Officials in Springfield and the Chamber of Greater Springfield are starting to take a closer look at the region’s housing, an issue that’s plagued several Ohio cities for years but became amplified following the Great Recession.
Economic development officials in Clark and Champaign Counties are worried a lack of newer homes has made it more challenging to draw new business and encourage skilled workers to live in both counties. The issue dominated a recent discussion with members of the Greater Ohio Policy Center, in which chamber and city officials highlighted challenges facing small and mid-size industrial cities like Springfield.
The policy center is a nonprofit that advocates for urban communities in the state but has increasingly focused attention on cities such as Springfield, Lima and Sandusky in recent years.
“All of these cities in Ohio and their peers in other states, the problem is their heydays were often right around World War II,” said Alison Goebel, executive director for the Greater Ohio Policy Center. “That’s when most of the housing was made and it’s just obsolete at this point.”
Finding ways to encourage new development is critical, as Clark and Champaign Counties compete with other communities to attract skilled workers, said Mike McDorman, executive director of the Chamber of Greater Springfield. In many cases, he argued, medium-and higher paid workers are choosing to commute to Clark County for work, which means less revenue for local municipalities and businesses, he said.
City officials also said it’s a good time to look at opportunities to encourage new development, but cautioned that any solution needs to take several factors into consideration. Along with a need for new housing, Springfield and many similar communities are often dealing with neighborhoods filled with aging structures that decades after they were built, are now unfit for habitation, said Shannon Meadows, community development director for Springfield.
Building new homes will boost the local economy, but even the new neighborhoods will eventually struggle to maintain their value if they’re surrounded by blight in other parts of the community. It’s possible to develop incentives to encourage new development, Meadows said, but it will be equally important to ensure enough resources are available to continue to improve existing neighborhoods as well.
“What we have as a community is an oversaturated market and a declining stock and it is in every neighborhood,” Meadows said. “The fact that we have too many structures in our market does not just affect the neighborhoods that are 50 percent or higher rental, but it affects our neighborhoods that have traditionally been assumed to be stable with high-value houses. From a community development perspective, it is an issue that needs to be addressed in a 360-degree manner, not just in a 180-degree trajectory.”
Demand, but little inventory
Even with competition from neighboring communities, there’s plenty of demand for housing in Clark County, said Lisa Smedley, president of the Springfield Area Board of Realtors. The economy has slowly gained steam since the recession. But Clark County continues to face a lack of available inventory, she said.
Home sales in Clark County were slightly ahead of last year’s pace at the midpoint this year. About 280 homes had been sold in Clark County by the end of June, about an 11 percent increase compared to the first half of last year. The number of homes sold for the first six months in Champaign County was slightly behind last year’s pace. There were 82 homes sold in Champaign County this year according to the WRIST listing service at the end of June, compared to 87 homes sold at the same time last year.
Despite demand, area builders face a range of challenges, said Dan Kegley, president of the Building Industry Association of Clark County. Costs for everything from construction materials like lumber and concrete to land purchase prices are climbing, he said. Increasingly, area construction firms are also beginning to face a significant labor shortage, he said, as the construction industry has fallen behind in luring younger workers to the field.
The biggest challenge, Kegley said, is luring investors who are willing to take the risk to develop new housing options. He noted two fairly recent subdivisions in Clark County include Enon Bluffs, outside Enon, and a second subdivision near the back section of Simon Kenton Farms. Some older developed subdivisions in the county also have some lots available.
But one of those subdivisions was built by a developer who has owned the land for years, while the other subdivision is being built on property purchased in a distressed land deal, Kegley said. Even those subdivisions may not have been built without those circumstances, he said.
“If we put in a couple of developments in the right locations we would attract buyers and residents,” Kegley said. “That is the million-dollar question though, where and who is willing to take the risk?”
Economic development officials in both Clark and Champaign Counties said new housing options, in some form, will be important to remain competitive with other communities when trying to attract workers and residents.
In Champaign County, the Champaign Economic Partnership recently conducted a survey to collect information on ways to attract engineers to the county to work at area manufacturing firms. They survey also included questions about the community, including where those workers live and why, said Marcia Bailey, executive director of the CEP, which serves as the economic development agency for Champaign County.
Even if they’re not ready to purchase a home in Champaign County, Bailey said the results showed those workers wanted to see a variety of housing available throughout the county, including condos, apartments and single-family homes.
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“It lends itself to be able to be creative with that kind of a response,” Bailey said. “If someone’s not ready to venture into building a housing development of single-family homes, there might be a market for more condos or apartments. We’ve had more interest downtown with loft apartments over the past few years but there are still plenty of buildings that have an upstairs that have not been renovated into housing yet.”
McDorman argued the struggle to attract new development is one of the biggest hurdles the region’s economy faces as it tried to compete with neighboring communities. To catch up to other communities, he argued incentives are needed to attract new development and for existing property owners to improve their property.
He said community leaders will need to look at offering as much of a 100 percent tax abatement for several years to encourage developers and existing home owners to invest more in their properties.
“Without a strong plan that includes some severe stimulation of our housing market, we’re heading toward a housing crisis in Springfield,” McDorman said. “We have not built any significant housing since 1962, and that was Northridge.”
Several local officials are planning to visit cities like Akron later this fall to learn more about what other communities have done to address similar problems, he said. Local officials will also likely consider a housing study as part of ongoing county comprehensive planning, he said.
Taking a risk
In Springfield, Mayor Warren Copeland said the city is willing to consider a range of options once concrete proposals are developed.
Developing new housing stock that can make buyers take a closer look at Springfield will likely mean a range of options, including single family homes, downtown apartments and rehabbing existing structures, Copeland said. Local officials are looking to get a better idea of what demand might look like, including recent efforts to seek historic tax credits to renovate the McAdams Building downtown for new apartments, for example.
Springfield also has existing stock available that’s often inexpensive compared to surrounding communities, which can also be a draw for younger workers considering starter homes. The city will also continue efforts to provide affordable homes for lower-income residents as well, he said.
“The question is whether there’s a market for Speedway workers and others who have somewhat higher incomes,” Copeland said. “It’s a good thing to test. It’s a good thing to see if if works and if it works we’d do more of it.”
Whatever plan is developed will also need to address the city’s problem with an oversupply of existing structures, which is holding down residential values now, said Meadows, Springfield’s community development director.
“We need to make sure we are addressing the full value of the community in order to protect the individual value of residential property,” Meadows said.
At the same time, she said local officials also can’t simply wait for new investment without taking some risks.
“It is a chicken and egg thing,” Meadows said. “But I’ll tell you nothing good ever happened waiting for the chicken to lay the egg. Sometimes you’ve just got to go do it and sometimes you’ve just got to jump off the cliff and say ‘this is what we’re going to do.’ At the same time it’s nice when we jump off that cliff and know we’ve got a life jacket on.”