The Living City: What's being done to create and preserve affordable housing?

Cities are engines of our local and national economies, and centers of creativity, culture, and entertainment. But they are under more pressure than ever. This is the latest in a monthly series, The Case for Cities, that looks at how Cincinnati and similar cities can grow by becoming places of choice, as well as models of social justice.

It’s getting harder to buy a house. Even here, considered one of the more affordable metros in the country.

Home prices surged more than 13% last year. That came on top of a record 20% increase the year before.

Paychecks aren’t keeping up. Wages rose only 4%. And that was the biggest raise in more than two decades.

Home builders are doing what they do – building homes – in a market where prices are rapidly heading up. New homes in Deerfield Township are starting at $770,000, in Villa Hills starting at $530,000, in Delhi Township starting at $525,000.

The same market focus is not being applied to affordable housing. But a coalition of social service organizations, lenders, foundations, developers, and others has emerged to bring attention, energy, awareness, and money to the affordable housing issue. Progress is being made. It won’t happen overnight, as the problem has taken years to get to this point. But things are happening.    

A groundbreaking report called Housing Our Future, released in 2020, put a number on how far the Cincinnati metro region is falling short in housing that people of low incomes can afford.  “Cincinnati and Hamilton County now have a deficit of at least 40,000 units affordable and available to extremely low-income households,” the report said. The term “Extremely low income” means households earning less than $16,500 a year – in other words, poverty.

The affordable housing gap widens

The affordable housing gap is actually much wider. The 40,000 figure doesn’t account for households that earn more than poverty-level incomes, but still have problems finding homes they can afford.

A household earning about $35,000 a year ideally should pay about $900 a month or less, (including utilities) for housing in order to have enough money left over for other things, to avoid being “rent-burdened,” in housing parlance.

That’s about how much Amazon is paying for jobs at its new warehouse at the airport. A teacher just starting out at Cincinnati Public Schools makes about $45,000. They usually can't afford a $550,000 home, and homes and apartments at that income level are also becoming increasingly scarce.

Since the Housing Our Future report was released two years ago, the market has been stoked with record increases in home prices, widening the affordability gap, and putting housing even farther out of reach for the poor, the working poor, and even middle-income buyers.

“The market is so much more heated up today than it was then,” says Liz Blume, director of Xavier University’s Community Building Institute, who helped assemble the HOF report. “I haven't done any updated numbers,” she says, “but they're worse, for sure.”

Housing is at the heart of the American Dream, an idea of equality, prosperity, and stability that still has currency today. A city that wants its urban population to grow, and wants to keep its talent – young and old – here, must have places for those people to live. Housing touches so many parts of our communities: safety, wages, poverty, child care, evictions, homelessness all become part of the discussion.

And race.

“The burden of unaffordable housing does not fall equally on all Cincinnati and Hamilton County residents,” the report says. Blacks disproportionately live in low-quality, unaffordable housing, and predominantly Black neighborhoods experience much higher rates of eviction than other neighborhoods in Hamilton County, the report said.

“One quote I heard recently around these discussions was, ‘Once you start talking about anything, you end up talking about everything,’ ” says Joe Huber, CEO of the Cincinnati Development Fund, a key player in housing financing.  

A fundamental issue underlies all the discussions: the reasonable expectation to live in a stable, safe, comfortable home, essential for basic human dignity.  

“The right to housing that is affordable is something that we need as a foundation of our society,” Huber says.

Progress so far

Fortunately, there’s work being done.

One small, neighborhood-based project is in Price Hill where Price Hill Will, a nonprofit, community development organization, administers a homesteading program. Price Hill Will obtains a house that may be vacant or in foreclosure, then gets it up to code, fixes the roof, the plumbing or whatever is needed to make it livable. They sell it through a land contract to a low-income family, who makes payments at no interest.

“We make sure the monthly payments are no more than 25 percent of their income,” says Rachel Hastings, Price Hill Will’s executive director. The family usually agrees to a scope of work to continue maintaining the house, and Price Hill Will stays in touch to make sure the family is staying on track with payments. After five years, Price Hill Will transfers ownership to the family.

For Ausel Perez and his wife, Juana, it’s meant being able to own a place big enough for them and their four children. Originally from Guatemala, Perez arrived in Cincinnati some years ago via Atlanta.

“It was hard to find a place to live,” he says in Spanish, translated by his 13-year-old daughter, Elba. He was connected to the program through Santa Maria Community Services, a not-for-profit based in Price Hill.

Price Hill Will's homesteading program has helped more than a dozen families afford their own homes.Price Hill Will has helped 14 families so far through the program, with more in the pipeline. “We’re providing families the opportunity to buy a house, work on it themselves, and build equity,” Hastings says.

A small program, but life-changing for those families.

There’s more going on. Housing Our Future is not just a 30-page report that’s been filed away. It led to the creation of a broad coalition of organizations working in this space, including Community Building Institute, Cincinnati Development Fund, the Cincinnati office of Local Initiatives Support Corp. (LISC), Cincinnati Metropolitan Housing Authority, and many more, including developers, philanthropies, health care organizations, and social service organizations.

