Why aren’t more people talking about the “next affordable cities” being in the Midwest?

Why aren’t more people talking about the “next affordable cities” being in the Midwest?

On Sunday, The New York Times wrote that “the next affordable city is already too expensive.” The article provided some important cautionary tales about constraints on housing supply and the tensions between old-timers and newcomers borne from housing scarcity. Spokane, Washington, “the next affordable city” saw its home prices rise 60% in the last two years to where the median home value is now $411k. With home values more than doubling since 2014, the percentage of residents who could afford to buy a home dropped from 70% then to 15% today. In markets across the West, many feel that homeownership has gone from a likelihood to a lottery ticket.

Given the median household income in Spokane, WA is roughly $55k, the median household can afford a $178k home. Unfortunately, prices haven’t been that low since 2014. That price-to-income ratio is how we often think about affordability. “Affordable” is historically considered as a ratio of 2.6 (though this may fluctuate with interest rates). And when we look across the nation at the largest 50 MSAs, there were just six markets in 2021 where the price to income ratio was at 2.6 or lower:

  1. Pittsburgh (2.2)
  2. Cleveland (2.4)
  3. Oklahoma City (2.5)
  4. St. Louis (2.5)
  5. Birmingham (2.5)
  6. Cincinnati (2.6)

Of the limited markets where housing is affordable for the median buyer, four are in the Midwest. So the question is, why aren’t more people talking about the affordable cities in the Midwest? Some national folks like Richard Florida certainly are beginning to evangelize the resurrection of the Midwest, but the popular imagination is drawn toward markets like Spokane, Boise, and Bozeman – college and capital cities that are the largest they’ve ever been but still pale in comparison to the population and amenities of the largely dismissed Midwest legacy cities.

Politics may play a role. On the expensive coasts where nearly every large city is experience net-out domestic migration, the public perception of Midwest cities is one of distinctly conservative politics. This is true and false. State politics certainly impact cities. For example, Missouri underfunds transit more than most states – if not all – in the Union. This undoubtedly affects life in St. Louis, a city which still has vastly superior transit compared to a place like Spokane. On the flip side, St. Louis City is a deep blue city, where cities like Spokane lean conservative. I bring up politics not to create a political discussion, but to attempt to lay out what the political landscape looks like in Midwest cities.

Demographics likely also play a role. The Midwest has the largest Black population outside of the South and there are still studies to this day showing evidence of White Flight. Spokane is 85% white, and I’ll hazard a guess that race has an impact on the preferences of wealthier coastal migrants. Despite this, St. Louis should lean much stronger into embracing its Black culture and meeting the needs of its Black residents.

Location shouldn’t be ignored, either. Spokane is a 4.5 hour drive from Seattle, a much cheaper and more convenient option for visiting family than flying from a Midwest city like St. Louis. Additionally, Spokane is near the many outdoor activities that folks in Seattle value like skiing/snowboarding and other recreation in the mountain ranges – which is not to say that the Midwest doesn’t always have valuable outdoor recreation in abundance, but it is a different vibe.

Mesofacts may be the most important factor turning the public eye away from the rise of Midwest cities. Pete Saunders, a Chicago planner, writes that, “mesofacts are facts that were once true but no longer are.” The “Rust Belt” moniker may no longer be true, but many believe that jobs are hard to come by in the Midwest. In reality, St. Louis has eight Fortune 500 companies (Spokane has one Fortune 1000 company by comparison) and one of the fastest growing startup scenes in the country. The region appears to have realigned itself to the modern economy. The median household income in St. Louis is also 15% higher than Spokane. St. Louis is also consistently seeing north of $1 billion in development in just the city proper each year now, far from a city devoid of investment. These types of mesofacts, and there are many others that deal with social and cultural views, drive the understanding of a place.

As the list of affordable cities dwindles, the national eye should turn to the Midwest and acknowledge the rise of the affordable cities here. With their extensive existing infrastructure and some forward thinking politics (e.g. upzoning, eliminating parking minimums, supporting current residents), Midwest cities have the potential to much better absorb the demand shock that other American cities have struggled with.


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