobs were plentiful, and everyone had a place to live.
“… If you have that infrastructure, it trickles down to every little micro economy within the area,” Koch says.
Pictured at top: Jim Kinnick and Justin Mondok, executive director and planning and development director, respectively, of Eastgate Regional Council of Governments, stand in a neighborhood on Youngstown’s south side where empty lots lie between homes. The agency released a study that found houses in Mahoning and Trumbull counties are unaffordable, undesirable or don’t offer what people want.