By Dr. Mark Mussman, Staff Writer
Now is not the time to be burnt out on politics.
With looming crises barely exposed by the pandemic, the wealthy and controlling class are going on like the pandemic never happened - already back to business as usual. We are hearing politicians talk about data showing rental prices decreasing after the pandemic as if it's over. We cannot rely on the powerful interests to decide how we should be able to live our lives - we have to step up and take action. Voting May 4th for the Affordable Housing Trust Fund is one way that we can take the power back to the people, where it belongs.
Cincinnati's Affordable Housing Trust Fund was created in 2018 after decades of grassroots organizing efforts around increasing affordable housing and decreasing homelessness. The effects of homelessness are evident in healthcare and education: far too many people face chronic health conditions due to their homelessness and inability to recuperate in safe housing, while more than 3000 Cincinnati Public School students experience homelessness each year. This means that likely tonight, even during the pandemic, a CPS student doesn't know where they are going to sleep tonight. Which means they also don't know where they will wake up tomorrow.
To combat this type of neglect, Affordable Housing Advocates (AHA), an advocacy group of individuals and organizations devoted to creating and sustaining affordable housing in the region, with a specific focus on households at, or below, 30% AMI (essentially, families who have the lowest incomes and are in the most need of housing support,) did extensive research, and put on several community events, including panel discussions with people from other cities with successful trust funds in place, to learn more about affordable housing trust funds, but also to engage our community right here in Cincinnati to ensure the best trust fund would be created for us, by us.
Legislation was crafted and presented to city councilmembers, and some of the legislation was adopted in late 2018. The initial legislation included provisions to 1. set up one or more affordable housing trust fund accounts to collect funds; 2. create an oversight board, since the funding technically can't be spent by the city; and 3. create a dedicated funding source. Unfortunately, only the first provision was adopted, which created the actual accounts where money could go for affordable housing, but ultimately no way to fund it or spend it.
A one-time contribution of around $600,000 was placed in the account. After community pushback against the negative impact short-term rentals (AirBnB) began having on our neighborhoods, city council agreed to a short-term rental tax, which the city collects, and at the end of the year, is able to put that money into the affordable housing trust fund. It remains to be seen how little the city chooses to put into the trust fund, but estimates have it less than $500 since the inception of the program. In addition, because no oversight Board was created, the Affordable Housing Trust Fund was forced to languish without any mechanism of accessing those funds.
The city will be quick to respond that they are doing all that they can to create affordable housing. They will cite the NOFA program, which is the primary way the city helps affordable housing efforts within the city. The city's actual contribution to NOFA's approximately 6 million dollars used each year, is very little compared to the federal government's contribution through HOME and CDBG (federal funding dedicated to fair-housing and community development.) NOFA funds are not used to create whole housing units, rather they often serve as "gap financing," which means they only attach themselves to projects that already are mostly funded and the city provides this a way to help a project with their financing. When the city says they have created 350 units a year, what they mean is that they provided financial assistance, likely less than 5% of the funding for the project, not that they actually built a unit of housing that someone could live in today.
NOFA funds often attach themselves to Low Income Housing Tax Credit (LIHTC) projects, like Willkommen or the Arts Apartments. The Arts Apartments are in the West End, abutting I75 at Ezzard Charles Drive, and had been around 250 units of organically affordable housing for years. Organically affordable simply means that the apartment rents are low enough that the residents don't have to pay more than 30% of their household income on their rent and utilities. A few years ago, the buildings were sold and a new owner, after tenants organized and involved Legal Aid, agreed to keep the Arts Apartments affordable but this would require a LIHTC subsidy. The tenant organization agreed this was the better option, even though some resident income was too high, and would require them to move out because of the LIHTC restrictions. Because these do not represent a net gain of affordable units, the city should not claim that they created the 250 units at the Arts Apartments.
In addition, half of the remaining units of the city's claim to 350 affordable units in 2019, represent a net loss of housing, as the Willkommen project mixed use, mixed income development has displaced already existing LIHTCs onto already existing units. What this means is that the buildings where Willkommen is coming in already had LIHTC agreements on them, and in order to get the FHACT50 funding for Willkommen, those existing unit agreements were added to other existing units held by other organizations (which presents other issues.) Finally, Willkommen's "affordable" units go up to 80% AMI, well above the 60% AMI limit, because "income averaging" is allowed on projects, meaning that some higher income units can be offset by lower than 60% units.