The group put together a fourfold strategy: produce new housing; preserve existing housing; protect the most vulnerable; create and change systems. Then it went to work. Since the report was issued in 2020, there has been progress:
  • The Cincinnati Development Fund is the steward of $50 million in commitments to create a regional affordable housing trust fund. Much of the money, $34 million, is coming from a low-interest loan from the U.S. Department of Housing and Urban Development. The rest is from the city of Cincinnati’s American Rescue Plan Act funds, Greater Cincinnati Foundation, and Western & Southern Financial Group.
  • In November, CMHA, the region’s public housing agency, completed the renovation of a nine-story apartment complex in Price Hill that holds nearly 200 apartments. The Pinecrest apartments were the first use by CMHA of a federal program that allows public housing agencies to use more financing tools to rehabilitate and preserve their stock of housing.
  • The Port is buying 194 single-family homes from a Los Angeles-based, for-profit housing firm for $14.5 million, a first-of-its kind move here that should stabilize the homes for renters in the short-term, and possibly lead to homeownership opportunities. For-profit real estate investment firms often buy homes in disinvested neighborhoods and then raise the rents, which can lead to evictions.  The Port’s strategy is meant to protect the long-term affordability of those homes.
  • The Wilkommen project in Over-the-Rhine, which includes the rehab of 16 buildings and four new builds, will include 69 units of housing affordable to people making roughly $30,000 to $60,000 a year, says co-developer 3CDC. In an example of how new, affordable housing often requires subsidies, the financing included 13 different funding sources, including federal and state tax credits, city funding, and conventional borrowing.
  • Community leaders in Avondale broke ground in November for seven new townhomes on Hale Avenue. At prices of $230,000 to $260,000, the homes are not geared to low-income, but to people who have jobs and who may be first-time homebuyers in a neighborhood where most of the residents are renters. They are the first of what is planned to be 24 townhomes.
  • Bon Secours Mercy Health System, partnering with Working in Neighborhoods and Housing Opportunities Made Equal, provided $85,000 in emergency rental assistance and more than $125,000 in foreclosure prevention assistance to homeowners. More than 140 renters and 26 homeowners in Bond Hill and Roselawn received assistance.
  • In 2021, the city of Silverton launched a homeowner assistance program to help low-income homeowners complete external home repairs and address code violations. 
While each of these projects is significant, they are still relatively small compared to the scope of the problem. What’s needed, says Blume, is systemic change. Changes in zoning, tax incentives, public funding, public transportation, and living wages may be needed to create a system in which affordable housing is valued and promoted.

“We’re not going to get more affordable housing unless we’re intentional about it,” she says. “There has to be a public intent to do it.”

Creating a revolving loan fund to help pay for much-needed repairs to existing affordable housing would be another needed change.

That might permit the renovation of what Blume calls the “Cincinnati Fours,” those hundreds, perhaps thousands, of solid, four-unit apartment buildings constructed decades ago, many of which have been allowed to deteriorate over the years.

“Cincinnati was built like that,” she says. “But over the years, we have looked at that as obsolete housing.”

"Cincinnati Fours" on Schwartz Avenue in Cheviot.A loan fund could enable landlords and real estate companies to rehabilitate these apartment buildings, found throughout Cincinnati neighborhoods, into safe, decent housing again.

“They're great, affordable housing,” Blume says. “They already exist. You don't have to rezone anything and they provide cash flow for the owners, which is a good thing.”   

Cincinnati City Council’s recent effort to allow for more density in multi-family developments was an attempt as systemic change, but it was flawed (it was pushed by developers and didn’t touch single-family housing) and it failed.

Voters in 2021 soundly rejected a ballot issue that would have required the city to contribute $50 million a year to an affordable housing fund. City Council has since agreed to contribute a portion of any year-end city budget surplus to the affordable housing trust fund. That contribution is estimated to amount to $1 million to $2.5 million a year.  

A more robust solution is suggested by Joe Cortright, director of a City Observatory, a Portland, Ore.-based think tank that consults on urban economics. For 15 years, Portland has been setting aside a healthy portion of tax-increment financing money for affordable housing.

“You automatically plow money back into affordable housing,” Cortright says.

In fiscal 2019 alone, that policy resulted in more than $400 million spent on housing in Portland neighborhoods.

There’s no single answer to the housing dilemma. It will take a sustained, funded commitment by governments, developers, lenders, community organizations and others over many years. It’s off to a good start.    

You can read earlier articles in The Case for Cities series here.

You can view and listen to The Case for Cities conversation series here.

The Case for Cities: Cities of Choice are Cities of Justice series is a partnership between UC School of Planning and Soapbox Cincinnati, made possible with support from The Carol Ann and Ralph V. Haile, Jr. Foundation.
   
 

Read more articles by David Holthaus.

David Holthaus is an award-winning journalist and a Cincinnati native. When not writing or editing, he's likely to be bicycling, hiking, reading, or watching classic movies.