The Wall Street Journal recently published an op-ed piece about “the housing crisis that is plaguing rural America.” Using Orange County in southern Indiana as an example, the writer, Kerry Thompson, frets that “There simply isn’t enough housing for the people who want to live there,” which is “having a devastating effect on rural America’s economy.”
Evidence of a housing crisis? This 2,900-square-foot home in rural Orange County, Indiana is currently for sale for $265,000, or $91 per square foot. A Wall Street Journal op-ed somehow argues that this low price is evidence of a rural housing shortage. Note the Trump banner; I suspect this is really evidence of the divide between urban and rural areas, as the Journal writer doesn’t seem to understand rural areas despite running an organization that is supposedly devoted to rural problems.
This is a problem, Thompson claims, because the pandemic has led to “upticks in interest in rural areas, as more Americans determine to flee the cities for greener pastures.” If there is a rural housing crisis, there may not be any greener pastures for them to move to.
Thompson is the executive director of the Center for Rural Engagement at the University of Indiana in Bloomington. Bloomington is a couple of counties north of Orange County, so Thompson should know what she is talking about. But apparently she doesn’t, as her evidence that there is a rural housing crisis in Orange County or any other rural area is thin to nonexistent.
Orange County happens to be an area I know and love, as it is the home of much of the Hoosier National Forest, whose timber program I shut down in the 1980s, as well as the French Lick Scenic Railway and Indiana Railway Museum. Unfortunately, not a lot of other people love it, as its population has been slowly declining since 2010.
Unlike Orange County, California, people haven’t been moving away from Orange County, Indiana because of high housing prices. According to the 2019 American Community Survey, the median home price in Orange County was $94,700, which was only 1.6 times median family incomes. Zillow shows dozens of Orange County homes for sale, including this very nice, 2,900-square-foot brick house with four bedrooms and three baths on four acres with an asking price of $265,000. The house is four minutes from downtown Paoli (the Orange County seat, population 3,600) and about an hour from the Louisville International Airport.
For comparison, the median price of a house in Monroe County (home of Indiana University) was nearly twice Orange County’s at $175,600, or 2.3 times median family incomes. Thompson takes that as more evidence of a housing crisis in Orange County as it means that builders are more likely to want to build in Bloomington than in Paoli. What it is really evidence of is lack of demand in Orange County.
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Thompson’s only other evidence of a rural housing crisis comes down to one statement: “In 2017 there were a mere 79,000 single-family home starts in all of ‘nonmetropolitan’ America, compared with 223,800 in 2005.” The first problem with this is that 2005 was at the crest of the housing bubble. Nationwide housing starts since them have dropped by more than half, so the nonmetropolitan decline isn’t exactly shocking.
A second problem is that she’s using the wrong measure of rural housing, as “metropolitan” is not the same as “urban.” As defined by the Census Bureau, metropolitan area boundaries are equal to county boundaries, so the entire Mohave Desert is “metropolitan” as it is in the same county as Riverside and San Bernardino. Lots of rural housing is left out when Thompson counts only nonmetropolitan areas. This is important because telecommuters who want to become exurbanites still want to live within an hour or so of a major airport, which means they are likely to locate in a rural portion of a metropolitan county.
Finally, Thompson’s numbers pose a false conundrum: the pandemic has led to a surge of interest in rural areas in 2020, so why weren’t more homes built in rural areas in 2017? Maybe, just maybe, because people in 2017 didn’t know there was going to be a pandemic in 2020.
If people want to move to Orange County today, not only are there many existing homes for sale, it would be easy for them to contract with a builder to construct one. Like many southern Indiana counties, Orange County doesn’t have a zoning ordinance. Anyone who wants to move there to get away from dense and stifling cities need only buy some vacant land and build their dream home.
If you could live anywhere you wanted but were leaning towards a rural area, where would you choose? Perhaps Arizona or New Mexico for the sunshine. Perhaps Montana or Wyoming for proximity to Yellowstone National Park. Perhaps central Oregon to be near summer hiking and winter skiing. But, as much as I love Orange County, I don’t think it would be high on the list of many potential exurbanites.
