CLEVELAND HEIGHTS, Ohio — A long-proposed “assessment deficit” funding assistance program for infill housing in the city’s Caledonia neighborhood remains a topic of further discussion, both in council and at meetings. of the American Rescue Plan Act (ARPA).
“I truly believe the majority of the city council is in favor, and I trust them to do the right thing,” said the Reverend Jimmie Hicks, executive director of Start Right Community Development Corp.
But regarding ARPA’s community engagement meetings on how to spend about $10 million remaining in the city’s $38.8 million federal allocation for coronavirus relief, Hicks said. that he wasn’t sure most people even knew what the term “valuation gap” meant, in terms of asking for funding on the city community feedback survey.
“We originally requested down payment assistance of $15,000 to help individual home buyers who wanted to build in Caledonia,” Hicks said Sept. 20 after the council debated the legislation, which is still standing for a second reading since its presentation by Mayor Kahlil Seren in June.
After the council recess in July, Seren suggested that the draft ordinance creating the transformed “valuation gap program” be filed until the end of the new ARPA Community Engagement meetings.
The city held its third meeting on Sept. 21, and Seren noted earlier that “we’re going to hold as many meetings as possible to reach out to the community as much as possible,” including one in the Caledonia ward itself which had no not yet to be scheduled from Monday (September 26).
Councilman Anthony Mattox Jr. went door-to-door with the surveys in targeted neighborhoods and garnered more than 500 responses.
Other board members, volunteers and organizations held an “ARPA Survey Weekend” on September 17-18, recording more than 225 additional surveys in more than a dozen locations in an effort to fill the ” digital divide” in disadvantaged neighborhoods.
This led to a discussion of the Caledonia project last week in the council’s full committee, after councilor Davida Russell decided to “table” the valuation gap scheme legislation on September 6.
“They have a first-time home buyer and they’re waiting for ‘gap’ financing,” Councilwoman Gail Larson said Sept. 19, adding that “the neighborhood badly needs it.”
Seren said he was “not sure if he would spend anything” while the city was still holding ARPA hearings – the reason he called for the bill to be tabled.
He called ARPA’s community input meetings an example of “participatory budgeting” on which he campaigned to become the city’s first elected mayor.
In the meantime, as part of the city’s “Neighborhood Revitalization Program,” the development agreement reached nearly a year ago calls for Hicks’ Start Right CDC to build up to 23 homes in the neighborhood. in distress that his church anchors and where he serves as senior pastor.
As it stands, three of these homes are expected to be completed by the end of the year, with at least six homes built by June 30, 2024.
While project officials estimate that it would typically take around four months to complete a home, the development agreement contains a clause that construction could be subject to delays caused by external or unforeseen circumstances, with the possibility of additional time granted.
Hicks also noted that in the “Timeline” section of a separate development agreement approved late last year with Amato Homes, which is working on 18 other vacant lots along Desota Avenue, there has no deadline.
Hurry up and wait
In May, officials opened this first home on Nela View Road, where Seren said the occasion could be summed up in one word: “Momentum – it’s a wonderful example of what we can do when we pull ourselves together and let’s start rowing in the same direction.”
But the water got choppy from there, with Hicks saying Start Right CDC may not have accurately estimated the city’s treatment times.
“The city refused to sell us the lots until we had met nine qualifiers, which took about two months,” Hicks said. “Then the construction department took two months to approve the plans.”
He said most of these transactions took place SAFEbuiltthe private building inspection company that the city has contracted since around 2016.
Hicks estimated last week that Start Right CDC had already spent about “$100,000 in man-hours” on the project.
Others involved in the project believe that the process will become easier after the first houses are introduced.
“We acted in good faith with the city, through its architectural review board and zoning appeals board,” Hicks said. “We went to town saying we wanted to build in Caledonia. They put out a request for proposals and asked us what we needed from them.
First deal made
With further council discussions scheduled for October, Hicks and Start Right CDC took matters into their own hands on Monday, closing the first home for $250,000 by issuing a $15,000 promissory note to cover the “gap.”
“We did what we wanted the city to do, which made buying the house affordable for the client,” Hicks said.
“We can’t do this for every buyer, but the city can, if they really want to redevelop this area. A developer is not going to make a lot of money, so we need the city’s help,” he said.
The price was around $15,000 compared to projections made last October when the development agreement was signed, which called for houses to be built in the price range of $180,000 to $200,000 and then sold between $200,000 and $235,000.
Asked about the increase, Hicks said: ‘Look at the market – we’ve seen interest rates (more than) double’, as well as construction costs, with supply chain issues and labor shortages -work.
Returning on September 19, Mattox expressed a number of concerns, including people taking advantage of housing programs.
With the city’s ARPA dollars limited, “people will raise the price of anything if there’s a mechanism to fill a ‘gap,'” Mattox said.
Councilman Tony Cuda thinks the legislation should be drafted with some kind of “sunset clause,” limiting how long the city would provide potential “gap” funding to the neighborhood for infill housing.
Hicks agreed with Cuda, saying that “once we can build enough homes to increase the comp values in the neighborhood, the appraisals will be more consistent because we’ll have the ‘comps’ we need to justify the cost of houses.
Mattox wondered if that cost could ever be justified, saying, “It’s impossible to sell a house for a quarter of a million dollars in one city (Cleveland Heights) and then go to the schools in the city of ‘East Cleveland’, as the district is laid out.
As of the first close on Monday, Hicks said Start Right has so far been approached by 21 potential homeowners who have expressed an interest in buying one of the homes.
Project officials said many potential buyers – including the next two, another on Nela View and one on Greyton Road in the same block – are considering more “aging in place”, with a single-storey design and no basements.
Councilor Josie Moore raised the possibility of a pilot program, “where the goal should not be to ensure that the developer succeeds, but to eliminate the long-term effects and ramifications of ‘redlining’ and structural racism. What can we do to fix this? »
Mattox argued that there are other ways to fight racism and help minority-owned landlords, and “before we start a pilot program, we need a funding plan and a budget — not just throwing a lot of money into a ‘gap’ program.”
Seren said he did not write the valuation gap legislation, but introduced it this year as mayor in the interests of the “long-term viability of all our pennies.” -housing markets” and “not for a single developer but for our whole city”.
Hicks pointed out that while some city officials say they “don’t make any legislation for individual developers, they just bought land” for the Cedar-Lee-Meadowbrook project.
In addition to the $765,000 award from Cut Beauty School purchased in August, the board previously approved an initial $290,000 in February for nearby Heights Animal Hospital.
That’s just over $1 million for the two properties on Cedar Road as the city’s contribution to developer Flaherty & Collins. That would be enough money to provide “gap financing” or down payment assistance on up to 70 infill homes in eligible neighborhoods and census tracts.
Incidentally, the city paid F&C an additional $369,000 — good for about 24 “valuation gap” installments — at the end of 2019 for a property on Euclid Heights Boulevard just off Edwards Road that became part of the ground lease for the Top of the Hill Project.
Russell believes continuing to file the Caledonia valuation gap law does a disservice to the community.
“The urgency is now,” Russell said Sept. 19. “We shouldn’t lay it down and do nothing. It was written by the city some time ago and we should speed it up.
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