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Published: Sunday, 11/29/2009

Home economizing: Census study points to ways area households cope in recession

BY GARY T. PAKULSKI
BLADE BUSINESS WRITER

ON CHRISTMAS morning in some homes in northwest Ohio and southeast Michigan, a lump of coal will be a source of warmth, not a punishment for naughty children.

Several dozen customers in the region served by Dennis Coal & Stove in Wauseon have returned to the age-old fuel source. “It's mainly people trying to be economical,” explained Carol Dennis, an owner of the company.

A U.S. Census survey conducted last year confirms that a small number of households in metro Toledo have begun heating with coal — using a new style of coal stove, not the furnaces that were commonplace up until World War II, according to Ms. Dennis.

Although use of the fuel is rare, it was but one way that, in the opening year of the recession, residents of metro Toledo took steps to economize as a way of coping with growing financial strain, the Census survey suggests.

The findings, released recently, are contained in the 2008 American Community Survey. In between the national Census every 10 years, the annual survey tracks changes in the way Americans live and work through detailed questionnaires sent to 3 million households, 109,000 of them in Ohio.

The report for metro Toledo, which covers Lucas, Wood, Fulton, and Ottawa counties, suggests that residents made significant adjustments last year — the first full year of the national recession that officially began in December, 2007.

More households made do with one car. The proportion with a single vehicle rose to 37 percent from 34 percent in 2007 and 36 percent in 2003. The number of such households jumped by 6,604, or 7 percent, to 96,662 last year.

Meanwhile, households with two or more cars dropped to 55 percent from 57 percent in 2007.

Although natural gas remained the dominant heating fuel — used by 77 percent of households, up from 76 percent in 2007 — coal wasn't the only alternative getting a second look.

Wood was the heat source in 1,964 homes, up 25 percent in a year and sevenfold in five years.

Other findings point to reasons for looking for ways to economize.

The share of homeowners sinking 30 percent or more of their incomes into mortgage payments, property taxes, house insurance, and utility bills rose to 34 percent in 2008 from 30 percent the year before and from 27 percent five years earlier.

Many federal agencies consider 30 percent the point at which “monthly owner costs” become excessive and a drag on household finances, according to the U.S. Census Bureau.

And such costs absorbed 35 percent of the income of just under a quarter of households in the Toledo area, up from 21 percent in 2003 and 2007.

Median housing expenses for homeowners with mortgages skyrocketed by 25 percent between 2003 and 2008 to $1,274 from $1,016, Census figures show. For 2008, the rise was 2.5 percent, from $1,243.

Meanwhile, median household income in metro Toledo last year fell 4 percent to $46,442 from $44,514.

“It's really tough out there,” said John Walters, operations director for Community Credit Counseling Specialists in Toledo. “People are really struggling.”

Despite the perception that consumers now in financial distress lived extravagantly and spent irresponsibly during the boom, that is not always true, he said.

Mr. Walters recently counseled a family of five from East Toledo who were having trouble juggling a house payment, $7,000 in credit-card bills, and payments on a home-repair loan.

They have pared food expenses to $200 a month.

And their only extravagance was installing a new door and windows for the house they moved into three years ago.

“They never missed a payment in their life,” Mr. Walters recalled.

Community Credit Counseling deals with many people considering bankruptcy. The firm has noticed a steep decrease in the number of filers with incomes high enough to warrant a plan for gradually repaying debt rather than walking away from it. “People have less income coming in and they're having problems making the plans,” Mr. Walters said.

The American Community Survey paints a picture of metro Toledo's housing supply as slightly older and showing signs of wear.

Twenty-six percent — down from 28 percent in 2007 — of homes and apartments in the four-county region were built before 1940. Just 9 percent were built since 2000.

The number of occupied houses slipped by 729 to 261,088. The biggest factor in the decline was a 5 percent rise in the number of vacant houses, to 39,536. The increase corresponds to higher numbers of home foreclosures and bank repossessions.

There also was a jump in the number of houses and apartments reported not to have complete kitchen facilities — defined as a sink, stove, and refrigerator. Such dwellings accounted for 1 percent of living units, or 3,231 residences.

Also up: homes lacking complete plumbing facilities (sink, toilet, and tub or shower) and residences consisting of a single room. The number of one-room units — which would include many studio apartments — was up a startling eightfold to 9,258.

The Census Bureau cautioned that the increase may have resulted in part from a change in the way the question was asked to make it easier to understand.

But Kay McCardle, a veteran Toledo real estate agent, sees signs that the mortgage meltdown and financial turmoil of the past year are taking a toll on houses in the area.

“When you drive around, it's so obvious that people aren't able to do basic maintenance like they were years ago,” she said. “We almost see the houses crumbling before us.”

Homeowners facing foreclosure often can't or won't take care of upkeep, noted the agent, who is with Welles Bowen Realtors.

And some homes that go vacant are vandalized, aggravating the situation further, she said.

Selling prices have begun to moderate after dropping over most of the past two years.

But the American Community Survey findings suggest that people in metro Toledo may not have a clear understanding of how the housing downturn affected the value of their residences. They reported median values of $137,400 in 2008, compared with $134,400 in 2007.

Figures compiled by the National Association of Realtors, however, show that the median price of a home sold in metro Toledo last year dropped by 15 percent to $91,200.

The Census survey showed that the median number of rooms in homes in metro Toledo rose to 5.9 from 5.7.

The share of people who owned their homes dropped slightly last year to 68 percent from 69 percent in 2007.

And more of them owed on mortgages. Owner-occupied houses without mortgages dropped to 30 percent from 31 percent.

The survey also included information about people who rent houses and apartments in metro Toledo.

The number of renter-occupied units increased by 2,768, or 3 percent, to 83,362.

Median rent was $634, up $22 or 3.6 percent, from 2007. And the share of renters paying $1,000 or more a month rose to 12 percent last year from 10 percent in 2007.

Contact Gary Pakulski at:gpakulski@theblade.comor 419-724-6082.


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