Cincinnati's affordable housing deficit has gotten a lot of attention in recent years — though some housing advocates might say without much in the way of results.
But a new mayor and new Cincinnati City Council members mean a fresh look at the issue. Recent proposals to study changes to the city's zoning, its abatement policies and more suggest there may be changes coming to how Cincinnati handles its housing needs. Cincinnati City Council member Reggie Harris, for example, wants to make it simpler for affordable housing developments to get vital city incentives.
The question is: will these proposals pass council, and can they move the needle in Cincinnati neighborhoods if they do?
Harris joins Cincinnati Edition to talk about these proposals with Local Initiatives Support Corporation of Greater Cincinnati Executive Director Kristen Baker and Over-the-Rhine Community CouncilPresident Maurice Wagoner. Read a full transcript of the discussion below.
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Full transcript:
Lucy May
Reggie, do you mind starting off by explaining this proposal and how it works?
Reggie Harris
Absolutely. So the proposal is essentially streamlining the process for receiving tax abatements for applications that utilize Low Income Housing Tax Credits. As the process stands now, it's a two step process; the developer has to seek a letter of support from the city. And then if that letter of support is granted, and then the developer applies for tax credits and is awarded, they then have to come back to the city to complete the process of receiving the abatement for the project, which is a lengthy process. As it stands right now, when the city offers a letter of support for a development project, they vetted the project, they've gone through feasibility, and so it just makes sense to just do a one stop shop. So you come in, you get the letter of support, and you get the full tax abatement for this low income housing tax credit project. And it does two things. One, it shortens the amount of time it takes to move from award to construction, which means we get to build more units faster. But it also makes our applications more competitive. Because the developer can then list this, what is this sort of, you know, there's revenue and this financial increase on the pro forma so that the application is a stronger application, and then we have a greater chance of getting awarded a tax credits, which we know is a really competitive process.
Lucy May
And Reggie, how do you feel like this will help the affordable housing crisis? Do you feel like this will make local projects more competitive for those for those tax credits?
Reggie Harris
I absolutely do think it'll make us more competitive. And in fact, we have five projects that are currently going before the LIHTC board, if you will, in early February. And so passing this ordinance, and then we're going to seek to pass it with emergency status, will already strengthen five applications, which will be somewhere between I think, 120 and 180 units just in this round if they are awarded. But again, this is just one small piece of a number of steps that we need to take to address the affordable housing crisis and to create the conditions for a robust housing pipeline. So this isn't the singular solution. But it is, I believe, an important step in making sure that as a city, Cincinnati is an attractive city. And Cincinnati has tools and processes that facilitate affordable housing development with ease.
Lucy May
We'll come back to those other proposals that are in the works. Kristen, do you mind helping us get a handle on this whole affordable housing issue? Can you help us understand, for all of us who might not be paying as close attention as all of you are, what is affordable housing? And what kinds of affordable housing will a proposal like this address?
Kristen Baker
Sure, it's a great question. And I think it's something we need to revisit at every, every moment when we're talking about housing in Cincinnati and in Hamilton County, in our region. So simply put, affordable housing means that you are not over extending your budget to cover your housing costs. The guideline is really a 30% of a household's monthly net income should be going towards your housing costs, and if you're going above that 30%, then you're considered cost burdened. And that escalates as the percentage of your income is going towards housing. So when we think about what the median income is for the city of Cincinnati, and so, you know, let's let's just for example, talk about someone making $50,000 a year right? That's a job that is that that we need more wages to reach out in order to really be able to, to have housing affordability be a little bit less of a crisis for us. So it's about wages, and it's about housing price, and it's about how much you are expending on that. That's the simplest way to think about it. I think when we think about affordable housing often is capital A affordable, which is what this specific ordinance is working to address. The Low Income Housing Tax Credit is a tool in the toolkit to help families and residents who have a lower wage, usually a very low low wage, right. We're talking about folks making maybe $15,000 a year, $20,000 a year for their household. How do we help make sure that they have access to housing, because when you think of what 30% of that, that income is, that's not a lot to go towards your rent or your household expenses. So we really need to think about it think in terms of real dollar amounts, you know, how do we make this make sense to folks who are hearing us talk about percentages, and lots of acronyms and letters that are involved in housing, but also, it's really about, you know, making it relatable and understanding that if I'm making $10 or $12, an hour, which is above minimum wage, right, and there are many jobs in our market that are not paying enough to reach the median income sort of goal that we should have as a community for households that that is really a challenge that we need to address. So there are different tools along the way to help with affordable housing, making housing more affordable to households. And then there's also the issue of just real dollars, how much money are folks making? And how do we make those two things line up a little bit better?
Lucy May
And how big is the need? I know there's been a lot of discussion about how many 1000s of units short on affordable housing Greater Cincinnati is, right?
