Category: Business

Categories
Business News

Economists: Cincinnati’s Regional Economy Outperforming Both Pittsburgh and Cleveland

Cincinnati Children's Hospital Medical Center Research Tower

Analysis of data recently released by the Cincinnati Branch of the Federal Reserve Bank of Cleveland shows the area’s economy in a relatively healthy position compared to nearby metro areas, and to the nation as a whole.

LaVaughn Henry, Vice President and Senior Regional Officer at the Cincinnati Branch, says that he believes the region’s economy is poised for continued economic growth, and he points to several factors that contribute to his optimism – a highly educated workforce, an economy healthily spread amongst different sectors, and numerous Fortune 500 companies headquartered in the city.

When diving into the numbers, Henry points to 30% of the regional workforce holding a bachelor’s degree as an item that makes the city an attractive place to do business.

He also touts the city’s relatively low unemployment rate which stands at 5.2% – about even with Pittsburgh and a full percentage point better than the rates nationally and for the state of Ohio. Making the area’s economy even stronger is the fact that its top industry sectors – professional and business services, health and education, and skilled manufacturing – all continue to experience healthy growth.

The Federal Reserve also pointed to continued capital spending as a bright spot that is boosting employment and earnings. Specifically, two hospital expansions and the opening of General Electric’s Global Operations Center at The Banks are expected to support thousands of jobs through 2016.

While the data found that Cincinnati is out-performing many of its peers, it also found that it has room for improvement in terms of wage and GDP growth.

Wages, the Federal Reserve says, have yet to reach pre-recession levels locally, and, while growing, are growing modestly at best. Researchers say that Cincinnati is suffering from a national problem of too many workers in the labor market, and high growth in low-paying service sector jobs that depress wage data. And while the region’s gross domestic product is growing faster than the national average, economists note that, like wages, it has yet to reach pre-recession levels.

When compared to Pittsburgh and Cleveland, the only other two metropolitan regions with more than 2 million people in the Federal Reserve Bank of Cleveland district, Cincinnati is, by far, the healthiest performer.

In Cleveland economists note that its economy is recovering from the Great Recession much better than the recession of 2001, yet it continues to trail national averages. While unemployment is falling throughout the region, it remains stubbornly high at 6.8% – above both the national and state averages. A bright spot, however, is Cleveland’s 28.5% bachelor’s degree rate within the workforce is at least on-par with the national average.

Pittsburgh, meanwhile, recovered the quickest of the three from the Great Recession, but has since seen its economic indicators stall. While unemployment has consistently stayed below the national average, growth in almost all industries in the city was lower than the national average. And while GDP grew from 2009 to 2012, economists at the Federal Reserve expect the data to be somewhat more somber once data is released for 2013 and 2014.

Categories
Business News

Tiny Living Space Concept Intrigues Capacity Crowd at Niehoff Studio

Last month UrbanCincy worked with the Niehoff Urban Studio to host our annual fall event. This year the partnership focused on the idea of tiny living, or living in a space that is less than 400 square feet.

According to the information presented at the event, the average tiny home is, on average, about 243 square feet. They can be either completely mobile, as in mounted on a truck, or somewhat permanent such as constructed out of shipping containers. They can also, but rarely are not in the United States, constructed as normal practice with standard materials.

The event saw a larger than expected turnout with well over 100 attendees. Food truck Bistro de Mohr was on hand to serve hungry patrons. The main room hosted a display of different tiny living arrangements.

Presentations were given by a local design firm named Department 7, and Dan Elkin who is developing a tiny home project in Detroit. Following the formal presentations, a panel discussion was held that was moderated by UrbanCincy.

The panel included Vince Sansalone with SAID-DAAP, tiny home owner Natalie Hendricks, artist and designer Joe Hedges, architect and UrbanCincy contributor Bradley Cooper, and University of Cincinnati professor Leah Hollstein. The panel’s discussion was very engaging and ranged from the reasons for developing tiny houses, which includes demographic shifts in the way Millennials view housing, to how tiny houses can fit into the urban fabric of cities. The group also discussed the various challenges for developing ways to make tiny houses legal in cities.

Overall the event was informative and engaging. Participants came away asking for more information about tiny homes and the audience generated good discussions with the panel conversation.

