The Housing Crisis at home

  • Finding an affordable place to live is a widespread challenge across the country, and in the metro

  • Omaha’s affordable housing stock has decreased by two-thirds in the last decade

  • Rising prices and bidding wars often force low-income families to live in old housing, often the poorest quality

  • The urgency and severity of the housing issue requires both immediate interventions and longterm strategies

Historically low housing costs have made the metro area an attractive place to live, allowing families to free up dollars for other expenses. In fact, local housing costs in 2009 were nearly 23% below the U.S. average according to the ACCRA cost-of-living index. But, according to World-Herald research, “that advantage has been slipping as Omaha housing costs have outpaced those nationally.” Currently, Omaha’s housing costs are still less than the U.S. – but now only 16% lower.

Omaha vs. u.s. housing costs

23% Lower than u.s. in 2009
16% lower than u.s. in 2023

Finding an affordable place to live is a widespread challenge – and not just for low-income families.

In 1968, the National Advisory Commission on Civil Disorders, commonly known as the Kerner Commission, suggested that households spending more than 30% of their income on housing may face financial strain and increased risk of homelessness. That threshold was established as a guideline for housing affordability in the U.S. We now use that threshold to identify families who are houseburdened, meaning that household spends more than 30% of its gross income on housing-related expenses, including rent or mortgage payments, utilities and other associated costs. 

Currently, more than 50,000 people pay too much in rent alone and that number is expected to increase, with rents increasing about $100 a year. An estimated 1 in 4 households is house burdened overall, but in east Omaha, where concentrations of poverty are highest, an estimated 1 in 5 households spend more than 50% of their income on housing. 

Cost-burdened families are at higher risk of eviction and facing homelessness. When families cannot access an affordable place to live, they are forced to make tradeoffs to cover housing costs. This places stress on the entire household, especially low-income families who may not have savings to depend on.

Availability is a key driver of the price increase, but the law of supply and demand isn’t working to fill the need.

For example, zoning policies limit the types of housing that can be built in neighborhoods, making it more difficult to build new affordable units. Over 80% of Omaha’s residentially zoned land does not allow for attached units or smaller scale multi-family housing. 

As a result of zoning and other factors, Omaha is estimated to have a shortage of nearly 30,000 middle and workforce housing options by 2030. A World-Herald analysis shows the for-sale inventory in the Omaha metro has fallen by two-thirds in the last decade, with the steepest decline affecting the most affordable housing stock. This decline is ranked 13th among the nation’s 100 largest metro areas. With a shrinking pool of homes on the market, potential buyers face bidding wars, extreme prices or simply wait it out.

Omaha’s stock of affordable homes is decreasing

Number of homes for sale by cost

In 2022, more than 50% of the calls to 211 were for housing, and of those calls 85% were seeking expense assistance. 211 has developed a direct partnership with the Omaha World-Herald to operate the Goodfellows program, providing households with emergency expense assistance. Additionally, from 2021-22, 211 worked with MACCH to distribute Emergency Rental Assistance funds from COVID-19 relief packages. While these partnerships have had great success in helping families, demand continues to outpace the resources available. In August 2023, 211 dispersed its Goodfellows funding for the month by the end of the first week of the month.

Even high interest rates didn’t prevent the median home price from climbing another 11% in 2022 – the 6th highest increase among the nation’s 100 largest metro areas. In the fall of 2022, the average price for a new home in Omaha was almost $470,000.  The scarcity of moderately-priced housing creates competition among potential buyers, leading them to vie for homes and apartments alongside individuals with lower incomes. As a result, families with limited financial means find themselves in some of the oldest and poorest-quality housing options. In fact, one-third of Omaha’s housing stock was built prior to 1978. Most of this older housing is located within east Omaha, where the majority of Omaha’s low-income households and middle and workforce housing stock reside. Older housing is at higher risk for health and safety hazards that make homes unsafe for families and can require costly renovations. The apartment closures of Legacy Crossings and Yale Park are just two examples of the detrimental impact unsafe living conditions can have on a family and community. Age also impacts subsidized public housing, as the average age of public housing through Omaha Housing Authority is 45 years old.

The Majority of Housing Calls Seek Help With Paying Bills

Breakdown of 211 Helpline Housing Calls by Need Sub-Category

Too many families live on the edge of homelessness, with rent and mortgage assistance resources quickly depleted.

Studies show that housing assistance reduces homelessness, as well as the anxiety and stress that comes with housing instability. Helping a family pay rent can prevent homelessness and episodes of poverty, as well as avoid the spiral of additional support needed once a family loses a place to live. Without resources to meet the demand, rising prices and scarcity threaten to increase the number of homeless individuals – currently at about 1,500. 

UWM also disperses funds into the community through the Community Care Fund (CCF). Through the CFF, UWM awarded more than $2 million to 36 different agencies to address housing needs for the 2022-24 grant cycle. CCF provides funding to programs focused on providing emergency shelters, transitional and rapid rehousing, housing rehabilitation and housing counseling services, all important parts of addressing housing needs in the community. 

The urgency and severity of the housing issue requires both immediate interventions and long-term strategies ranging from continued housing assistance to expanding housing stock. In addition to efforts focused on connecting households to higher wage jobs, it’s important to implement concurrent solutions aimed at root causes and underlying disparities. Because of the visibility and magnitude of the housing challenge, there’s a sense of urgency and momentum among local leaders to improve the housing situation in our community. By working together and implementing comprehensive solutions, we can make meaningful progress toward increased access and a more affordable housing landscape.

Sources

ACCRA Cost of Living Index, 2009.

Centers for Disease Control and Prevention: Nebraska.

Center on Budget and Policy Priorities: More Housing Vouchers: Most Important Step to Help More People Afford Stable Homes. 2021.

Omaha City Planning: Omaha Housing Affordability Action Plan. 2022.

Omaha Public Schools Community Assessment. 2022-2023.

Omaha World-Herald: Unsafe conditions at apartment complex prompt City of Omaha to shut it down. 2022.

Omaha World-Herald: City of Omaha orders hundreds to evacuate after inspectors uncover gas, electrical and rodent problems. 2018.

Omaha World-Herald: The Omaha Affordable Housing Puzzle: High prices, short supply spark growing statewide crisis. 2023.

Metro Area Continuum of Care for the Homeless: Point in Time Study.

Urban Institute: Housing Matters. How Does Housing Stability Affect Mental Health? 2023