Cincinnati's Affordable Housing Trust Fund Has Thousands. It Needs Millions

Oct 30, 2019
Originally published on October 31, 2019 4:46 pm

Forty-thousand families in Hamilton County can't find a place to rent or own that is affordable. That's according to the Housing Affordability in Hamilton County study.

Housing advocates have been demanding public officials fund more affordable housing and stop displacement.

"If you think about your own family and your own household, where you live is sort of your first priority. Once you do that you can deal with all the other stuff," says Liz Blume, head of Xavier's Community Building Institute.

The U.S. Department of Housing and Urban Development says only 30% of income should be spent on housing - anything more is deemed unaffordable. In Hamilton County, some people spend 50-75% of their income to keep a roof over their heads, according to the Local Initiatives Support Corporation, also known as LISC.

"There's a misconception in Cincinnati that this is an affordable housing market," Blume says. "We hear it all the time - 'We're not Boston; we're not San Francisco. How can we have an affordability problem? This is an affordable market.' It is an affordable market if you have money. It is not an affordable market if you don't."

Xavier, LISC, housing advocates, The Greater Cincinnati Foundation and other organizations are studying how the county and city can get to the bottom of this.

How The Gap Began

Kathy Schwab is director of LISC. She says some suburbs have bounced back from the recession, but the city's old housing stock took a harder hit. "A lot of our home ownership has flipped to rentals and those rentals are a lot higher than they were 10 years ago," she says.

In 1938, funding from President Franklin D. Roosevelt's New Deal created Laurel Homes, the city's first public housing in the West End. According to Cincinnati Museum Center, only 30% of 1,039 units were available to African Americans despite the city's rising black population.

Former University of Cincinnati Historian Fritz Casey-Leininger says this is when the gap between supply and demand begin. "The problem was there was lots of resistance in the white population to building public housing especially for black (people)," he says.

Over time, stagnant wages and redlining limited African Americans from moving to neighborhoods with better living conditions.

In the 1990s, Cincinnati Metropolitan Housing Authority demolished the Laurel Homes and Lincoln Court to build a mixed-income development known as City West. Casey-Leininger says the new project created less units than the projects it replaced.

Casey-Leininger sees the city's history coming full circle in current debates about funding affordable housing.

A Worsening Problem

LISC and Xavier's 2017 housing affordability study shows the gap is widening, mainly because construction costs are rising while wages are stagnant. "People used to think that the way toward economic self-sufficiency was to get a job, and if you had a job everything would be fine," Blume says. "Well, everybody has a job, and things are not fine." 

The National Low-Income Housing Coalition says in Hamilton County a household must earn $17 dollars an hour to pay for a two-bedroom apartment without it being unaffordable. In other words, a renter making minimum wage would need to work two jobs to afford a two-bedroom apartment.

"If you take 100 households in Hamilton County making less than $15,000 a year, only 28 of them can find a unit they can afford at less than 30% of their income," Blume says.

It's even trickier if you need to be near a grocery store or public transportation. Cheaper cost of living areas are currently off-limits to residents who don't have a car. SORTA's ballot measure to increase the frequency and expansion of bus routes could help.

But Blume says it won't magically solve the issue.

"And it isn't well, produce 40,000 units. I think it's lots of different things. It's modification in zoning, improved transportation, increases in wages; it's producing more units, it's providing better code enforcement so the units we have are in better shape," she says.

If you're making $65,000 to $100,000 a year, you can get a bang for your buck in Hamilton County, but that doesn't mean you're not impacted. 

"In another environment we're talking about the county's economic development strategy," Blume says. "We now can't fill skilled jobs. We need to grow our own talent. If your neighbors can't take care of their home property your property value suffers."

According to the Housing Affordability in Hamilton County study, the number of families in Hamilton County living in poverty grew 40% between 2000 and 2014.

A Possible Fix

So how does it get fixed? Private investments or government dollars.

Casey-Leininger says residents have tossed this question around since the first housing projects were built. "Much of the discussion lacks an understanding of this history," he says. "I think it still boils down to there is a real resistance to spending tax dollars to subsidize the building of affordable housing for low- and moderate-income people."

"There is not enough resources," Blume echoes. "The hard decision about that is there's no new money coming from anybody else. So that means we are going to have to change our priorities. Things that are getting funded now are going to have to not get funded so there's more room to fund affordable housing."

Various stakeholders are preparing a comprehensive study that will evaluate what changes are necessary to improve affordable housing. Some of the areas they're evaluating are homelessness, eviction, preservation, zoning and policy, path to homeownership and new construction.

Schwab says housing advocates already proposed one of the core recommendations. "There needs to be a pool of funds for affordable housing," she says.

Last November, every member on City Council supported creating an affordable housing trust fund. A 7% tax on short-term rentals was originally designated for the fund, but later the money was rerouted.

City officials confirm that council is using $611,000 from the general fund for affordable housing, which is the revenue estimate for the short-term rental tax. The money in the general fund must be spent after a few years, while any money in the trust fund can sit indefinitely.

Two city officials confirm the fund currently has $1,300 from a private donation.

Blume says it needs millions.  

'We Can't Keep Moving People'

Cities across the nation, including Ohio neighbor Columbus, face similar challenges. Columbus in Franklin County uses its trust fund's $100 million to lend money for affordable housing projects in the area. The fund was established 20 years ago and is funded through private dollars.

HUD was a major funder of public housing throughout the nation, but as those dollars dwindle, now it's on local governments to step in. But Blume says that isn't a bad thing. She says local officials need to put better systems and resources in place to fund housing through the private sector.

"We can't keep moving people from place to place who can't afford to live in nice neighborhoods," Blume says.

The comprehensive housing strategy will be released at the beginning of 2020.

An earlier version of this article misidentified LISC as Local Institute Support Coporation. There name is Local Initiatives Support Coporation.  

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