Cooper also distributed a survey about living preferences on tiny houses to those in attendance. Cooper is assembling the information as part of his application to develop a tiny living project through the Haile Foundation’s People’s Liberty Fellowship grant. If you were not able to complete that survey in person, you can do so now online.

UrbanCincy, as a public outreach partner for Cooper’s project, will provide regular updates on his efforts.

Categories
Business News

Federal Reserve Data Reveals Cincinnati Economy is Out-Performing Regionally, Lagging Nationally

New data from the Federal Reserve Bank of Cleveland, which covers Ohio, western Pennsylvania, the West Virginia panhandle, and the eastern half of Kentucky, provides a glimpse into the recovery and transition of the region’s economy.

According to the newly released data, spanning from 2001 to 2012, this Federal Reserve region has weathered an incredibly tumultuous 11 years.

“Historically, much of the region has specialized in manufacturing, a sector that has been particularly hard hit over the past few decades,” noted Federal Reserve Bank of Cleveland research analyst Matthew Klesta in his data brief. “Since the end of the Great Recession in 2009, however, the decline in manufacturing employment has slowed. In some places, employment has even grown.”

Since the first year of recorded information in this data set, all 17 Metropolitan Statistical Areas (MSA) in the region, with the exception of Wheeling, WV, saw losses in manufacturing employment – the region’s historical economic stalwart. MSAs like Dayton and Steubenville posted losses of almost 50%. Cincinnati, meanwhile, saw its manufacturing sector decline by nearly 25% – a mark that is low by regional standards.

International trends in trade in the early 2000s, like China’s entry into the WTO and the increase of offshoring from developed to developing nations, combined with the Great Recession, dealt a critical blow to the area’s manufacturing sector. Excluding education and health services, every other industry in the region saw significant jumps in the annual percentage of jobs being lost during the Great Recession.

For example, between 2001 and 2007 the average loss per annum for the manufacturing sector was a little less than 3%; but from 2008-2009 it jumped to nearly 7%. Since the Great Recession, however, many MSAs in the area have posted modest gains in manufacturing employment, while still falling well below baseline levels in 2001.

While the manufacturing sector has declined throughout this Federal Reserve region, health and education sectors have grown. Despite a nationwide average of 1.2 health and education service jobs gained per 1 manufacturing job lost, only four MSAs in the region (Cincinnati, Columbus, Huntington, Pittsburgh) can boast an overall replacement of lost manufacturing jobs with health and education employment.

The replacement of manufacturing jobs with health and education employment does not bode well for the region’s workers. According to the data, the health and education sectors pay, on average ($44,000 in 2012), significantly less than manufacturing ($55,000 in 2012).

But while this changing economic landscape has meant a smaller presence for manufacturing in the region, this Federal Reserve Bank region continues to be highly specialized in that economic sector. Perhaps as a result, population loss continues to plague many MSAs within the region.

From 2001-2011, while the national population grew by 10% the regional population posted an average gain of only 1.6%. In fact, only five (Cincinnati, Huntington, Akron, Columbus, Lexington) of the 17 MSAs in the region saw their population rise over that time period. Of those five metropolitan areas, only two (Lexington and Columbus) posted gains in both population and private-sector employment.

Pittsburgh and Wheeling, meanwhile, managed to post positive gains in private-sector employment while still shedding population. The remaining 10 MSAs all posted losses in private-sector employment and population.

Categories
Business Development News

Dive Into the Topic of Tiny Living Spaces This Friday at the Niehoff Urban Studio

Tiny Houses Event FlyerTo most people, tiny homes often are viewed as a novelty. The idea of building a small house or living in an apartment with less than 500 square feet sounds like living in a closet.

However; with the rising cost of housing and the growing desire for people to do more outside their homes, the idea of tiny living is stirring a new conversation. Tiny homes, for example, could be used to address urban revitalization, homelessness or retrofitting existing structures, such as this garage project in Atlanta.

This is why UrbanCincy has partnered with the Niehoff Urban Studio to host Tiny Living as part of Digressions in Art, Architecture and Urban Design. The event, which will take place this Friday, will feature presentations on the subject of tiny homes and an expert discussion panel.

Writing about the event, organizer Ana Gisele Ozaki postulated that tiny homes are “an antithesis of suburbanization and the ‘American Dream’ as we know it, tiny spaces/living fundamentally question consumption of our current system by proposing repurpose of materials, as a clear response to the 2009 housing crisis and many other flaws of our current economic/financial system.”

