Cleveland is pulling all levers to revitalize its dying industrial area and create jobs along with housing that will bring the city back to life.
Thomas Wasinski, Aerial Agents
Cities across the U.S. are heads down creating solutions to local housing challenges. In Cleveland, city leaders aren’t labeling it a housing crisis, instead they recognize the city has an income problem and have put together a strategic plan that will solve for both at the same time.
The city’s Site Readiness for Good Jobs Fund has raised more than $80 million to convert unused real estate into productive use, which over time will unlock more than 25,000 jobs. The fund is meant to trigger housing investment and keep people in the city because they will have work and incomes to pay for homeownership.
“One of the biggest things I kept hearing from small- and medium-sized companies was they couldn’t expand or grow in Cleveland, and the biggest pain point wasn’t labor, but it was the availability of site ready land to grow and expand,” said Cleveland Mayor Justin Bibbs.
Cleveland faces challenges from deindustrialization, massive job loss, disinvestment, and buildings that are falling apart.
“We are layering in every possible tool with every possible incentive that we have to try to get this right,” said Thomas McNair, who serves as the chief of integrated development for the City of Cleveland. “This land is worth less today than it was six years ago, than it was 15 years ago. So, the city is losing money on this geography, everyone is losing revenue on this, and most of all, the residents are losing by living through this disinvestment.”
But now, the land is the key to and the solution to the city’s future success and economic stability.
Cleveland’s Housing Situation
Without work, residents cannot afford housing, which caused the city’s existing housing to deteriorate along with other community aspects, creating a doom loop. The City Health Dashboard reports that in Cleveland, the estimated income inequality score was -36.3 in 2022, compared to an average of 1.7 (scores range from -100 to 100).
One key aspect of the housing and labor connection is getting to and from work. While Cleveland has a walkability score higher than average, the challenge is making the walkability connected to jobs and income, which will be addressed by the new plans.
The housing situation in Cleveland has a lot of opportunity for investment. Cleveland sits in Cuyahoga County, which has a current median home value of $207,726 that appreciated 9.6% annually since 2021 according to H&RA Advisor’s HousingWeaver. That appreciation rate is above national average, which is dangerous because it’s outpacing income growth.
Median property value across Cuyahoga County is $215,000, but the most urban areas are at $160,000, creating above average inequality. The county represents 615,331 housing units that are fed by old infrastructure and little to no variety with almost 60% single family homes. More than half of the homes were built before 1960, and less than 4% were built after 2010. This aging stock means there is a greater need for maintenance and there will be higher capital improvement costs.
On top of that, new supply is stagnant. Cleveland is one of the lowest performing areas nationally for new housing permits with only 7.7 building permits issued per 1,000 residents. Cuyahoga County’s current homeownership rate of 59.4% is among the lowest in the country, which indicates some challenging structural hurdles.
The hope is that the interlock of housing and jobs will start solving some of these challenges.
Housing Innovation District
Recognizing the issues, the city put together a housing innovation district to focus on red lined, disinvested neighborhoods to create effective, pro-housing policies, understanding that jobs had to come first.
“We always say that we don’t actually have an affordable housing problem in Cleveland, we have an income problem, and we need good jobs,” McNair said. “We need good quality jobs for the residents around these neighborhoods.”
To deliver jobs and homes, the 1,500 acres around the Midline was rezoned using form-based codes–codes based on the form rather than based on use–to make it easier for investment. In addition, permit fees for some types of single family housing were eliminated, and fees for multifamily housing were reduced by 50%. A tax incremented financing structure was also added to that area, giving the city the ability to reinvest in the infrastructure for water and sewer connections to further reduce the cost of housing development.
Long time Cleveland residents (L to R Twila Norris and LaRhon Wheeler), share their passion for the city’s focus on creating more jobs and how that will then support better community.
Jennifer Castenson
“When I see all the new development, I see hope,” said LaRhon Wheeler a long time Midline area resident. “No one works here because there are no jobs here, they are gone. It saddens me that people want to work but there are no jobs.”
Another area resident, Twila Norris, said, “There are no jobs in our community. Houses are being torn down, it really hurts to see them being torn down.”
These residents have been in the area for decades and watching the changes happen and seeing that people are being displaced to find work and the negative impact on their neighborhoods. They, like many other residents, seek community.
“We’re doing everything we can to make it easier to invest in housing, which translates to the customer,” McNair said.
He calculated that there are 2,800 vacant city land bank lots within that area and 20,000 total in the city. Even with that wealth of land available, homes have not been built. In the past ten years, only two homes have been constructed in the Midline.
The average cost for permits for a home in the city is $4,875, which is a cost typically directly passed on to the home buyer. Without permits being issued in recent years, it’s income that will not be missed by the city, so leaders decided to remove the permit fees to create another incentive to build.
One of the things that we love about modular, is that the plans are pre-approved by the state. That type of structure and discipline have allowed them to work on a pattern book of pre-approved homes, again easing the path to get a permit.
While the city is making progress, there is still the need for other stakeholders from the private landscape.
Private And Public Housing Investment
Mayor Justin Bibb, Richard Starr and Thomas McNair share the city’s efforts to drive jobs into the area that will lead to housing opportunities.
VioletPR
The Site Readiness Fund is preparing parcels to be ready for private sector investment by cleaning them up and getting entitlements.
