Dispatch: Central Ohio could open doors to homeownership
By Chris Berry
When it comes to the American dream, homeownership plays a starring role for most. These days, however, this dream is becoming seemingly harder and harder to realize. As a millennial who has yet to purchase his first home I know this firsthand.
Nationwide, it now takes 14 years for those earning the median income to save for a 20% down payment on a median-priced home, according to a new report by Unison. In places like Los Angeles and San Francisco, that number surges to 43 and 40 years, respectively. Here in Columbus it takes 12 years on average.
While those of us in central Ohio have a cheaper path to homeownership than our fellow Americans on the coasts, 12 years is still a large hill to climb. And if recent history is any indicator to where we are headed, things are only starting to heat up. This past spring Columbus was ranked as the nation’s hottest real estate market. Last year, the median price of a home in central Ohio was $195,000. The year prior? $181,500.
To be certain, this booming Columbus housing market is a good thing. It means our economy is strong and it is, with the central Ohio unemployment rate near historic lows at 3%. We are fortunate to have a solid economic base consisting of world-class higher education, led by Ohio State University, and state government. Our business sector is vibrant, led by 20 Fortune 1000 companies and a robust small-business environment. Ask around to our fellow Midwest cities and they are envious of the Columbus startup scene. Not to mention our health care system, which is world-class.
While all of this can be true and should be celebrated, this success doesn’t come without challenges. Homeownership is one. If available housing does not match our growth, many will be left behind. And some feel as though they already have been. In cities like Los Angeles and San Francisco, the problem just might be too big to fix. Others, like Austin and Denver, are on that path toward unachievable homeownership.
Solving this problem will take a robust effort by business and civic leaders, our city’s best innovative minds and smart public policy. We’re lucky that there are leaders in place who are already working to attack the homeownership problem head-on. But they’ll need help and what happens here in Columbus could prove to be a model for America.
Last month, a number of business and civic leaders, led by Huntington’s Steve Steinour, announced The Housing Action Fund. As reported in The Dispatch, this $100 million fund, financed entirely by private-sector contributions and investments, will offer low-cost loans to for-profit and nonprofit developers who commit to certain affordability requirements in their rental pricing. This type of coordinated high-level commitment shows the seriousness of both the problem and the commitment to solve it.
Another group tackling the homeownership problem is Columbus startup Rhove. Rhove offers renters cash back on rents and these direct deposits go into savings which help build toward homeownership. In its recent launch, Rhove partnered with the new Gravity development in Franklinton. This creative solution keeps renters in their apartments while allowing them to save for their home purchase.
In California, the Chan Zuckerberg Initiative is doing its part to address the homeownership problem for educators looking to live in the communities in which they work. CZI has partnered with Landed, a company that teams up with local investors across the West to cover up to 50% of the down payment for an educator’s home. In return, Landed takes a cut of the proceeds when that house is eventually sold.
Here in Columbus we should look for similarly innovative solutions to help our educators live in the communities in which they serve. But we shouldn’t stop there. Why not make a similar commitment to our nurses and first responders?
The power of Columbus is when leaders from diverse backgrounds and sectors work together to tackle these types of problems. Challenges like homeownership aren’t unique to Columbus and central Ohio, but perhaps the solutions can be.
Chris Berry of Columbus is a co-founder and partner at The Green Block Group, a strategic communications and innovation consultancy firm. He is the former chief of staff at the Ohio treasurer’s office.