When we are talking about affordable housing, we are really talking about people making under 60% AMI. AMI is determined by choosing the household who is in the middle of all other households, based upon their household income. 100% AMI means that half of the households make more, and half make less. AMI is generally used for a region, county, city, or neighborhood, but it can also be used to look at households based upon race. In Cincinnati, the AMI for white households is more than double the AMI for Black families. This means that we need to take a more nuanced approach when we look at data such as AMI. We also need to know that anything over 60% AMI is "market rate" housing, including "workforce" housing, which is 60%-120% AMI.
The City of Cincinnati, which is functionally led by the City Manager's office, has adopted positions on affordable housing which contradict our lived experience. For example, the city claims that if they encourage more market rate housing, affordable housing will follow. They believe that it is a simple question of supply and demand, which dangerously excludes important factors such as race, poverty, and lack of access to a livable wage. We have seen in many neighborhoods, such as Walnut Hills, Over-the-Rhine, Corryville, and Mt. Auburn, who have seen substantial increases in market rate housing, the loss of affordable housing, and certainly very little new affordable units. In addition, sharp raises in rent have been noted in each of the neighborhoods, and I think you'd be hard pressed to find someone whose rent has gone down. The studies that the city manager's office cite explicitly exclude cities like Cincinnati that have an aged housing stock and deep issues of prolonged disinvestment. The same author promotes corporate welfare - or how corporations can maximize public subsidy. Ultimately, this ideology limits the way the city can respond to the affordable housing crisis.
Another fallacious argument made by pro-market rate housing ideology is that density and height restrictions limit affordable housing. Cincinnati routinely gives out variances for density and height, yet we have never seen this equate to any additional affordable housing. Recently, councilmembers made the claim that if Elm and Liberty could have the density they wanted, they could create affordable housing; however, they received every density and height variance they requested, and still created no affordable housing . The developer simply did not want to include affordable housing, but in the end, due to public outcry and community organizing, they agreed to put $750,000 into the Affordable Housing Trust Fund. Ultimately, the city is going to move to remove zoning restrictions and the necessity of variances, removing the need for community input on projects. Variances are often ways in which community councils can weigh in on a project, and should be seen as a valued public good .
Another faulty premise that the city relies upon is around the abatement. An abatement essentially allows the property owner to dodge an increase of city property taxes when they improve the property. Our tax abatement program began with the hopes of attracting outside investors into Cincinnati's housing market. A developer can, for instance, buy an affordable building, kick everyone out, update the property, and raise the rents to "market value" and receive a benefit, a tax abatement, from the city for doing so. The city routinely approves tax abatement requests without prejudice, which incentivizes flipping affordable units into market rate. We have seen this happen in more desirable neighborhoods, such as in the downtown area and uptown, but also in Hyde Park and Mt. Lookout. Abatement debates have loomed over the city for years, with the schools arguing that they are shortchanged, and recent changes to the property value that warrants an abatement.
While there is a regional housing crisis, the majority of people in our region who are cost burdened are in the City of Cincinnati. This means that people are paying more than 30% of their income towards their housing, some of those paying more than 50% of their income towards their housing. This means that people don't have the ability to participate in community life, save for the future, or send their children to the best colleges. When you are cost burdened, you are limited in how you can function in society, and it has real impacts on individual and community health. Black households in Cincinnati are more likely be cost burdened, with half of all Cincinnati rental households paying more than 30% of their income towards their housing. (Nearly a quarter of all Cincinnati homeowners are also paying more than 30% of their income towards their housing costs.)
Our shelters operate above overflow capacity, 365 days a year, 24 hours a day. Unfortunately, due to the widespread lack of affordable housing, on an average day, more than 90% of families are turned away from the CAPLINE without any assistance. Even with the CARES ACT funding, families are still struggling to identify support. Across the country, less than 25% of people who qualify for housing assistance actually receive it because programs are underfunded and often have long lines and strict compliance. This means that elderly neighbors, people with disabilities, and families with children are more often without the support that they need than actually receive it. We have also seen increasing numbers at the food pantries and community meals. Overall, Cincinnati loses more than 1000 Black residents each year to displacement. This should be alarming enough to want to act.
We are in desperate need of housing protections. Every day we encounter people who have been removed from their home because the new owner or developer has received a city incentive to flip their building to market rate. We should not give developers benefits for removing people from their homes. We need strong policies, such as Pay-to-Stay, Just Cause Eviction, a county-wide housing court, anti-discrimination, rent increase caps, and even rent control.