Kristen Baker
Right. So in 2017, we did some research and found that we have about a 40,000 unit gap, which means that there are 40,000 households that are paying well more than 30% of their monthly income on their housing costs, they are considered severely cost burdened, that's up to 80% of their monthly income going towards housing. And again, those are often folks whose income is in those lower ranges. So we are going to update that figure. We know that that's been talked about quite a bit that relies heavily on census data, and the new census data is starting to emerge. So we hope to be able to refresh that figure and understand how we are progressing as a community. Hopefully, we're starting to move in the right direction. And we hope to see more efforts in City Hall to accelerate that improvement. But that's the number that we're thinking about. It's really about 40,000 households that are really crunched, and how do we help bring more tools to support them?
Lucy May
And Maurice, what is this looking like in Over-the-Rhine, people who are familiar with the neighborhood know that years ago, there was a lot of affordable housing in the neighborhood, then there was a huge influx of market rate housing and new development. Where is the balance now in the neighborhood and what's the what's the state of affordable housing there in Over-the-Rhine?
Maurice Wagoner
As everybody pretty much know now and just that the community has been flooded with market rate housing, it's been a great decrease in affordable housing in Over-the-Rhine over the last 10 years. We just had a study done from a student of UC for a housing study recently, and found out that pretty much 60% of affordable housing has gone in Over-the-Rhine as we speak. And it's been flooded by market rate. So right now affordable housing is pretty much over in Over-the-Rhine in our community. There's no space really to even build any affordable housing or anything. We got a permanent housing structure coming up from Over-the-Rhine Community Council that's ready to put about 40 units inside of a permanent housing facility such as Jimmy Heath that we got for the future. But other than that,
Lucy May
I'm sorry is that Over-the-Rhine Community Housing and permanent supportive housing that you're referencing there?
Maurice Wagoner
Correct, yes that's right. And that's for chronically homeless people in facilities for you know, for the mentally ill and you know, in case they got mental issues and things like that, but concerning families itself and families with children, there's very little affordable housing development happening in our community. And we've been fighting for years and years and years about this and it fell on deaf ears and now the community has been pretty much gentrified and over so as far as development is concerned in Over-the-Rhine for affordable housing, it looks bleak for us at this moment.
Lucy May
So do you think this proposal that Reggie talked about and some of the other proposals that are being discussed at City Hall? Could those make a difference for the neighborhood at this point?
Maurice Wagoner
Not for our neighborhood, but probably other neighborhoods in the city of Cincinnati that desperately needs affordable housing. As you quoted, we have about 40,000 units short of affordable units in the city of Cincinnati. But it would pretty much benefit other neighborhoods, with the Low Income Tax Credits and the competition that the developers would have, in order to develop affordable housing in their communities. It will not really be helpful in our communities anymore, because as I've looked at the landscape of our neighborhood, you know, it is not a plot of land available to build affordable housing in Over-the-Rhine right now. I mean, it's very scarce in Over-the-Rhine.
Lucy May
Maurice, we had some technical difficulties, and I believe I cut you off. I had asked you about whether this would make a difference in over the Rhine and you were explaining that. Do you think there's anything that Cincinnati City Council could do or other policymakers could do that could change things in the neighborhood to allow for more affordable housing?
Maurice Wagoner
Anything that they can do to change things for more affordable housing? Well, it appears that they got a good strategy that they are presenting, and the community council and the mayor, you know, they ran off the affordable housing platform. And we voted for them, because we believed that they would produce what they said and what we voted for them to do. So asking, is there any more that they can do? We don't know, you know, the rubber is meeting the road right now and only time can tell. But we do believe in the new mayor. And we do believe in the current Community Council that they will do what's best for the residents of the city of Cincinnati when it comes to affordable housing. They know how we are in dire need of affordable housing in Cincinnati. And we trust that they will hold themselves accountable to presenting what they ran on when it came to affordable housing.
Lucy May
So Reggie let's circle back, you referenced earlier in our interview that this proposal of yours was one of several that city council is considering to address the issue of affordable housing. Can you talk to us a little bit about the other initiatives and proposals that are in the works?
