Representative Gail Pavliga and Representative Lauren McNally — Economic and Workforce Development Committee

Summary

Sponsor testimony under the names of Representative Gail Pavliga, 72nd House District, and Representative Lauren McNally, 59th House District, addressed to Chair Swearingen, Vice Chair Santucci, Ranking Member Upchurch and the Economic and Workforce Development Committee. It supports House Bill (HB 3), which will create a state tax credit for affordable or workforce housing. The testimony says that in 2018 Northeast Ohio had only 40 affordable and available units for every 100 extremely low-income households, a shortage of 126,249 units. It says developers will not build the needed units if the cost will not be returned.

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“Representative Gail Pavliga and Representative Lauren McNally — Economic and Workforce Development Committee.” Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/2023-02-21-econ-workforce-dev-testimony-testimony-205-56c3e0d8d7/, SHA-256 0dcef1b549dc5390ac098906693f627c428f34d138dc63ff453f9b20529e2b55.

Full text

Representative Gail Pavliga
72nd House District

Representative Lauren McNally
59th House District

Good afternoon Chair Swearingen, Vice Chair Santucci, Ranking Member Upchurch and
members of the Economic and Workforce Development Committee. We are grateful for the
opportunity to offer sponsor testimony in support of House Bill 3 (HB 3), which will create a
state tax credit for affordable or workforce housing.

All members of the Ohio House, and this committee especially, are interested in making Ohio
attractive to both live and work. We want people to choose our state as the place they will raise
their families, start their businesses, and stay through retirement. We especially need people to
make that choice in communities like Youngstown and the rest of my district.

For our workforce to thrive, we need people to come here and stay here. Staying here requires
housing, housing that is modern, accessible and affordable. Housing is critical to building a
healthy and prosperous future for Ohioans. HB 3 will help make that future possible.

But what do these terms “accessible” and “affordable” mean? Let’s examine this in the context
of our state’s aging housing inventory. Accessible housing is housing that people with
disabilities can easily enter and use.1 Accessible housing has features people may need to live
independently, like wider doorways, clear floor space for wheelchairs to move throughout the
home, low countertops, assistive technology, and grab bars in bathrooms.2

In Youngstown, Campbell and Struthers most homes were built before WWII.3 The remainder of
Mahoning Valley was built before 1960.4 Only 7% of homes were built after 2000.5 Therefore,
many of the homes in my district do not have these needed accessibility features.
Because of lower-wage jobs and fixed incomes, the housing stock ages along with the
population. Seniors struggle to afford home repairs or modernization, as many can’t access bank
financing for home maintenance or repairs.6 Not being able to make those needed repairs can

1
United States Department of Health and Human Services, Administration for Community Living (acl.gov)
2
cont.
3
http://www.yndc.org/sites/default/files/Youngstown%20Housing%20Strategy.pdf
4
cont.
5
cont.
6
cont.
exacerbate problems with both senior mental wellbeing and physical health.7 This is why in
Youngstown the highest identified housing need is for senior apartments.8 Ohio’s seniors need
this modern and accessible housing stock.

Ohio also needs new housing because of the realities posed from past construction and design.
For example, the widespread use of lead-based paint in older homes, like those in Northeast
Ohio, has resulted in one of the highest rates of children at risk of lead-based paint hazards. In
2018, one in 29 young children tested in Northeast Ohio (3.5%) were confirmed to have elevated
blood lead levels (EBBLs); considerably higher than the statewide rate (2.3%).9 This statistic
cannot and should not be acceptable to any of us here in the Ohio House of Representatives.
Understanding now why updated, accessible housing is in demand and necessary, let’s turn our
attention to affordability.

As for affordable housing, this is most often thought of as a percentage of a person’s income.
While that percentage has changed over time, 30 percent of income is now considered the
standard indicator of affordability.10 It ensures that a household will have enough money to pay
for other mandatory costs like groceries. A household spending more than 30 percent of income
on housing costs is considered to be housing cost burdened.11

Seniors who depend primarily on their Social Security or pension payments for income, which
are fixed, will uniquely struggle when housing costs increase. They are not the only Ohio
population struggling with housing affordability. One in 10 veterans with a mortgage in
Northeast Ohio (10%) is severely cost-burdened, meaning they spend more than 50% of
household income on housing.12 Nearly 25% of renters in Northeast Ohio are severely cost
burdened, which is higher than the state average (23%).13

Black homeowners in Northeast Ohio are twice as likely to be severely mortgage burdened than
white homeowners (15.0% compared to 7.5%).14 In 2018, Black Northeast Ohioans were three
times more likely to live in poverty than their white counterparts (33% versus 11%).15 This is
layered upon a region which has a history of racial segregation and redlining; Cleveland was one
of the most segregated cities in the mid 1900s.16 As a result, Black renters are more likely to be
severely cost burdened (35% compared to 22% for white renters) and face higher barriers to
housing stability.17
7
https://ncrc.org/why-organizations-should-invest-in-home-repairs-to-improve-health/
8
http://www.yndc.org/sites/default/files/Youngstown%20Housing%20Strategy.pdf
9
https://ohiohome.org/research/documents/NEOhio-rHNA.pdf
10
United States Department of Housing and Urban Development, Glossary of Terms to Affordable Housing
11
cont.
12
https://ohiohome.org/research/documents/NEOhio-rHNA.pdf
13
cont.
14
cont.
15
cont.
16
https://www.clevescene.com/scene-and-heard/archives/2018/05/10/new-data-map-reminds-us-cleveland-is-hyper-segregated
17
https://ohiohome.org/research/documents/NEOhio-rHNA.pdf

