The pandemic-induced single-family home craze may be cooling off a bit, but it seems Cincinnati’s rents haven’t reached their limits yet.
According to a Sept. 15 Rent.com report, Cincinnati is one of the top 10 US cities with the largest average year-over-year rent increases in August. Additionally, this increase is being felt by renters of both one- and two-bedroom units.
The average monthly rental cost of a one-bedroom unit in Queen City is $1,283, a 26.32% increase since August 2021, the report said. Meanwhile, the monthly rent for a two-bedroom unit here is $1,537, up 28.13%.
Cincinnati isn’t the only Ohio city experiencing rental inflation. According to Rent.com data, the average monthly one-bedroom rent in Toledo increased by 22.52% (to $869 per month) and in Columbus by 4.76% ($1,422) over the past year. But Cleveland has had one of the largest year-over-year rent declines in the country for one-bedroom units, down 18.97% ($1,141) over the past year.
In contrast, two-bedroom unit prices in other Ohio cities appear to be declining or flat, while those in Cincinnati continue to rise. Cleveland’s two-bedrooms were down 11.26% ($1,754) and Toledo’s 0.14% ($918). Columbus saw a slight gain of 0.46% ($1,643).
Ohio is experiencing its own national peak. Average rents across the state of Buckeye increased by 49.69%, from $633 a month in August 2021 to $948 last month for a one-bedroom apartment. The jump for a two-bedroom in Ohio isn’t quite that big — 22.69%, or an average of $1,038 per month last year, to $1,253 in August.
Nationally, the average monthly rent for a bedroom is $1,721, an increase of 27.13%. Two-bedroom units average $2,052 per month, up 23.43%. Cincinnati’s 28.13% year-over-year increase for two-bedroom apartments is larger than the national increase.
According to Rent.com, its results are based on data from its multifamily rental portfolio. Other rental and real estate platforms use different inventories, classifications, timeframes and dates, but paint a general picture of the overall increase in average monthly rent compared to pre-pandemic levels.
affordability in question
At the national and local levels, monthly rent rates have risen as wages have largely stagnated, meaning people are paying a larger chunk of rent from the same (or lower) paycheck. According to Realtor.com, the average monthly rent burden in Cincinnati this August for everything from a studio to a two-bedroom is 21.3%. That’s up from a 20.2% rent charge at the same time last year.
For decades, financial websites have suggested that most renters limit their rent burden to no more than 30% of their gross income. According to one hypothesis by NerdWallet, “If you make $2,800 pre-tax per month, you should be spending about $840 on rent.” NerdWallet notes that large cities and hot markets may require a higher rent burden or special considerations and that renters may have additional needs that eat up their paychecks, such as: B. Student loans or car payments.
According to Rent.com, the average monthly rent for a two bedroom in Ohio is $1,253. But a July 28 Bloomberg article shows that a worker in Ohio would need to earn $17.05 an hour to be able to afford that average rent. Bloomberg continues: “In every state in the US, the cost of renting a home exceeds minimum wage.”
According to an MIT calculator, a single Ohio resident with no children would need to earn $15.61 an hour to earn a living wage (the minimum income needed to meet a person’s basic daily needs).
But the minimum wage in Ohio is only $9.30 an hour. The federal minimum wage is just $7.25 and has been the same since 2009.
In March, the Urban Reform Institute and Frontier Center for Public Policy’s 2022 Demographia International Housing Affordability Index found that Cincinnati had the ninth cheapest housing market for the third quarter of 2021, comparing 92 major markets in eight countries.
But the report considered housing “affordable” when its median multiple was at or below 3.0 (the median multiple is “a price-to-income ratio that is median home price divided by median gross household income,” the report notes). ). Cincinnati’s median multiple in that report was 3.8, which ranked it as “moderately unaffordable” — the only reason Cincinnati ranked in the top 10 for affordability was because other cities did much worse. Pittsburgh was the only city below the 3.0 “affordable” threshold for the period.
“In a well-functioning market, the average house price should be affordable for a large proportion of middle-income households, as was largely the case a few decades ago,” the report says.
The index was ranked primarily by income relative to house prices, a situation that began to become unsustainable a few years ago and has worsened since the start of the COVID-19 pandemic in early 2020. And the Urban Reform Institute and the Frontier Center for Public Policy both told March that the crisis is not over yet.
“The number of absolutely unaffordable markets increased by 60% in 2021 compared to 2019, the last year before the pandemic,” the report said.
In 2019, the United States had 14 extremely unaffordable housing markets; That number rose to 27 in 2021. The report added that the combination of high-income buyers buying larger homes farther from urban cores due to working from home during the COVID years, and supply chain issues are preventing construction of new homes slowed, have contributed greatly to the affordability disruption.
During the June 19 episode of HBO’s “Last Week Tonight,” comedian and host John Oliver noted that Cincinnati has seen a 30% rent increase over the past month, meaning many residents have been evicted from their homes.
“Obviously, with rents being depressed across the board and protection few and far between, low-income renters are the most vulnerable,” Oliver said. “Even before that [COVID-19] When the pandemic struck, 23 million people lived in households paying more than half of their income on rent and utilities, which is unsustainable for anyone.
Stay connected with CityBeat. Subscribe to our newsletter and follow us on Facebook, Instagram, TwitterGoogle News, Apple News and Reddit.
Send CityBeat a news or story tip or submit a calendar event.