Reggie Harris
Yes, absolutely. So we can first start with Mayor Pureval's motion for a request to study our tax incentives and the use of abatements which closely aligns with councilmember Landsman's motion for review of the tiered system that is used in many cities, which we have we structure our criteria for abatements. Because when we think about homeownership, and the growth of the homeownership plays in affordable housing development is that, you know, Kristin really just gave a beautiful explanation when we talked about cost burden. So it's, it's also about building new units, but it's about freeing up existing units. And so when we have residents that have stable incomes, but maybe not high but stable incomes, and we can work to move those residents that want to own homes to owning homes, then we start to open up units that were occupied that had affordability attached to them. And so with the review of our tax abatement, we can begin to think about incentivizing investment in communities to create a mixed income model because we want to think about a balance of affordability communities, communities and in grocery stores, they need restaurants, they need amenities. Right. In order for that to happen, the average wage has to be able to sustain those businesses. So it's about thinking about affordability options in areas of opportunity, like our Hyde Parks and our Mount Lookouts and our Columbia Tusculums and then it's also about introducing market rate housing into our areas that are needing additional investment thinking about our Avondales and you know, our Price Hills and know certain parts of, of Walnut Hills, etc. So by studying our tax incentives, we can make a very strategic plan to use that tool to increase investment. The other piece is then thinking about our Affordable Housing Trust Fund, and finding a sustainable revenue source for that. I have proposed and we'll move on thinking about using some of our American Rescue Plan Dollars to make a sort of substantial contribution to the housing trust fund so that we have funds to use over the next two years to really advance this conversation, as we're thinking about sustainability. And then the last piece is to think about a project that we're actually working with closely with with LISC, where we're going to do a five year look back at the number of housing units that have been developed in the city, we're going to look at how many units are developed? What were the income brackets for those units? And what neighborhoods? So that we can begin to make a metrics based plan on where we want to go in the next five years? Where do we overperform? Where did we underperform? How do we benchmark against peer cities, cities that are growing rapidly, cities that are sort of shrinking or staying the same? Where do we sit? And then what is a reasonable but bold and ambitious number to choose in terms of like new units? And then how do we use those tools to get there? Right. So thinking about a reversed approach. Thinking about our council term is two years, the mayor's term is four years, I believe that those are really significant steps, given the time frame of our council, to begin to think about increasing affordable housing. And then I would also be remiss to not mention Council Member Keating's density proposal, which again, is a tool that increases affordability, so allowing a developer to build more units, which then brings the cost down. And I know that our office, we will begin to explore parking minimums, and thinking about all of the structural tools we can use to impact the cost of housing so we can bring those rent prices down.
Lucy May
So Kristen, we have a couple minutes left. I know that LISC has done so much important work with Housing Our Future and there's been so much research and study that's gone into this issue. Are those the big things that council can do to move the needle on this problem? I know we've talked about zoning, what are the things that LISC and other community leaders who've been working on this one to see Council do to really put their arms around this issue and then tackle it?
Kristen Baker
Well, it's a great question. And you know, the council member touched on a few really important issues. They're sort of not particularly scintillating things like regulatory issues and some of the processes and procedures that the city needs to improve and can improve to make this a more enabling environment to do more development at multiple income ranges. You know, there's been a lot of talk about how the city has used tax abatements to support projects that might be viewed as more luxury or high end. And we also have to remember, collectively that the city needs to in order to provide the essential services and the functions that the city is responsible for. So I think that it's it's we I think we are in a place where we can stop maybe putting of market rate housing or higher priced housing against affordable it is as the council I've mentioned, this is about us bringing together some tools to create mixed income mixed affordability in all neighborhoods, frankly, in our city. You know, we have a real opportunity to model the kind of community that we want to be and that's a place that has rental and homeownership and has vibrant neighborhood corridors and business districts aligned with transit and the opportunities we have with the passage of Issue Seven to really build transit oriented development opportunities to help people access different parts of the city through our our public transportation system. I think those are things that we're all really excited about. And we also really do value the Affordable Housing Trust Fund that was created years ago and has an opportunity to really invest in these projects. You know, the reality is that affordable housing developers, both nonprofit and for profit, they can't charge a rent that covers the cost of the expensive construction. The city can't control that, construction costs are really, have experienced quite a bit of volatility and have become much higher in the last few years than they have been in the past. So what the city can do is make better use of the tools that they are able to leverage to help make development a little bit easier for our partners and become a place where there's also jobs, right? That's the other part of this is that construction, creates jobs, it creates high quality jobs. And that's the other part of this too, is that I think this council has the opportunity to more tightly align the workforce priorities of the city and the job creating opportunities that exist here with the housing needs to really help increase our overall population and help raise wages for everyone in the community, especially in those lower income brackets. So we are on board with continuing to bring forward ideas and tools and Housing Our Future talks about producing more units, which we've talked about today, about preserving those existing affordable housing units with our aging housing stock, homeownership opportunities, particularly for our Black neighbors, and how do we make sure we're really lifting that up as a strategy to support wealth creation, and then protecting vulnerable neighbors which we heard you know, Maurice talk about a little bit in the project that's happening is an example in Over-the-Rhine. So we really want to influence all of that.
Lucy May
That's a terrific place to stop. I want to thank our guests Cincinnati City Council Member Reggie Harris, LISC of Greater Cincinnati Executive Director Kristen Baker, and Over-the-Rhine Community Council President Maurice Wagner, thank you especially for dealing with our technical difficulties.