By Marc Lefkowitz
The way Ohio
City Near West (OCNW) executive director Joe Mazzola sees it,
the influx of high-end condos and town homes ranging from $300 -
$700,000 in Ohio City is a dream. Middle- to upper-income suburbanites
and empty nesters flocking here to snatch up the new units—keep
Luxury townhomes at W. 32nd & Clifton
Lest we forget the brisk market for older homes—in
some cases tiny worker cottages no larger than 1200 square feet—where
boho urbanites are spending tens of thousands of dollars on upgrades
and rehabs. From where Mazzola sits, it’s exactly what this
long downtrodden, Near West side neighborhood needs.
“There was a time not too long ago when you
couldn’t give real estate away in Ohio City,“ Mazzola
says. “Now, there are people who worry about half-million
dollar condos interspersed with modest homes.
"I see people coming back to the city and buying
these homes and I say, ‘God bless ‘em.’”
Luxury homes in Ohio City are
one of the city’s bright success stories. It’s also
a nightmare in the making for some long-time Ohio City residents
who have worked for decades to create a “sustainable, economically
diverse neighborhood,” in the words of one. The polarization
between the two sides strikes some as reminiscent of our Red versus
Blue political landscape.
But, new housing starts and quickly rising resale
valuations in Ohio City alone are not the problem, affordable housing
advocates say. Rather, it’s OCNW’s recent change in
policy—removing an historic emphasis on affordable housing
from its mission statement—that has them worried, and wondering
if Ohio City will go from runaway success to runaway train.
“It’s painful to me,” says Mike
Fiala, who has lived in Ohio City for 20 years and serves on a number
of boards, including OCNW’s. “Historically, a CDC’s
mission is to redevelop its neighborhood.
“Investment in lower income people is one of
best investments a CDC can make,” he adds. “It happened
in my neighborhood. [CDCs] did a range of things, including fee
simple purchases. People get stabilized in their housing, which
helps develop job stability. It’s the foundation.”
Fiala has helped housing advocates launch programs
and cement deals with the local community development groups to
ensure that people of modest means can afford to live and work in
Ohio City. Yet he is quick to note the stabilizing force that residents
with higher incomes can bring to a neighborhood like Ohio City.
“I like the changes in my neighborhood,”
Fiala says. “Some things on my street used to scare the daylights
out of me…I also know people who have lived on the streets
and they’re good people, too. The crucial question is whether
one believes in sustainable economic diversity.”
By most indications, the market’s answer has
been, no, thanks. In the last decade, the sparkling redevelopment
of Ohio City’s main commercial district at W. 25th and Lorain
Avenue (funded predominantly with public money) led to private reinvestment
in the storefront businesses and in neglected Victorian homes nearby.
In turn, that jump started the speculative market of luxury housing.
The adaptive reuse of the Fries & Schuele department store at
W. 25th and a half-dozen new apartment and town home developments
underway along Clinton and Franklin are either catalytic or signs
of Ohio City’s gentrification, depending on whom you ask.
Either way, when the majority of OCNW’s board
voted to remove the emphasis on affordable housing this fall, it
caused a stir. The move challenged perceptions that CDCs are the
so-called 'developers of last resort'—building in neighborhoods
where no bank or private developer dared. Yet, here was Ohio City
admitting that it’s no longer in such desperate straits, prompting
a new confidence and direction for OCNW.
Riverview looms over a rejuvenated W.
“The low income housing component is here forever
in [Cuyahoga Metropolitan
Housing Authority developments] Riverview and Lakeview,”
Mazzola says. “It seems like it would take a long time, if
ever, before we’re dealing with a limited market.
“We’re still seeing a significant number
of homes bought for under $100,000, and yet I hear it’s hard
to find an affordable home in Ohio City? If anything, higher income
individuals are underrepresented. They raise everyone’s property
values and when that happens, people who were losing are now making
Ultimately, it appears that OCNW is turning a corner,
or perhaps they, like many CDCs around town, are opting out of the
business of developing affordable housing for other reasons.
“I think CDCs could provide more value to those
in need by focusing on economic development,” Mazzola says.
“When an establishment opens up here, more jobs become available.
They may not be steel jobs, but maybe it helps get people out of
In reality, most CDCs don’t have an affordable
housing emphasis in their charter, says Meg Slifcak, assistant director
Community Development Organization. More importantly, they don’t
have the resources to be in the business of developing affordable
“You need infrastructure to do it,” says
Slifcak. “In the last three years, organizations have not
been taking it on because it’s not generating income and they
end up subsidizing it.”
Detroit-Shoreway may be the exception: It’s
one of the few CDCs in Cleveland with three property managers and
three maintenance staffers to oversee its portfolio of 300 (and
growing) affordable housing units. Slifcak says that CDCs are struggling
to meet the huge demand for affordable housing. Hurdles include
available land, two to three year turnaround time for projects,
limited staff and financing.
All told, costs overshadow lack of staff or will for
CDCs, says Phil Star, Director of Cleveland State University’s
for Neighborhood Development.
