By Bruce Checefsky

An overwhelming number of vacant and abandoned properties in the city of Cleveland from decades of mortgage foreclosures, delinquent taxes, and people walking away has created a dramatic rise in properties acquired by in- and out-of-state investors buying single-family homes. The result of this rise in investor-ownership is a housing submarket that is largely rental and no longer controlled by locals, with limited opportunities for new homeowners and the associated benefits of stability, health, and wealth building. Local government is left to handle the resulting blight of an overwhelming number of vacant and abandoned properties. Lack of access to credit in low and moderate-income areas magnifies the problem.

Sally Martin, Director of Building and Housing for the City of Cleveland, addressed the issue at a recent Ohio Fair Lending Coalition and Cleveland State University Levin College of Urban Affairs forum, How Should ARPA Funds Address Housing Issues in Cleveland? Housing experts on the panel included Kevin Nowak (CHN Housing Network), Antoinette Smith, Empowering and Strengthening Ohio’s People (ESOP), Zach Germaniuk (Slavic Village Development), Chris Knestrick, Northeast Ohio Coalition for the Homeless (NEOCH), and Ed Stockhausen, Cleveland Neighborhood Progress (CNP).

In 2021, the city of Cleveland received the eighth largest allocation of American Rescue Plan & Recovery Act (ARPA) funds, totaling $512 million over two years, with half of the funds received in fall 2021. The remaining balance is available for spending. The Building and Housing Department is seeking $50 million to incentivize housing and home repairs and create a revolving loan pool for small and minority contractors to build in underserved neighborhoods.

While reviewing the Center for Economic Recovery’s Process Overview, part of Mayor Bibb’s Rescue & Transformation Plan, Martin said there were several progressive stages in assessing applications for ARPA funding. The stages include developing a strategic framework to prioritize the funds, assessing and evaluating Center recommendations, strength proposals with input from the Center, reviewing legal ramifications, and reconciliation with City Council. The Center for Economic Recovery consists of eleven members from the Bibb administration—all chief officer and director level positions— and Brad Whitehead, Senior Fellow at Brookings Institute.

Evaluation criteria for ARPA funding include strategic alignment, measurable outcomes, racial equity & inclusion, community impact, global competitiveness, financial leverage, longevity, and environmental sustainability. The desired outcome, according to Martin, would be the development of 1,500 affordable housing units and 1,650 market-rate housing units. “We desperately need to fund housing development in southeast Cleveland,” said Martin. “We hope to leverage this money to entice developers.”

Kevin Nowak, executive director, CHN Housing Partner and CEO of CHN Housing Capitol, proposed three criteria for ARPA spending supporting Bibb administration housing incentives, including home ownership. Nowak said the best way for families to build wealth and for communities to stabilize and thrive is through home ownership, and efforts must be citywide, accessible, scaled, collaborative, and equitable. “We have to build upon the significant investments the city and county have made during the pandemic,” he said. “Access to the capital for developers to engage in acquisition rehabilitation on a much larger scale is needed. We need a holistic approach to housing. Purchase mortgages, down payment assistance, and home repair resources can lead to more home ownership.”

Antoinette Smith, a director at Empowering and Strengthening Ohio’s People (ESOP), said housing transition assistance is missing from the city-sponsored ARPA plan. As Director of Housing and Council, Smith said Market-rate housing rents are unaffordable for most seniors seeking housing assistance through ESOP. There is no senior housing available. The holistic approach is confusing for most seniors, with few resources for people caught in the complex, layered approach to financing. “We receive at least thirty calls a day asking for utility assistance alone,” she said. “Defaulting on utilities can lead to foreclosure.” Smith added that real estate investors outbid seniors looking to purchase a home. Rental and utility assistance and property tax assistance programs are underfunded. ARPA dollars should help with multiple problems, not just as a remedy for a single housing issue.

Zach Germaniuk, Director of Neighborhood Stabilization, at Slavic Village Development, explained that the Slavic Village neighborhood mirrors the population of Cleveland. What happens there happens throughout the city. Working with housing insecurity, as he does almost daily as a housing advocate, Germaniuk emphasized the importance of providing the necessary wrap-around services for households struggling with multiple housing issues. “Money is available to low and moderate-income homeowners for renovations. It does not necessarily have to be access to capital, but access to insurance is a barrier. Contractors will not work on a house without a homeowners insurance policy,” he said. “While many people have a roof over their head, support systems to help them keep it are not there.” Germaniuk encouraged the Center for Economic Recovery to proactively address tenant and landlord issues through early intervention between a landlord and tenant. With additional support, tenants can effectively assert their rights before eviction occurs.

“Housing is a human right,” said Chris Knestrick, Executive Director of the Northeast Ohio Coalition for the Homeless. “Over 90% of the people entering our homeless shelter are people of Color. We need to spend ARPA money to research how much wealth was lost by communities of Color, either through racist housing policy and land theft, and make reparations to them.” Knestrick added that empowering renters and enforcing fair housing with ARPA funding could go a long way to support city residents, whether homeless or not. With an abundance of poor housing stock in Cleveland, people live in condemned homes. Resources to relocate them are lacking. “We need emergency assistance for people to relocate out of these buildings more than we need more code inspections,” he said.

The final panelist was Ed Stockhausen, Senior Vice President of Advocacy & External Relations, and Cleveland Neighborhood Progress. With investments in housing high in the city, despite redlining, racist housing policies, and predatory lending, which has stolen wealth and held back Cleveland, he cited ARPA funding as a way to level the playing field. Gap financing and preservation of existing affordable housing top his list of recommendations. Down payment assistance will increase the number of homeowners and residents, and home repairs will follow, according to him. “Lower interest rates might encourage more home repairs,” said Stockhausen. “Add lines of credit to minority business owners to grow their businesses. It will strengthen our neighborhoods. We need to renovate old storefronts and invest in entrepreneurs. We should invest in the quality of life, from our recreation centers to multipurpose bike lanes. We want people to stay when they visit us.”

A portion of this article first appeared in the Plain Press.