“Along with state and federal funds, the private sector will play an important role,” said Brad Whitehead, managing director of the fund. “Certain things have to be prepared in a way to invite the private sector in, that also fit with the city’s strategy for the connection to the neighborhoods that we want, for the architectural and community amenities that we want.”
There is a lot of give and take and a lot of moving pieces to this type of arrangement.
“So, when you talk about some of the changes, it’s all about how do we get those actual companies in place to be able to do the things that we are asking them to do, and also do it with the community involved,” said Cleveland Councilman Richard Starr. “We’re talking to residents that are part of the initiative to understand what their ideas look like and they want to see jobs; they want to see housing. That is how you bring everything full circle. It’s about what we’re going to do in the future to make sure it’ll be more accessible for everyone.”
All of it adds up to big goals and objectives for the city.
“This is a $2 billion problem in Cleveland getting all the vacant land that we have site ready for development,” said Mayor Bibb. “We’re going to reprioritize that to make Cleveland a walk to work city once again, so these residents have jobs in their neighborhoods.”
The policies and incentives are focused on growing affordable, workforce, and market rate housing, which are all needed to make it work and to grow they city’s tax base, grow the middle class, and to support the working class. Other measures are complementing these efforts, such as Residents First legislation that was passed years ago to crack down on predatory, racist landlords, and to limit out of state investment.
“Cleveland put all the toolkit in place that we need to make this happen, because you can’t come in and do this on commercial money,” said Robin Bartram Brown, CEO of MMY US, the modular home builder moving into one of the first revitalized buildings. “New market tax credits will help, and between all of the different stakeholders, we’re managing to rehab this incredible building and make it work for us, as well as the community and the city and the state.”
MMY was selected as the city’s preferred modular housing manufacturer through a design competition, and awarded $2.56 million in Ohio Historic Preservation Tax Credits to redevelop the historic Wellman-Seaver-Morgan Engineering Company building into a manufacturing plant for modular housing.
Manufacturing Housing and Jobs
At the MMY factory, more than 150 jobs will be created for people who can work to crank out housing, including the company’s pre-approved floorplans for a three-bedroom single family home and a three-bedroom, two-bath, 1,200 square foot home that are LEED platinum as a standard. The homes can be delivered in eight weeks after a lot is secured.
Again, new jobs and new housing are working hand in hand. The housing factory will be a sustainable source of jobs.
“There is a 30%-plus carless rate in the city of Cleveland,” said McNair. “Having 150-plus union employees all in one location makes it really easy to get to work. It doesn’t matter if it is rain, if it is shine, if it is snow.”
Plus, Brown explained, it’s easier to retain employees who work in a factory because they can go home every night.
MMY homes also have sustainability features that benefit everyone. McNair explains that with the LEED Platinum certified homes, homebuyers can start having conversations with banks about energy efficiency mortgages, another way to help write down the cost of what it takes to own a home in Cleveland.
“Just by adding a source of renewable energy, a heat pump or solar, we can get to a net zero home,” Brown said—an upfront investment that would lead to years of no utility payments.
To validate the homes and the program, the city is working with MMY in a 10-home market pilot that is scheduled to begin later this year, even before MMY has its new manufacturing operating. While all of the work is in motion and city leadership is passionate about moving forward quickly, some of it takes time.
The city has hired Catherine Kliorys and her team at engineering firm Verdantas to remediate the land to be sure it is safe and hazard free.
Cleveland As A Template For New Housing Development
The public-private aspect and the large scope of work that Cleveland is taking on could be a template for other Rust Belt cities facing similar housing and labor challenges.
“Cleveland has an unfortunate history of income inequality and redlining, and this part of the city has not gotten its fair share of investment for generations,” said Mayor Bibb. “We have an opportunity in Cleveland to lead America in our industrialization strategy –we’re going to make things in America again. Not only building homes, but we support 80% of the aerospace industry throughout the U.S.”
The leadership and strategy of housing and workforce going hand in hand will provide a more sustainable base for the future of the city.
“It’s not easy to admit when the city you love is rated low in equality,” said Jack Newton, director of community development and adaptive reuse firm GBX Group LLC that is based in Cleveland, and also the local council chair for the Urban Land Institute. “Our hand is being forced to confront the challenges to push and pull between public and private sector, but there is less compartmentalization between the two than other markets I’ve seen with a strong civic history.”
GBX has projects nationwide, but Newton feels like Cleveland is unique.
“There are a lot of intangibles that make it successful,” he said. “There is an established feeling that the private sector shouldn’t be hands off and there is an understanding that cross collaboration with leadership is more powerful in a city that doesn’t have a ton of financial resources. That amplifies everyone’s time and investment.”
He appreciates the value of the Site Readiness Fund for its ability to explore the gaps of the public sector.
“The public realm isn’t something that comes after economic development; it’s part of the infrastructure that makes equitable, community-centered development possible,” said Keisha Gonzales, executive director and CEO at LAND Studio, a Cleveland-based nonprofit that works at the intersection of public art, public space, and community development. “We are focused on the relationship with the built environment, like walkability and safe options to get to work. There is a burden to get to a job—the time it takes away from being with your family.”
The opportunity is not only to bring manufacturing back, but to rebuild a relationship between work and residents. LAND is providing the design and strategy needed to reconnect people to one another and places and spaces that contribute positively to mental and physical wellbeing, such as a greenway that will physically tie people to one another in a vibrant sustainable way of living.
As the future becomes more dependent on urban space, housing density and redefining work and community, Cleveland provides a strong example to cities that will follow.