Dive Brief:
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Rochester and Buffalo, NY, are the most affordable of the country’s 53 housing markets that have populations over 1 million, according to a Buffalo Business First analysis of Census Bureau data.
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Based on their ratios of median home value to median household income, Rochester claimed the No. 1 spot. The area's median owner-occupied home was valued at $138,900 in mid-2015, while median household income there was $53,667, giving Rochester residents $2,588 in home value per $1,000 in income.
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Buffalo yielded $2,611 in home value for every $1,000 in income, followed by Pittsburgh, with a ratio of $2,648 to $1,000. Kansas City, MO, and Indianapolis rounded out the list’s top five spots.
Dive Insight:
Rust Belt markets like Buffalo and Pittsburgh are starting to reawaken as prospective buyers forego pricier coastal metros for a lower cost of living. Buffalo, for example, is seeing renewed construction activity as tech companies like Tesla contribute square footage to the new manufacturing economy taking root there and in the broader region.
Whether the economic shift sparks substantial population growth is still to be determined, though a report earlier this year from the Urban Institute indicated that targeted efforts to attract and retain millennials would bode well for its long-term growth prospects.
Developers are already ramping up efforts to provide more housing oriented toward young professionals who want to live close to work, nightlife and other amenities. One Buffalo developer is at work on a 13-acre, $48-million project offering accessibility to downtown via walking and biking paths and public transportation. Of the project’s 159 apartments, 80% will be available to residents earning 60% or less than the area median income and the rest will be for those earning 60% to 120% of the AMI.
Other development in the area includes six historic manufacturing buildings in one North Buffalo neighborhood that are being or have been transformed into apartments, according to The Buffalo News. Growing demand for rental housing is pushing prices up, threatening affordability for many of the city’s long-time residents.
Buffalo rents for one-bedroom apartments rose 5.7% from February to March of this year, and another 6.5% from March to April. Although Buffalo’s rent growth stabilized in May, the median rent there was above the national median of $1,012 at $1,054.