This event is part of the continuing partnership between the Niehoff Urban Studio and UrbanCincy to examine complex urban issues. Earlier this year UrbanCincy moderated the panel discussion for the Metropolis & Mobility workshop focused on Cincinnati’s Wasson Way Corridor.

The Tiny Living event is free and open to the public, and will run from 5pm to 8pm. The evening will begin with interactive pieces produced by the DPMT7 and ParProjects, and will be followed by a series of short presentations at 6pm to get the discussion started. The panel discussion will begin around 7:30pm.

The Niehoff Urban Studio can be reached via Metro*Plus and the #24, #78 Metro bus lines. The collaborative, public studio is also within one block of a Cincy Red Bike station.

EDITORIAL NOTE: UrbanCincy‘s local area manager, John Yung, will be one of the panelists at this event. John is also a graduate of the University of Cincinnati’s Master of Community Planning program.

Categories
Business Development News

Cincinnati Gentrified at One of Nation’s Fastest Rates Immediately Following Housing Boom

Vine Street [Travis Estell]

During the housing boom years between 2000 and 2007, many cities saw an influx of new housing and new wealth into their core neighborhoods. It was a trend that was consistent throughout America as wealthier individuals looked to move back into the cities that had been abandoned in prior decades.

This trend was more pronounced in some cities – Atlanta, Washington D.C., Denver, and Seattle – than others. But for the most part, the majority of the cities were gaining wealth relative to their regional average. Following the burst of the housing bubble, however, virtually every city saw this rate of improvement slow down.

According to research from the Federal Reserve Bank of Cleveland, the majority of 59 cities studied now fall between either a one percentile decline or one percentile increase between 2007 and 2010. This is in contrast to the housing boom period which saw cities like Atlanta and Washington D.C. move up 8.7 and 5 percentiles respectively.

“During the housing boom, a number of large cities in the United States experienced redevelopment in their lower-income neighborhoods as higher-income residents moved in, a process known as gentrification,” wrote researcher Daniel Hartley. “Since lending standards have tightened with the onset of the housing bust and the financial crisis, we wondered whether gentrification has continued after the recession in places where it was happening before.”

The results of their research found that only a select handful of regions reasonably continued to see relative wealth growth in their principal cities. The findings also detected one region that bucked the trend and actually increased its gains over the housing boom period.

“Another interesting case is Cincinnati, which barely changed in income ranking from 2000 to 2007 but has increased at a pace similar to Denver or Washington during the 2007 to 2010 period,” the research team noted.

Hints of such activity were realized in December 2013 when UrbanCincy uncovered that census tracts all over the city were experiencing wealth increases.

While the gains in wealth may seem like a positive thing for the city, not everyone is so thrilled about the changes taking place in Cincinnati.

“It seems to me what this information really indicates is how, when people experiencing poverty are systematically removed from a certain area, and housing stock is renovated with the goal of selling to wealthier people, property values increase,” says Jason Haap, an area teacher and prominent advocate for the city’s homeless population. “The fact that Cincinnati has seen gentrified growth during a time of slow economic growth in minority communities further exacerbates the situation.”

One of the tools in order to prevent the displacement Haap mentions from happening is including ‘set asides’ in new developments for affordable housing. The Cincinnati Center City Development Corporation (3CDC) has done this a bit in Over-the-Rhine at projects like Mercer Commons and Bremen Lofts, but there is no official city policy or requirement to do so.

What also factors into the relative changes studied by the Federal Reserve Bank is the widespread poverty and low income levels of those living within city limits. Thus, even nominal improvements would show up as a potentially significant increase.

We do know, however, that some housing prices, particularly in the city center where demand is highest, are starting to get out of hand. Most new apartment developments in the Central Business District now feature rents of $2,000 or more per month, and in one recent case, a three bedroom flat on Sixth Street rented for a whopping $4,600 per month.

In such cases it is leaving many now wondering if these prices are not only driving out existing residents but, paradoxically, also preventing many new potential residents from moving in.

“Demand in Cincinnati’s core is insatiable, and supply is only coming online at a trickle,” explained Derek Bauman, an urban development consultant and chairman of Cincinnatians for Progress. “Without urban housing supply, we may miss the coming wave of new residents. At nearly $2 per square-foot rents and $250-$300 a square-foot sales, we may not have Manhattan prices yet, but we’re damn near Brooklyn.”