Bloomington-Normal is losing ground on its housing gap. A 2021 housing study showed an unmet need for more than 4,000 housing units. Patrick Hoban, director of the area economic development council, said an update to the study takes Rivian employment into account, and shows the number is going in the wrong direction.
“We're pretty confident in these numbers, by using the same math that they did, that we're going to need averaging about 7,500 units now," said Hoban.
Hoban said builders have supplied or begun construction on roughly 1,000 housing units since the study came out.
Higher mortgage interest rates, increased difficulty in securing construction loans, and even more job growth on the horizon with an expansion of the Ferrero candy plant in Bloomington, shows there will be no resolution to the housing crunch for years, he said.
“There is a way a community can grow too fast just like a business can grow too fast. But it's benefiting the rest of the region because we have a lot more people commuting in," said Hoban, CEO of the Bloomington-Normal Economic Development Council (EDC).
An economic ripple effect of new job creation through the addition of Rivian suppliers and contractors has yet to play out in the area, he added.
"I believe it's going to take a lot of collaboration just regionally. Regionally, we're all having the same issue when it comes to talent. Generation X is much smaller than the Boomers. The Great Resignation was real. We're going to have to import more workers, or we're going to have to heavily rely on robotics," said Hoban.
The already high-priced housing market is not likely to ease. The average number of listings of homes for sale before the pandemic was 456. Now it's 186. The time a residence stays on the market has gone from 89 days to 42. Hoban said many people are offering cash deals to sellers.
Over time, the rise in housing prices might make the community less affordable than it is now, he said, noting the cost of living in Bloomington-Normal is lower than it is in Chicago — by $3,000 a year on average for the same things. The EDC has even crafted a marketing campaign based on that.
“If this continues to rise, we're not going to be able to tout that much longer because the cost of living is going to go up with it," said Hoban.
The U.S. Federal Housing Finance Agency noted the house price index for the Bloomington metro area has gone up 37% in the last year and a half.
And average earnings have risen from a pre-pandemic $25 an hour to more than $31 an hour.