2
Rent burden can mean a person is one event away from homelessness. If they’re spending over
30% of their income on housing, groceries are harder to come by. Food insecurity can have long
term poor health impacts.18

Should there be an unexpected cost, like an unforeseen medical bill related to bad diet or a flat
tire, these renters may forgo payment and incur medical debt or stop using their vehicle. If that
debt goes into collections, their credit score and ability to gain credit goes down, which has a
direct impact on lease approvals or qualifying for a mortgage. The loss of transportation can
result in job loss, and from there the inability to pay rent all together, putting homeownership or
housing stability in further jeopardy.

Homelessness among students remains high in Northeast Ohio. During the 2018– 2019 school
year, 10,558 public school students in Northeast Ohio (1.8% of enrollment) were flagged as
lacking a fixed, regular and adequate nighttime residence.19 Sadly, the state average for student
housing instability is higher at 2.0%.20

In higher education, housing insecurity for students is associated with lower mean GPA, a lower
probability of obtaining at least a 2.0 GPA, and a higher probability of enrolling part-time rather
than full-time.21 It is also associated with an 8 to 12 percentage-point reduction in the probability
of later degree attainment or enrollment.22 These are our future innovators, workers, and job
creators if we can keep them here, which is especially difficult when the homeowner vacancy
rate in Northeast Ohio (1.7%) is currently slightly higher than the statewide rate (1.6%).23 This
compounds demand side pressure on available housing stock which in turn increases the cost of
housing. Again, these statistics cannot and should not be acceptable to any of us here in the Ohio
House of Representatives.

Nearly two-thirds of households in Youngstown have incomes under $40,000.24 Most available
for-sale housing units in the city are priced below $100,000, which may be affordable to low-
income households, but much of this product is older and likely of lower quality, requiring
substantial investment to repair and/or modernize.25

If someone were to make that investment in repairs, or by demolition and rebuilding, they will
want to see a return. That return will be made by raising the cost of the housing unit. As that
housing becomes more expensive and out of reach, it increases the number of people who will

18
https://www.healthaffairs.org/doi/epdf/10.1377/hlthaff.2015.0645
19
https://ohiohome.org/research/documents/NEOhio-rHNA.pdf
20
cont.
21
https://journals.flvc.org/jpss/article/view/129147
22
cont.
23
https://ohiohome.org/research/documents/NEOhio-rHNA.pdf
24
https://www.census.gov/quickfacts/youngstowncityohio
25
http://www.yndc.org/sites/default/files/Youngstown%20Housing%20Strategy.pdf

3
try purchasing the remaining non-renovated properties. That, too, will raise the cost of those
homes and once again price out a new group of people. The whole community's housing costs go
up, but the number of affordable houses does not, nor does the available resources to fix up the
remaining homes bought within or out of people’s means.

These basic economics are why in 2018, Northeast Ohio had only 40 affordable and available
units for every 100 extremely low-income households (ELI)—those who earn less than 30% of
the area median income.26 This is lower than the state average (44) and translates to only 85,428
affordable and available rental units for 211,676 ELI renter households, leaving a shortage of
126,249 units.27 This gap is present in all 20 counties in the region.28 This cyclical housing
problem I am describing impacts rural, suburban, and urban Ohio communities. It is
economically unsustainable. To be blunt, we need more accessible and affordable housing.

How do we get there? Well, you have to build it. If these 126,249 units were available for ELI
renters, then more housing would come on the market for those earning more money. It reduces
the pressure on the remaining housing stock, and with it the cost. It’s smart economics and
everyone benefits. But developers are not going to build the ELI or senior apartment units that
are desperately needed in Ohio if that cost won’t be returned. Bridging that gap, and helping all
Ohioans better afford homes, is what HB 3 aims to do.

You’ve heard from my counterpart and joint sponsor, Representative Pavliga, about how HB 3
will make Ohio more competitive for this type of development. I’m hopeful you can understand
why being competitive is desperately needed, and needed quickly, to address Ohio’s dire housing
demands. Food, clothing, and shelter are necessary for survival. We want the people who call
Ohio home to actually have a home that supports their physical, mental, and financial wellbeing.

As the tax credit details are finalized, I am happy to update Committee members and continually
be available for any questions you may have. No matter how the numbers ultimately land, I can
assure you HB 3 will be good for all Ohioans, and a welcome relief to those who need it most.

Once again Chair Swearingen, Vice Chair Santucci, Ranking Member Upchurch and members of
the Economic and Workforce Development Committee, thank you for this opportunity to provide
sponsor testimony on HB 3 and this very important opportunity for the State of Ohio. I am happy
to answer any of your questions.

26
https://ohiohome.org/research/documents/NEOhio-rHNA.pdf
27
cont.
28
cont.

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