“The difficulty is being able to acquire units
that are not in good shape at a decent price so that, at the end,
the rehab costs are not too high,” he says “If you have
to spend $60,000 on a unit in Ohio City, you’re not going
to be able to do it. It’s about resources and having appropriate
Affordable housing begins and ends with the federal
government’s Low Income Housing Tax Credit (LITC). Ohio receives
$22 million in credits during a 10-year period, which generates
$220 million in housing or some 40 to 50 projects, according to
Slifcak. LITC covers about 60 percent of development; the rest is
paid with bank debt and ‘soft debt’ (federal dollars
that the city uses to offer forgivable second mortgages).
In Ohio City, a boom in the private market has made
acquisition costs and the environment for affordable housing much
“Some would say as long as Riverview and Lakeview
Terrace are here, that you’ll never have a problem,”
Fiala says. “I would say they present unique qualities because
of their density, but I tend to focus on what’s happening
in the neighborhood.”
In the neighborhood north of Lorain and east of W.
45th Street, Fiala says, steadily rising median home valuations
are already in the range of $150-175,000. Stability from the influx
of middle-income residents is the benefit of private market investment.
But, it has some worried that rising property values are leading
to higher taxes, which is disproportionately affecting those living
in homes without tax abatements. Mazzola counters that a $10,000
rise in property value equals a $16 a month increase in taxes, and
that isn’t enough to offset the gains in equity for long-time
Still, the relative stability is spurring policy makers
such as Cleveland councilmen Mike Dolan and Matt Zone to introduce
legislation that calls for a reduction in property tax abatements
across the city.
Mazzola agrees that reducing tax abatement may be
coming, but adds, “it’s not the overriding issue. This
is a poor city. Think about what it would be like without the 10,000
units of tax-abated properties that were built. The last thing the
city wants to do is give up the taxes [but] that’s how desperate
Cleveland is for investment.”
Meanwhile, organizations formed to bridge the gap
between the private market and affordable housing are at a crossroads.
Some of these came into being after long-time residents of Ohio
City witnessed slum landlords (and juvenile delinquents) torch their
boarded-up buildings in the 1970s, which spurred them to get active
in the neighborhood.
Or, they came about when the area’s community
development corporations Near West Housing Corporation, Stride for
Pride and West Side Development Corporation merged. Out of the tumult
emerged OCNW, which birthed two affordable housing groups—the
West Side Rental Housing Collaborative and, more recently, The
Cuyahoga Community Land Trust.
A group of housing advocates in Ohio City, including
board members of OCNW, formed The Cuyahoga Community Land Trust
in 2000. The basic premise is anyone below 80 percent of the area’s
median income can purchase a land trust home, but the trust maintains
ownership of the land in order to keep the resale price from skyrocketing.
The organization has an agreement with OCNW to produce
10 homes, but to date only three have been completed, with a fourth
in the works. With the private market booming, though, it appears
that OCNW’s desire to produce land trust homes in Ohio City
“We’re in a situation where we’re
probably not going to do a lot more with OCNW,” land trust
director Marge Misak acknowledges. “It becomes harder to create
the affordable units when prices are taking off.”
Misak, a former OCNW board member, says the change
in the organization’s mission is a complete about-face from
the goals stated in its Strategic Plan for 2001-2004.
“OCNW acknowledged that the market was very
strong and so market rate housing, especially on scattered sites,
was being taken care of by the market. So, it made sense that their
efforts should be on affordable housing and, specifically, on land
Of the two prime directives for CDCs—serving
underprivileged communities and creating economic opportunity –
Misak says the former will suffer from OCNW’s new direction.
“We have scarce resources in the city and the
federal government is not helping," she says. "Those resources
should be made available and remain available by creating permanent,
housing at the Clinton Building
At the same time, the demand for affordable housing
has not slackened. According to a 2002 study conducted by Cleveland
State University’s Levin College of Urban Affairs, 3,800 people
are chronically homeless in Cuyahoga County, and another 28,000
to 30,000 are living on the fringe of homelessness or are ‘doubling
up’ (living with others). The study also found that only 500
to 1000 units of housing are created per year in the city.
While the supply of affordable housing in Ohio City
apparently has reached its peak—with no new projects coming
into the pipeline other than a renewal of two LITC projects (the
Miller Building and the Clinton Building)— it is a priority
in Detroit-Shoreway, says Slifcak. In addition to the $10 million
Gordon Square project, the CDC is involved in conversions of at
least four other affordable housing developments. It does have one
joint venture in the pipeline with OCNW—a senior home at W.
32nd & Franklin that has 27 affordable and 13 market rate units.
Also on tap for Detroit-Shoreway are consulting gigs
for nearby land-rich CDCs, such as Stockyards and Clark-Metro, and
large nonprofits such as Eden, which provides affordable housing
for the mentally disabled. Detroit-Shoreway is partnering with Eden
and Cleveland Housing Network in a deal for a 50-unit permanent
affordable housing project at W. 78th & Madison.
“It’s monumental that these two agencies
are working together on a project of transformational scale,”
Slifcak says. “We have Councilman Zone to thank for this because
he led an unbelievable public process to get it done.”
Meanwhile in Ohio City, success is not assured, Mazzola
says, even with the luxury condos piercing the skyline. “[Cleveland]
is a no-growth market. There’s a little bit of money out there
and we’re competing with everyone for it. How do we put ourselves
on a competitive advantage? We open the doors as wide as possible
to appropriate development.”