Explaining Issue 3, The Affordable Housing Charter Amendment On The May Ballot
Cincinnati voters will see three charter amendments on the ballot in May's election, including one brought by petitions from housing advocates. Issue 3 would require the city to put $50 million a year into an Affordable Housing Trust Fund.
Proponents say the city has long ignored a growing housing crisis and drastic measures are necessary. Opponents say it would decimate the city budget and require hundreds of layoffs.
The measure has already been to court, with a legal fight over the summary language that will appear on the ballot. The City Solicitor says if the amendment passes, he will immediately go back to court to seek guidance on whether it violates state law.
WVXU spoke with Josh Spring, executive director of the Greater Cincinnati Homeless Coalition and one of the petitioners, and City Solicitor Andrew Garth to answer questions about the proposal.
LISTEN: Proposed Affordable Housing Charter Amendment On The Ballot And Up For Debate
What Would The Amendment Do?
The amendment makes a permanent change to the city charter requiring a minimum contribution of $50 million a year into a new Affordable Housing Trust Fund (AHTF) restricted for affordable housing uses.
It also creates a new volunteer board that will set guidelines and policies for the trust fund. Most members will be nominated by various community organizations, with two nominated by the president pro tem of City Council. Council does not have discretion to approve or reject the nominations. The board will have the authority to approve or reject development contracts that would receive funding from the AHTF.
Is This A New Fund?
The city does have an existing Affordable Housing Trust Fund, but the charter amendment on the ballot specifies the creation of a new fund governed by a new board. The current fund has about $1.5 million, which the city could transfer to the new fund.
What Is "Affordable" Housing?
The amendment uses the most common definition of "affordable," from the U.S. Department of Housing and Urban Development: that a household should not pay more than 30% of income on housing costs.
The amendment also uses the Median Household Income (MHI) to determine income eligibility. This number comes from the U.S. Census Bureau American Community Survey. For 2015-2019, the most recent year data is available, MHI for Hamilton County was $57,212.
The amendment specifies "affordable housing" as units that are affordable to 60% MHI (about $34,327 a year) and below.
Notably, the MHI for the city of Cincinnati is lower: $40,640. If that standard were used, the incomes would be $24,384 (60%) and $12,192 (30%).
READ: Where 2021 Mayoral Candidates Stand On The Affordable Housing Charter Amendment & More
Why $50 Million A Year?
Advocates estimate the city needs 28,000 additional affordable units. That number is somewhat disputed, although there's general agreement that the city has a significant shortage.
The petitioners say $50 million a year would create 500 units annually, either new or refurbished. At this rate, it would take 10 years to have 14,000 more affordable units. But advocates say they believe it won't take that long because the fund will incentivize more investment with outside funding sources.
When Would It Go Into Effect?
If passed, the amendment is effective immediately and applies to the first city budget after passage. The fiscal year 2022 budget begins July 1, and City Council must approve that budget no later than June 30.
How Could The Funds Be Used?
The amendment lists four general purposes for the funding:
- To increase resources available for affordable housing and neighborhood stabilization;
- To create and preserve affordable and accessible housing to meet the needs of families, households, and individuals with low incomes in the city;
- To provide housing investment to prevent displacement and the loss of affordable housing in neighborhoods; and
- To leverage additional outside resources for the betterment of housing affordable to households with low incomes in the city.
The amendment later specifies the funds can be allocated "to new construction, renovation of vacant property, renovation of existing affordable units for the purpose of ensuring their sustainability, operation costs of affordable housing and direct services."
No more than 5% of funds can be used for administration.
The newly established board would review applications for funding from developers seeking to build new units and/or refurbish existing structures into new units. The board would have the power to approve or deny contracts that would receive money from this fund. Those contracts would also need approval from City Council if they included other government resources like tax incentives.
The entire fund is restricted to supporting housing that is affordable to households at or below 60% of the Median Household Income (MHI) for Hamilton County, which is $57,212 (for 2015-2019).
Half of the fund is further restricted to supporting housing that is affordable to households at or below 30% of MHI.
Median Household Income (2015-2019): $57,212
- 60% MHI: $34,327
- 30% MHI: $17,164
Would The Housing Be Income-restricted, Or Just Affordable To Low-income Persons?
Josh Spring says that would be up to the new board, which will establish the specific regulations for using the funds. City Solicitor Andrew Garth says his understanding of the language as written would require income-restrictions, meaning residents would have to prove their income makes them eligible for the units.
RELATED: Affordable Housing Charter Amendment Language Rewritten Per Ohio Supreme Court Ruling
How Would The City Pay For It?
The charter amendment lists four potential sources:
1. Revenue from the lease or sale of the Cincinnati Southern Railway.
City officials say using this revenue for affordable housing is expressly prohibited by state law. The city cited this law in court documents defending the re-written ballot summary:
"Section 15149 of the Ohio General Code, known as the Ferguson Act, clearly states, in relevant part: [A]ll net earnings and incomes [from the Cincinnati Southern Railway lease] shall be paid into the treasury of said city to the credit of the sinking fund or bond retirement fund; and in the case of the sale or final disposition of said railroad, the purchase money or price shall be paid into the treasury of said city to the credit of the sinking fund or bond retirement fund and shall be applied to the reduction of the bonded debt of said city until the same shall be extinguished, due regard being had to the priority right of any issue or issues of bonds to the proceeds of such sale."
