CLEVELAND — Rent in Cleveland is increasing at higher rates than other metro areas in the country, up 7% compared to this time last year, according to Zillow’s latest market report.
City leaders are now working in partnership with a national non-profit called Local Initiatives Support Corporation (LISC) to launch a $100 million Cleveland Housing Investment Fund (CHIF). The city has invested $18 million, and Key Bank has committed another $20 million.
“We all need housing in some way or another,” Tiffany Durr, Interim President at LISC Fund Management, said. “And housing affordability, as well as housing equity, isn't just for certain populations and certain pockets and certain geographies. It affects all of us.”
LISC Fund Management, which has established funds similar to CHIF in cities like Detroit and Charlotte, will own and manage the money and is working now to fundraise the rest of their $100 million goal for Cleveland.
“Our funds are created to provide below-market financing to support affordable as well as mixed-income housing,” Durr said.
CHIF is expected to finance between 2,500 and 3,000 units of affordable housing, and to provide 100 for-sale homes in historically disinvested communities, so residents there can build wealth.
Detroit, like Cleveland, has some neighborhoods that attract a lot of developers and others that are struggling to stay afloat.
In 2020, LISC launched the $58 million Detroit Housing for the Future Fund (DHFF), which leaders said has helped finance 498 units of affordable housing there. Rob Lockett, Executive Director of LISC’s Detroit Office, said the creation of those units has a ripple effect in struggling neighborhoods.
“When affordable housing is developed in communities, oftentimes, the commercial activity tends to follow,” Lockett said. “Depending on the strategy of what's happening, that creates jobs for the residents that are in those neighborhoods. It also creates an opportunity for individuals to come from different areas and different parts of town to consume products and services in those areas, thus giving those areas a lift, and attracting additional activity to those corridors.”
DHFF funds projects ranging from home or historical building rehabs to new builds, in different parts of the city — something Durr said they hope to do in Cleveland, too.
They are mixed-income or affordable housing options that otherwise might not be profitable for developers, and many of the units are reserved for those making up to 60% of the area’s median income.
“Funds like these and tools like these are much needed to help real estate developers realize the outcomes of their projects,” Lockett said. “But also for the LISC to be able to really execute on our commitment of providing, safe and affordable housing for all.”
Cleveland Mayor Justin Bibb recently traveled to Detroit for a Mayor’s conference, where he also toured some of the facilities funded by DHFF.
In a statement, he said, “It doesn’t matter if you lean left or right, are liberal or conservative, are a Democrat or a Republican, or live in a city or rural environment – one thing that we all can agree on is that housing is the biggest crisis facing our country today. Everyone deserves an affordable place they can call home. Being able to attend the U.S. Conference of Mayor’s housing tour provided a firsthand look at both the most promising local innovations in housing production and creating a housing safety net in Detroit and across the nation. As a similar Rust Belt city, Cleveland faces many of those same circumstances and I hope to infuse some of things we learned with local efforts here like our CHIF we launched just last month. In Cleveland and across the country, there remains great potential to tackle this crisis by removing barriers to production and investing in housing innovation.”