Thompson’s solution to this made-up crisis is, of course, government subsidies. She wants the federal and state governments to “prime the pump” by expanding “rural-specific loan guarantees to banks and lenders.” This is supposed to give builders an incentive to build more rural homes.
The problem, however, isn’t a lack of loan guarantees; it’s simply one of low demand. The nation’s rural population has declined from 61 million in 1990 to 58 million in 2010. This decline resulted from increased farm mechanization along with reduced timber cutting, mining, and other rural occupations. There is no rural housing crisis and it’s sad that the prestigious Wall Street Journal would lend its pages to such a ridiculous claim.
Indiana farm real estate average value per acre: $6,580.
from USDA Land Values 2019 Summary
https://tinyurl.com/y8qh5jj6
I worked for a few years in the rural US midwest and was impressed with the financial and economic sophistication of the agricultural community.
There were plenty of houses built along main highways on lots roughly 100 feet wide (front-feet) and 400 feet deep — one acre. These lots were more valuable to a home owner than the farmer because of their highway access.
And anyone moving from a big-city suburb will be able to pay his/her annual real estate taxes out of petty cash.
The key thing to keep in mind here is that this is a narrative and not reality. Facts don’t matter in narratives, stories do. The story here is one of crisis which can only be solved through funneling more money to the planers etc. What I find mind mindbogglingly ironic about this story is that the same people pushing it actively seek to make living in rural areas unattainable for all but the wealthiest. To achieve that they need other stories. “Oh we are running out of water or the water is being polluted.” “Sprawl will destroy open space” “The infrastructure costs are too high (despite literally decades of people building in the area with out incident)” etc etc. Its time to put story time to bed and deal with facts.
dude, Log cabins.
Housing is more expensive than ever before, Nevermind the average home size has doubled in the last 30 years…might have something to do with that. A 25% reduction in floor plan size would result in a near 50% reduction in house volume. Volume which increases by a factor of 30-60% for every 100-200 sq ft increase in floor area, that volume adds to the higher energy cost to heat and cool. When realtors advertise 10 foot ceilings they’re scamming you…how the hell are you supposed to clean them? An increase in ceiling height increases the useless amount of air volume you have to heat and cool. A decrease in ceiling height by one foot decreases your air volume by 1000-2000 cubic feet. It takes 19 BTU’s of energy to change the temperature of 1000 cubic feet of air one degree Fahrenheit. It takes 2-3 times that much energy to decrease the temperature (Via air conditioning) one degree Fahrenheit. The average home size in the US is now 2,600 square feet of floor space. With a ceiling height of 9 feet that’s over 23,000 cubic feet of interior volume. A McMansion with 9 foot ceilings, needs several thousands BTU’s of energy per day to climate control. A floor plan decrease by 25% eliminates nearly 6,000 cubic feet of volume you’d have to cool down or heat up and a ceiling reduction of just one foot eliminates nearly 8,000 cubic feet of volume.
Despite thousands of years of technological progression there’s still no substitute for the southern facing house and the thermal mass wall.
There is a housing crisis in America, a cheaply built, crappy house crisis. It’s all chicken wire and plywood.
Reading between the lines, she is complaining that these rural areas do not have the type of mid-rise housing she prefers. The people living there are not smart and sophisticated enough to know how to live. so it is a crisis.
Now if Orange County decided to grab a few hundred million of federal funds and propose building a light rail train to nowhere, she would see that as progress.
Clearly, the Antiplanner has not looked at rural rental listings in Central Oregon. Or in Southern Oregon. Or in Northern California. Bend, Klamath Falls, Mt. Shasta, Medford, even Alturas. No rentals. There is a serious housing shortage in rural areas in the West. UGBs a factor? Sure. Demand is a higher factor, especially in places like Bend that are surrounded by national forests.
Hey, Antiplanner. Can you help me find a house for rent near Camp Sherman, Black Butte Ranch, Sisters, Sunriver for $2000 a month or less? Thanks in advance!