Photo: Last Week Tonight, YouTube
John Oliver explains the rent squeeze in Cincinnati and elsewhere on the June 19, 2022 episode of Last Week Tonight.
Cincinnati's housing market is so dismal, even comedians can see it.
During the June 19 episode of HBO's Last Week Tonight, comedian and host John Oliver noted the housing crisis the United States finds itself in. Potential homeowners have found themselves largely priced out of buying, thanks to skyrocketing asking prices, but renters especially are feeling the hurt. According to a June 9 report from real estate broker Redfin, the nationwide median monthly rent in May was more than $2,000 per month.
That's definitely hitting Cincinnati, Oliver noted, saying that the Queen City was among a group of metros with rate hikes of more than 30% over May 2021.
"Yeah, rent is skyrocketing. And that is the last thing you want to hear is on the rise, along with COVID cases, murder rates and Henry Kissinger’s life expectancy," Oliver said, in part. "The median monthly asking rent in the U.S. surpassed $2,000 for the first time last month. That’s up 15% since the same time last year, well above the rate of inflation. And it’s up over 30% in cities like Cincinnati, Seattle, and Nashville, and nearly 50% in Austin. You, or someone you know, might well be struggling to find a place right now, or are being priced out of where you currently live by your landlord."
Redfin's report this month backed up Oliver's claims, with Cincinnati actually experiencing a 32% year-over-year rent increase, according to the company's data. The city's monthly median rent last month was $1,713 – a little short of the national median, but high enough to cause plenty of trouble when worker wages do not keep up with inflation.
Oliver said on Last Week Tonight that Cincinnati and other cities are suffering from a lack of affordable housing due to a number of factors, including overpriced single-family homes and local laws and development deals.
"Let’s start with understanding our current housing supply. You’ll often hear that high rents are a supply and demand issue: basically, too many renters, not enough units. And that is partially true, because there currently aren’t nearly enough affordable units in the U.S.," Oliver said. "Apartments are being built. But the problem is, thanks in part to local NIMBY ["not in my backyard"] opposition to more affordable multi-family housing, it’s mainly been at the high end. In fact, in the last three decades, the national stock of rental units available actually grew by more than 13 million. But, crucially, the number of units at the lowest end of the market fell by nearly four million. That might be why if you’ve ever tried to search for affordable apartments in your area, Google just says 'nope.'"
"And this serious lack of new affordable housing has enabled landlords to charge higher rents for the units that exist – something that’s increasingly attracted institutional investors. These are corporate landlords, like private equity firms or even publicly traded companies, that pool the rents of their tenants and sell them as investments," Oliver continued. "They’ve long been players in apartment rentals, but more recently, after the 2008 housing crash, companies like these popped up to snap up single-family homes and rent them out. And because institutional investors are always trying to maximize returns, they’ll take any opportunity to push rents higher."
As CityBeat had previously reported, outside investors gobbled up houses in metropolitan areas across the country — including in Greater Cincinnati — at an alarming rate in 2021, The Washington Post found after analyzing data from Redfin.
According to the analysis, investors bought nearly one in seven homes sold in America's top metro areas, the most in at least two decades. The analysis considers real estate investors to be large corporations, local companies, or wealthy individuals who generally don’t live in the properties they are buying, who either look to flip the homes to new buyers or rent them.
In Cincinnati, 15% of homes were purchased by investors, which is more than those purchased in a typical metro area, the Post found. In 2015, investors bought just 7% of the housing stock.
In March, the 2022 Demographia International Housing Affordability Index from the Urban Reform Institute and the Frontier Centre for Public Policy found that Cincinnati had the 9th-most affordable housing market as of the third quarter of 2021 after comparing 92 major markets in eight countries. But the report considered housing to be "affordable" when its median multiple was at or below 3.0 (the median multiple is "a price-to-income ratio, which is the median house price divided by the gross median household income," the report noted).
Cincinnati's median multiple in that report was 3.8, which was classified as "moderately unaffordable" – the only reason Cincinnati ranked in the top 10 of affordability was because other cities were much worse. Pittsburgh was the only city under the "affordable" 3.0 threshold for that time period.
"In a well-functioning market, the median priced house should be affordable to a large portion of middle-income households, as was overwhelmingly the case a few decades ago," the report asserts.
The index is ranked primarily on income in relation to housing prices, a situation that started becoming unsustainable several years back and has worsened since the COVID-19 pandemic began in early 2020. And the Urban Reform Institute and the Frontier Centre for Public Policy said in March that the crisis wasn't over.
"The number of severely unaffordable markets rose 60% in 2021 compared to 2019, the last pre-pandemic year," the report said. In 2019, the United States had 14 severely unaffordable housing markets; that number jumped to 27 in 2021. The report added that the combination of high-income shoppers buying larger houses further from urban cores due to working from home during the COVID years plus supply-chain issues that slowed the construction of new housing have contributed heavily to the disruption in affordability.
"With rents being squeezed across the board, and protections few and far between, lower-income renters are, obviously, the most vulnerable," Oliver said. "Even before the [COVID-19] pandemic struck, 23 million people lived in households that paid more than half their income on rent and utilities, which is just not sustainable for anyone."
The current trend is a continuation of last year's woes. Throughout much of 2021, local monthly rents increased in year-over-year comparisons. In June 2021, the overall median rent in Cincinnati was $1,200 per month, an increase of 17% over 2020. Rents increased for Cincinnati studios, one-bedroom apartments and two-bedroom apartments last June, too, a report from Realtor.com said. At that time, people in Greater Cincinnati paid $1,025 per month for a studio, $1,155 for one bedroom and $1,275 for two bedrooms. That equates to studios going up by 2.5% year-over-year, single bedrooms by 12.7%, and doubles by a whopping 21.4%.
"It’s a complete shit show. So what can we do about it? Well, there are some small things," Oliver said during Last Week Tonight. "We could pass rent-stabilization laws and laws that prohibit discrimination against recipients of housing choice vouchers and make it easier for landlords to accept them. We also could pass laws mandating the sealing of most eviction records and give people a right to counsel in housing court."
"But I would argue what we really need to do is fundamentally change our mindset away from simply hoping that we can just tinker around the edges of housing policy and the private market will sort the rest of this shit out. Because we’ve tried that for decades, and yet, here we are," Oliver continued. "Instead, we need to agree: housing is a human right."
Watch the Last Week Tonight rent segment from June 19 below.
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