Omaha Defies “Housing Trilemma” Trade-Off
Aug 26, 2016 05:43PM
By Tom McCauley
If the top 100 cities in the U.S. comprise a family awash in drama and competition, then Omaha is the kid sibling everyone keeps forgetting about. When discussed at the national dinner table (if at all), Omaha is misconstrued, underestimated, and blamed for things that are probably Portland’s fault. “Why can’t you be sunny and fun like your coastal brothers and sisters? Oh, ‘you don’t coast’? That’s your excuse for everything.”
But the national report cards keep coming back aglitter with praise. They say: Omaha has a great future, America. Heck, it could be president someday.
The latest batch of good news comes from, of all places, the Oregon Office of Economic Analysis. In a June report, economist Josh Lehner sought to answer the question of whether a city can boast affordable housing, lots of available jobs, and a high quality of life? His hypothesis was, essentially, “nope.” Cities can usually perform well on one or two measures, he found, but they can’t homer on all three. Lehner calls this “the housing trilemma.”
Consider Austin, Texas. Austin boasts a robust job market and highly desirable quality of life. Consequently, the housing market cannot keep pace with the influx of new residents, so even a one-bedroom apartment costs a couple of body parts per month.
Omaha, however, is one of only three cities that performed solidly in all three categories of Lehner’s report. The other two? Oklahoma City and Des Moines, Iowa.
Inspired by Lehner’s work, David Drozd, research coordinator for UNO’s Center for Public Affairs Research, looked further into the sources that Lehner used in the housing trilemma study. Drozd said that Omaha and Des Moines were pretty much the only two cities that were able to score within the top 30 on all three indicators of affordable housing, a strong economy, and a high quality of life.
“It’s just good to see that, overall, the Midwest’s larger metros were tending to come into that sweet spot and basically achieve something that the author premised was somewhat impossible,” Drozd says.
Moreover, Drozd says there is one more crucial perk to Omaha not covered in the Oregon housing trilemma study: the factor of the city’s unusually low cost-of-living, cost-of-goods, and services. Not just the housing, everything is cheaper here.
“As people make their location decision,” Drozd says, “they often just look at the nominal salary of the job they’re looking at and don’t factor in—at least to the degree they probably should—that cost-of-living component, which tends to make the salary you see go a lot further in the Midwest.”
What about the loss of ConAgra? Will the food giant’s departure knock Omaha out of the housing-jobs-quality of life sweet spot in future studies?
Drozd says it doesn’t help, but it might not hurt, either.
“(Losing ConAgra) takes away some of the large job base. One of the reasons Nebraska, and specifically Omaha, was able to ride out the recession pretty well was that we had the diversity in employers. On the flip side, as those people move away, that opens up some housing, so that we don’t get pinched on the housing-affordability side.”
Visit oregoneconomicanalysis.com/2016/06/08/the-housing-trilemma for more information. B2B