The labor shortage is also an affordable housing problem
Nine of the 10 most common jobs in Columbus don’t pay enough for workers to rent a two-bedroom apartment. It's hard to find employees when they can’t afford to live here.
As businesses have reopened amid the pandemic, employers across the country — particularly restaurants and others in the service and hospitality industries — have voiced concerns over staffing shortages. In recent Ohio Restaurant Association polls, a majority of those surveyed cited hiring issues due to employee shortages.
Think tanks and pundits continue to argue over reasons for the shortage, with some citing a reliance on pandemic unemployment assistance (see: “The myth of ‘nobody wants to work’”) and others pointing to a lack of childcare options for workers. But a recent report from the Coalition on Homelessness and Housing in Ohio (COHHIO) sheds additional light on the issue.
COHHIO, which partnered with the National Low Income Housing Coalition on last month’s “Out of Reach” report, found that in Columbus, the average renter makes $16.99/hour. But in order to afford the fair market rent for a two-bedroom apartment without paying more than 30% of their income on housing, Columbus workers need to make $19.83/hour — a gap of $2.84/hour from the average wage.
In fact, out of the top 10 jobs in Columbus listed by the U.S. Bureau of Labor Statistics, only one occupation pays more than $19.83/hour: registered nurse. (RNs earn well above the two-bedroom pay rate at $31.59/hour, while the next two in line, office clerk and customer service representative, average $17.93 and $17.45, respectively.)
In short, while jobs are available all over Columbus, many potential employees can’t afford to live here.
“There is very much a correlation” between the worker shortage and the city’s affordable housing crisis, said Bruce Luecke, president and CEO of local nonprofit developer Homeport.
In addition to the rent/wage mismatch, proximity to jobs plays a role, Luecke said. Many workers are unable to live near their place of employment, a problem exacerbated by the city’s reliance on buses for public transportation. “For all the great work that COTA is doing to extend transportation, Columbus is pretty much a driving town,” Luecke said.
John Edgar, executive director of Community Development for All People on the South Side, described COTA bus routes as “spokes on a wheel,” with Downtown at the center. Many of the South Side residents his organization serves work manufacturing jobs farther south of the city, which means those who can’t afford a car often have to catch a bus that takes them Downtown, where they then wait for a different bus that goes south to the warehouses.
“Including the time it takes to wait for the first bus, and then the second bus, hour-and-a-half commutes are not uncommon,” said Edgar, noting that some workers may only end up getting a two- or three-hour shift for their trouble.
The wage/rent problem boils down to an oft-cited statistic from the Affordable Housing Alliance of Central Ohio: 54,000 households in Franklin County pay more than half of their income toward housing costs. “Twenty-eight percent of Ohioans don't know how they're going to pay August rent,” said Carlie Boos, executive director of the Affordable Housing Alliance of Central Ohio, earlier this month.
Rental subsidies such as housing vouchers (often referred to as Section 8) are effective in helping low-income renters, but the federal program has been underfunded for years. In Columbus, thousands of residents are eligible for housing vouchers but only a fraction of those who apply and qualify receive them.
Income increases are another way to help address affordable housing challenges, and some local businesses have begun raising wages to attract and retain workers, including restaurants like White Castle, Yellow Brick Pizza and Pierogi Mountain. But a $15/hour minimum wage is still nearly $5 away from the $19.83 needed to rent a fair-market, two-bedroom apartment in Columbus.
Jumping to a higher wage bracket usually requires further education or training, though Luecke said Homeport’s residents often tell him, “I'd love to be able to go through a training class or get more education or to be re-skilled, but I can't afford to take one day off, much less a week or a month. … I’ll lose my home.”
Luecke cited a partnership with Columbus State Community College called Success Bridge, which helps low-income students with housing costs, as a recent example of a creative pilot program to address income and housing needs, which has also led to funding for a new pilot program for the general market, Resiliency Bridge.
Edgar and Community Development for All People took a different approach to workforce housing with the Residences at Career Gateway on the South Side, a partnership with developer NRP Group and Nationwide Children’s Hospital — by far the neighborhood’s largest employer — that provides residents with career training for jobs at the hospital, which is only a 10-minute walk from the development.
“Part of what made that program so innovative was, the housing itself has some development subsidies on the construction site — what's called a Low-Income Housing Tax Credit. Often, that housing gets referred to by the Ohio Housing Finance Agency as ‘workforce housing,’” Edgar said. “When we were first getting involved in this, I was asking, ‘Why do they call it workforce housing?’ And they said, ‘Well, it's intended for entry-level workers.’ But I said, ‘Does it do anything to help people get into the workforce?’ And at that point, the answer was no. So we decided to develop a project that was truly workforce housing: You live there and it helps you get into the workforce.”
“That's a really neat model,” Boos said, “and Columbus is the only one who figured it out. … We could copy-paste that for any industry in town: education, medical, insurance, banking — you name it.”
Of course, local developers could also address the crisis by building more affordable housing, which some are doing, though not at a pace that can realistically catch up to growth and need. “You can’t build your way out of this,” said Luecke, who noted the speed at which Columbus is growing and stressed the need to preserve currently affordable housing. “There are dollars we need to reinvest in our community to keep housing affordable. … There are a lot of investment dollars coming into Columbus, buying up multifamily apartments, and they're paying some premiums that are pretty steep, which means they have to increase rents to pay for that investment.”
Some Central Ohio municipalities are taking a more proactive approach than others to affordable housing for their workers, Luecke said, citing Whitehall and Reynoldsburg. Recently, megachurch Christian Missionary Alliance relocated its headquarters to Reynoldsburg from Colorado.
“The first thing they said about why they did that is, ‘You've got affordable housing,’” Boos said. “How many other deals are passing us by because they're looking at the Columbus market and going, ‘No, I don't want to relocate here if I have to pay Seattle wages in Columbus, Ohio. That's not an economic decision that I want to make.’”
“If you want to do economic development work, and you want to do it right, and you want to court businesses to come into the community to create those jobs,” Boos continued, “you're never going to do that unless you address our housing challenge.”