2. A fee for developers of some residential projects and all commercial or non-residential projects.
The City Manager says this type of fee would likely be challenged as an unconstitutional tax under Ohio law.
3. A personal income tax on the award of stock options in publicly traded companies.
City officials say Ohio law prohibits the city from establishing a new tax on stock options. According to court documents: "The City did not tax stock options as of and before January 1, 2016. Because the Ohio General Assembly expressly prohibits municipal corporations from enacting stock option taxes, the City cannot now amend its municipal code to tax stock options."
4. The city's general operating or capital funds: $50 million represents about 13% of the general fund. City officials say this is where the $50 million would have to come from.
Advocates say city officials often find funding in the budget for priority projects, and the threats of layoffs are "fear mongering" to encourage Cincinnatians to vote no.
The amendment also specifies the city can deposit funding from state or federal grants into the fund, but that cannot count toward the $50 million obligation from the city. Any funds left in the fund at the end of each fiscal year will carry over to the next, but carryover funds also do not count toward the annual $50 million.
How Would It Impact The City Budget?
City officials say it would require catastrophic reductions in basic city services, as well as eliminate several entire departments:
- Department of Economic Inclusion
- Office of Performance & Data Analytics
- Office of Human Relations
- City Planning
- Aging and Accessibility
- Office of Environment and Sustainability
The city's budget adjustment plan includes the following layoffs:
- 75 current police officers (as well as eliminating an upcoming recruit class of 50 members)
- 45 current fire officers
- 40 current public services employees
- 20 recreation commission employees
- 14 full-time park board employees & all part-time maintenance employees
The plan would also eliminate funding for dozens of community programs, including the entire Human Services Fund administered by United Way ($5,980,060). Other program cuts include:
- 3CDC (for Fountain Square): $200,000
- 3CDC (operating support for Washington Park and Ziegler Park): $375,000
- Invest in Neighborhoods: $50,000
- Keep Cincinnati Beautiful: $475,000
- Summer Youth Jobs Initiative: $250,000
- African American Chamber of Commerce: $325,000
- The Port: $700,000
- Bethany House: $100,000
- Center for Closing the Health Gap: $750,000
- Eviction Prevention Initiatives: $250,000
- Needle exchange program: $150,000
See a full report on the budget impact below (story continues after):
Impact of $50 Million General Fund Reduction by WVXU News on Scribd
Who Would Be Eligible To Serve On The Oversight Board?
The 11-member board will be composed of city residents under the following categories:
- A developer of affordable housing or who is an affordable or fair housing professional to be nominated by the board of Housing Opportunities Made Equal of Greater Cincinnati Inc.
- A representative of a community development corporation who is also a resident of its neighborhood or service area, to be nominated by Homebase Cincinnati.
- A representative from a local charitable foundation serving city residents with low incomes, to be nominated by the president pro tem.
- A representative from a social service organization to be nominated by the Greater Cincinnati Coalition for the Homeless.
- A representative of an affordable housing advocacy organization to be nominated by Cincinnatians for Affordable Housing Inc.
- Two current renters who qualify for low-income housing assistance, one nominated by the Greater Cincinnati Coalition for the Homeless and one nominated by the president pro tem.
- A homeowner whose income does not exceed 100% of Poverty Guidelines, nominated by Cincinnatians for Affordable Housing, Inc.
- A representative of a homeless advocacy organization to be nominated by the Greater Cincinnati Coalition for the Homeless, Inc.
- An attorney admitted to practice law in the state of Ohio to be nominated by Cincinnatians for Affordable Housing, Inc.
- A person who has experienced homelessness to be nominated by the Greater Cincinnati Coalition for the Homeless, Inc.
The president pro tem will nominate two members.
The board of Housing Opportunities Made Equal of Greater Cincinnati Inc. will nominate one member.
Homebase Cincinnati will nominate one member.
The Greater Cincinnati Coalition for the Homeless will nominate four members.
Cincinnatians for Affordable Housing will nominate three members.
City Council would not have discretion over the nominations; they must appoint each nominee. Solicitor Andrew Garth says council has discretion over other oversight boards, and this one would be unique in that.
Garth says he has concerns about an unelected board having the level of authority prescribed in the charter amendment. He says if the amendment passes, the city will seek a court ruling on whether or not the oversight board is legal.
RELATED: Cincinnati Officials Denounce Charter Amendment To Spend $50M On Affordable Housing
Why Make A Permanent Change To The Charter?
Advocates say they've taken this issue to the people because elected officials haven't taken it seriously and don't understand the urgency. Spring says when the housing crisis is resolved, it will be apparent to the community and residents can repeal the measure with another charter amendment on the ballot.
If Passed, How Could The Amendment Be Changed?
A charter amendment approved by voters can only be changed with another charter amendment approved by voters. That means City Council cannot simply pass an ordinance removing the city's obligation to pay $50 million a year.
However, City Council could put a repeal on the November ballot for another vote. Voter turnout in primary elections is typically very low, and officials could be hopeful that a higher turnout would have a different result.
Full text of the charter amendment:
Full Text Issue 3: Affordable Housing Charter Amendment by WVXU News on Scribd
Hamilton Co. May 2021 Election: Sample Ballot by WVXU News on Scribd