The lack of housing and affordable housing means Bloomington-Normal is losing out on some of the economic benefits created by Rivian. The shortage also is increasing the number of unhoused people in the community and has the potential to cause an exponential growth in homelessness.
Those are the messages from McLean County Regional Planning Commission community planner Mark Adams.
In 2021, the manufacturing sector in the McLean-Dewitt County labor market had 3,000 workers. Labor Department numbers now show that sector employs 10,000 people. Patrick Hoban, director of the Bloomington-Normal Economic Development Council [EDC], said that still understates the sector because Rivian now tops 9,000 workers and Ferrero’s expansion is not finished.
Adams told an EDC audience at Illinois Wesleyan University that three different sources show 50-80% of Rivian workers have a 45-minute commute to their jobs. The company’s estimate is on the high end of the range, Adams said.
"We're losing that local tax base, people that could be spending their money in Bloomington Normal, helping retain our standard of living and help our community thrive, and a lot of that money is going [elsewhere] just because of the lack of development and affordable options," said Adams.
"Affordable" doesn't mean low-income, he said.
“The average teacher can only afford to live in 12% of the homes for sale within commuting distance of a school where they work. It used to be 30% in 2019. That's on the national level. But last time I checked, it's very important for teachers, for policemen, for firefighters, people who are not really seeing a lot of wage growth to live in the area that they're working in so that they're more accessible,” said Adams.
The situation is more dire than simply losing out on the economic benefits created by Rivian workers spending, said Adams — the lack of housing can drain community resources and increase need in the Twin Cities.
Homeless spike
It may seem a tautology to say the housing shortage has increased homelessness in McLean County.
Adams said the story of a nurse who recently asked for emergency assistance shows how that actually works. The woman lost her apartment when the landlord wanted to remodel.
"Even with a steady income and consistent employment, she could not find a new rental because of the low credit score. After months of working, applying for apartments and paying high hotel fees, they were out of resources and could not afford another night's stay in a hotel," said Adams.
The 2% vacancy rate for Bloomington-Normal apartments means landlords have begun charging hefty application fees and using credit score screening, said Adams. They suffer no marketplace consequence from being pickier in accepting tenants.
That along with rising rents, means trouble for many people who have jobs and steady income as well as those closer to the poverty line. He said a healthy rental unit vacancy rate for a community is more like 6-8%. And he said the 2% vacancy rate cannot realistically go lower because it reflects the fact some people are always in the process of moving.
If Bloomington-Normal doesn't do something to create new housing and affordable housing, Adams said, the current rising trajectory of homelessness could become an exponential one.
The Regional Planning Commission is developing a regional housing recovery study, due out in a couple months. It is supposed to craft actionable items for the community to address to make a dent in the lack of affordable housing, said Adams, sharing another bleak anecdote from a housing assistance coalition report as an example of the kind of crisis the community needs to address.
Kyle, a single father with three kids, worked at a physical labor job. COVID complications cost him his eyesight. He was evicted while his application for disability benefits was in the works. There’s a waiting period for disability support. He had no family nearby. There’s no housing transition program. The homeless shelter is full.
Adams said area social service agencies have distributed more than $6 million in federal pandemic recovery rental assistance to prevent just this kind of situation. That money is running out, yet he said the need has not abated.
As homelessness rises in a community so does the strain on human service agencies, law enforcement, and the healthcare system because being unhoused is a huge mental health stress, he noted.
About half the respondents to a community survey for the housing recovery study indicated they had difficulty affording housing costs: rent, utilities, mortgages, HOA fees and the like. And the survey respondents skewed toward people who are doing alright, Adams said, because people in crisis don’t have time to fill out surveys. The real result is likely higher.
A follow-up question showed housing costs are the main reason for that difficulty.
“And if you are familiar with the national landscape as of August 2023 inflation with those rates, about 60% of inflation is housing related. So this is not a surprise. And we have that data from boots on the ground to really prove it,” said Adams.
More than 30% of survey respondents said they have considered moving out of McLean County, which has adverse implications for further economic growth. It is, of course, an issue not unique to Bloomington-Normal.
“This is a workforce retention issue. The dramatic rise in property values has obviously increased purchase prices, which has shoved a lot of the workforce that are trying to move or stay in the area out of the market,” said Adams. “The U.S. economy lost about $1.6 trillion a year in lost wages and productivity due to this issue."
The U.S. Federal Housing Finance Agency has noted the housing price index for the Bloomington metro area had gone up 37% from 2022 to early 2023.
“When we have shared this number with a lot of external stakeholders, people who live up in Chicago, and other parts of Illinois, usually their mouths dropped because that's quite dramatic. So, great for people who own their home! Not so great for people who would like to own their home, or people who are trying to move here and raise a family,” said Adams.
The survey showed an appetite for zoning reform, requirements for builders include more affordable units, incentives for developers to build duplexes and non-standard units in what was single-family zoning, different density levels, and replacing vacant or blighted commercial areas with housing.
“Up until July of last year, there was no real nonprofit that seeks to acquire pre-existing stock and rehab that so that it could be livable and affordable. I'm happy to say that with the start of the Bloomington-Normal Community Land Trust, they're going to be the first nonprofit to take that on. Obviously, it's a big feat,” said Adams.’
Transitional and permanent supportive housing for those who are unhoused has not grown in recent memory, said Adams, adding the planning commission hopes that changes.
“The McLean County Regional Planning Commission has reached out to a permanent supportive housing developer in Chicago to help us try to build some more permanent supportive housing right now, said Adams. “We only have about 60 units for a growing population. And those units have remained filled.”
Bright spots in the last two years, he said, include the housing navigator at Mid Central Community Action, the McLean County Mental Health Action Plan, and the Invest Health Initiative,
He said those and hopefully new community partnerships will help address the constellation of housing issues the community faces.
