Cranley Pushing Council To Quickly Fund Affordable Housing Loan Pool With Stimulus
It could be months or years before money in a new Cincinnati loan fund is distributed to developers working on affordable housing. City officials are still applying for the $34 million U.S. from Housing and Urban Development that will provide the bulk of the loan pool.
The Cincinnati Development Fund, a nonprofit lending group, will administer the loans. President Joe Huber says the more affordable a development is, the longer it takes to finalize.
"Even in financing market rate development, our deals can sometimes take two years to come together," Huber said. "But we are going to get the money out on the street as quickly as possible."
The HUD Section 108 funding the city is applying for will be distributed as low-interest loans to developers. As the loans are paid back, the money can be loaned out again for new projects. The maximum loan from Section 108 funding is 20 years.
Section 108 regulations require at least 51% of the "beneficiaries" of the funding be low- or moderate-income persons; in other words, residents making between 50% and 80% of Area Median Income (AMI).
The most recent available data indicates Cincinnati is missing about 19,000 units affordable to extremely low-income renters, who make 30% AMI or less.
A new Housing Advisory Board, with members appointed by Mayor John Cranley, will determine policy priorities for the city, as well as any additional qualifications for the loans – like requirements to include units affordable to lower income levels.
City administration also plans to offer cash grants to incentivize affordable housing projects, but only has about a million and a half dollars available for that. Officials will try to raise at least $30 million from the private sector.
Cincinnati officials are eager to make progress on affordable housing solutions ahead of Election Day next week, when voters will decide whether to require the city to spend $50 million a year on affordable housing.
Mayor Cranley is pushing council to quickly approve the use of federal stimulus.
"The loan, which is a complicated transaction with the federal government, we don’t control the federal government's timeline," Cranley said Wednesday. "But the cash that we're getting in a couple weeks can be deployed this summer."
The city is expecting about $291 million from the American Rescue Plan Act (ARPA).
Cranley has proposed putting $5 million into the existing Affordable Housing Trust Fund. Council Members David Mann and Jan-Michele Lemon Kearney have proposed putting $50 million in the fund.
Council has ultimate approval over use of funds, and the federal government still hasn't released guidance on how it can be spent.
If Issue 3 passes, ARPA money deposited into the fund would not count toward the city's annual $50 million obligation.
Mann, chair of the Budget and Finance Committee, says council should know the results of Issue 3 before deciding how much stimulus to use for housing.