Affordability: Cleveland Rising

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“A lot of people are moving here. I met a friend of a friend just last night who moved here from Brooklyn, two others coming from the West Coast next month.” A recent transplant of four months to downtown Cleveland, Danielle, an assistant professor at Oberlin, has begun to get a feel for the city. She’s part of an influx of young creative workers moving into cities formerly maligned as dying spaces, places of post-industrial decay. Affordability is a big part of the appeal of these cities. “Beers are still $5 pint. The food here is excellent. And cheap: I had venison heart tartare two nights ago and I think it was $12. Housing is cheap too. There are a lot of old warehouses that developers are turning into badass lofts in Downtown, Ohio City, Tremont, Gordon Square.” Having formerly lived everywhere from Boston and Philadelphia to Houston, housing affordability is something that quickly comes into our conversation. While home prices and rents have been steadily climbing in most coastal cities, many markets along the Great Lakes are still cheap enough to attract buyers from major metropolitan areas. “I’m renting a 3000 square foot loft that has exposed brick, hardwood, floor to ceiling windows that stretch the length of the apartment in the middle of downtown for $1400 a month. I sublet a suite in Center City Philly for roughly that. If I were to move to OC, Tremont, or Gordon Square I could probably get something swank for $1000 or something okay for $700.”

 

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Image credit: cleveland.com

 

Home prices across the country rising quicker than wages and with a large population of young professionals only now getting on their feet, many metro areas are experiencing an affordability crisis. For inexpensive cities on the rebound, this opens up a lot of interest among big city dwellers looking to minimize expenses and maybe purchase a home. According to data provided by Trulia, Cleveland is currently the most undervalued metro in the nation. In the fourth quarter of 2014, home prices in the city were 20 percent below market fundamental prices and 33 percent below their 2006 pre-crash peak. Home prices in Cleveland are currently appreciating at a much slower rate than other rust belt comeback cities gaining 1.8 percent in year-over-year change compared to 4.9 percent in Dayton, 10.2 percent in Toledo, and 12.9 percent in Detroit.

 

Image credit: greaterclevelandlife.com

Image credit: greaterclevelandlife.com

 

Despite this, Cleveland is developing quickly, putting money into improving public transit and redefining core neighborhoods. CEOs for Cities recently wrote that “the city has turned to transit as a promising fix for the city’s problems.” The push towards making neighborhoods more walkable/transit oriented is in line with efforts made in other smaller “18 hour” cities like Denver, Charlotte, and Austin–cities that are growing rapidly and showing signs of long term sustainable development. Widespread investment in Cleveland’s downtown has led to a population boom of 96% over the last two decades according to the Urban Institute. They note that the vast majority of this growth is among younger people from  20-34-years old (even as the 35-44-year old population continues to decline). Much of this growth is in educated and skilled workers at a pace “matched by only four other cities: Washington DC, Providence, Rhode Island, Indianapolis, and San Francisco.”

 

Image credit: cleveland.com

Image credit: cleveland.com

 

While Cleveland is making sweeping steps to improve its urban core neighborhoods, there are things that remind recent imports that Cleveland is still a work in progress. “It’s a dark city,” Danielle notes. “There just isn’t that continuous stream of well lit store fronts that you get in NYC or Philly so walking around at night feels dark. Some neighborhoods are only one or two miles apart, which is walkable in some cities, but it gets so desolate with all the abandoned buildings that it doesn’t feel safe. Public transit is only okay.”

The buzz of activity surrounding downtown Cleveland’s revival is similar to the type of actions being made in other smaller, more affordable cities across the country. As major markets like San Francisco, New York, and Los Angeles are becoming priced out for many startups, small businesses and homebuyers alike, cities like Denver and Austin are becoming more appealing. Driven by exceptional “brain gain” along with investment in domestic gas and oil, these two cities are among the fastest growing metro areas in the nation. Taking inspiration from the success of downtown revival projects, Rust Belt industrial cities are bucking trends and stereotypes by taking on similar urban developments, combining affordability and a rugged blue collar charm with active development of walkability and industrial building repurposing. As more and more metro areas fall out of reach for middle class homebuyers, time will tell if this investment pays off along the shores of Lake Erie.