Cuyahoga County Considers Sweeping Housing Program to Stabilize Neighborhoods
Updated 1/8/19: Ordinance 02019-0001 was introduced by the Cuyahoga County Council and had a first reading. It has been referred to the Community Development Committee.
Land Bank Update
January 4, 2019
CLEVELAND, Ohio – Cuyahoga County proposes to launch a $30 million, six-year effort to stabilize home values, eliminate blight and to encourage renovation and construction of affordable housing.
If approved by County Council, the Cuyahoga County Housing Program also would refocus the county’s land bank from demolition to rehabilitation. Legislation will be introduced Tuesday, according to a council agenda posted Friday.
The legislation is sponsored by Council President Dan Brady, Vice President Pernel Jones Jr. and council members Dale Miller and Cheryl Stephens. It was drafted in concert with the county land bank, formally known as the Cuyahoga County Land Reutilization Corporation, and the county’s Department of Development.
Brady told cleveland.com that the program adopts recommendations from a 2016 housing study that suggested reinvestment in existing housing, and support for affordable housing countywide.
If approved, the program would begin in 2020.
What would the program do?
The aim would be to end years of disinvestment in some county neighborhoods brought on by aging houses, population decline and a foreclosure crisis that caused houses to be abandoned.
If approved as drafted, the program would address each of three housing needs in a county where 18,000 homes — over 4.2 percent of the county’s entire housing stock — are vacant.
The county land bank would oversee the renovation of homes and development of affordable and mid-level housing markets.
The Department of Development would provide loans, grants or technical assistance to homeowners for home repair, as well as assistance in obtaining mortgages.
Ninety percent of the money for home renovations would be used in either affordable or middle market neighborhoods.
How is this program different from others?
Brady said the new program would build on the work already completed by the county land bank and the expertise it has acquired.
Since 2009, has demolished more than 7,000 homes and rehabilitated about 1,800 others. It has also developed data, mapping and other techniques to improve neighborhoods by identifying homes for demolition or rehabilitation.
“Finding which house to improve to improve a whole neighborhood, to affect the valuation of the neighborhood most effectively — that’s where the [county land bank’s] strategy comes in,” said Kahlil Seren, research and policy analyst for Cuyahoga County Council.
Will the land bank stop razing homes?
No, but demolition will be greatly reduced. Cuyahoga Land Bank President Gus Frangos told cleveland.com that the time is right for his agency to begin pivoting to rehabilitation efforts because federal and county money for demolition is dwindling. Money already set aside for demolition will continue to be used for demolition and will not be affected by the housing program.
Frangos estimated that 3,000 to 5,000 homes are candidates for demolition in Cuyahoga County, down from 20,000 in 2009. He hopes more state money will be made available to continue demolition efforts. In the meantime, county dollars tagged for rehabilitation will drive the bulk of the county land bank’s work.
The housing program would require the county and county land bank to commit $30 million to rehabilitation, or $5 million each of the next six years. Most of the money, $21.5 million, would come from fees collected on delinquent property taxes. Another $5 million would come from the county’s portion of casino tax revenue, and $2.5 million would come from the county’s general fund.
Some money also might be generated by the rehabilitation of homes, or as the result of contributions from community development organizations, charitable organizations, banks, real estate developers or municipalities. Those profits would be reinvested into the program, Frangos said.
How would the renovation component work?
Homes in the county land bank’s inventory of vacant properties could be renovated by the county land bank, then sold to buyers, or could be renovated by the buyer.
The county land bank would identify properties suitable for a buyer to renovate, develop a renovation plan and post the property for sale. Prospective buyers would be screened to determine if they can handle the renovation. The county land bank would hold the deed in escrow until the buyer pulls permits and completes the required renovations.
What is the homeowner-assistance component?
Financial and technical assistance would be provided to current and potential homeowners who want to find affordable housing or maintain the housing they already have.
The financial assistance would be for home repairs, or mortgages of $70,000 or less. Banks often won’t give so-called smaller-dollar mortgages, even if the prospective buyer is creditworthy, Seren said.
The aim would be to making home ownership more accessible for lower- and middle-income people, young families, and first-time buyers.
What is the housing-market component?
Efforts to improve the housing market in county neighborhoods would be three-pronged: spurring investment in emerging markets, constructing homes on vacant lots, and laying the groundwork for investment in future markets.
For neighborhoods that are considered emerging markets, the goal would be to improve housing values and jump-start private development, in part by showing banks that an area can be worth investing in. The county land bank could do that by strategically choosing properties to rehabilitate, thereby creating comparable homes in the neighborhood and improving chances that private investment takes place.
The second part would involve constructing homes on vacant lots in neighborhoods with primarily older homes. Many buyers want newer homes with updated designs and modern amenities. In Cuyahoga County, that often means moving out of the city or inner-ring suburbs, where much of the land has already been developed.
“Those amenities are sometimes the reason people move to newer areas. In-fill construction will give choices to people who like the feel of an older neighborhood but want a newer house,” Seren said.
The final piece is the cultivation of future markets. Some neighborhoods are in such bad shape that groundwork needs to be laid before investment can occur.
The county land bank would prepare those areas through strategic planning, including the commissioning of feasibility studies, developing concepts for neighborhoods and piecing together parcels for future development. Such activities would be coordinated with the Department of Development, local municipalities, community development corporations and others.