The housing crisis also exists because the form and value of work has changed dramatically over the past few decades. Minimum wage jobs, paying $8.80 per hour, only provide about $460 in month to pay for housing, including utilities. There is no place in the United States that a person making minimum wage can afford a 2 bedroom apartment. This means families are forced to take housing that is not safe, nor affordable, and children are sleeping on floors, couches, or sharing a bed with multiple people. Even the way we calculate how much someone can pay towards their housing is flawed, as it's based upon your gross income - meaning that it's based on what you make before taxes are removed, before your healthcare premium, or any other deductions are taken out of your paycheck. Your net income is what you actually get after taxes, and is often 20-30% less than your gross income.
Since the last economic recovery, low-wage jobs saw the biggest gain, forcing people to take on more than one job just to survive. Black workers in Cincinnati do not have upward mobility, and often are expected to take and subside on low-wage jobs.
Issue 3 is our opportunity to ensure funding for affordable housing. It will guarantee that at least 50 million dollars will go into the affordable housing trust fund each year, and that the fund will be responsive to the community. There are many funding sources available, but the housing crisis is more likely a billion-dollar issue. Estimates show that the funds will be able to create 500-1000 units of affordable housing each year. The funds must be used to support households who make about $35,000 a year, or less, with at least half of the funding dedicated to households who are making 0-30% AMI. Depending on the need, funds can be used for rental or mortgage assistance, home repairs, build and maintain units, gap financing, debt or interest reduction, or other uses to directly support affordable housing. One of the benefits of Issue 3, is that it will ensure that rental units will remain affordable forever with deed restrictions.
Issue 3 was written to give the city the opportunity to find the best options to fund the Affordable Housing Trust Fund. Since funding amounts can change with revenues taken in by the city each year, it is likely that new sources, such as reinstating the .3% earnings tax, will be combined with other funding sources, such an Impact Fee. When developers create Market Rate housing, whether that directly or indirectly displaces residents, or removes affordable housing, their development has an impact. An Impact Fee allows the city to collect a fee, if the developer does not include affordable housing in their development. This would only cover a portion of the 50 million, but would be most equitable and also a step forward for inclusionary zoning; however, it would require the city to change its ideology that market rate housing increases affordability.
Unfortunately, with all of the research that went into crafting Issue 3, the city manager's office was asked by city council to write a report on what removing 50 million from the general budget would do to city services, such as trash removal, fire, and police. This report has been misused to characterize the amendment as one that will destroy the city. In a split decision, the Ohio Supreme Court allowed the adoption of altered ballot language where a claim was made that Issue 3 "could" reduce the city's ability to provide services. If the language read "would" instead of "could" the court would not have allowed it, but it is still leading language. Ultimately, it's a scare tactic because new funding sources will be identified, and services won't be cut. Last year, due to the pandemic, the city faced a 30 million dollar deficit and managed to not cut any basic services, and actually gave the police a raise.
City Hall's affordable housing recommendations include taking on debt by re-enrolling in a HUD Section 108 program to establish a loan pool. Cincinnati's Section 108 program just expired last year, and is not limited to creating affordable housing. A recent example of a project that received Section 108: Build Cincinnati funding is the 4th and Race Tower. Section 108 funds can be used to build parking garages, businesses, and luxury housing, they are not restricted to build affordable housing, which is why the city's position on market rate housing increasing affordability, they will likely push the funding into market and luxury housing.
City Hall's plan does not want to dedicate funding towards affordable housing. The funding sources they are calling for, both private and public, do not require funding to go towards affordable housing. This plan does not mark a drastic change in their current policies and it relies on trickle-down housing ideology. The city has determined that a governance board be chosen by the mayor consisting of bank lenders, for-profit builders, for-profit developers, real estate brokers, city councilmembers, and anyone else who can provide "balanced advice" on affordable housing. The board will be able to determine where the funding from the affordable housing trust fund will go, and this was passed by city council as an ordinance on April 14th, 2021. This board could include a person who is eligible to receive assistance from the trust fund, but the makeup is entirely up to the mayor.
What we know is that City Hall's plan is not based upon the years of research and work we have put into the affordable housing trust fund and Issue 3. Issue ensures that the governance board is most effective by including people who are focused on fair housing and others who have experienced homelessness. Issue 3's board also includes professionals in the development and maintenance of affordable housing to ensure that the institutional knowledge is present. It is important to the people of Cincinnati to know that the funds will not be used for political posturing or as part of a political campaign.
Many Cincinnati families have been displaced because white, generational wealth is returning to the city with incentives. Issue 3 ensures that tenants are protected with just cause eviction and it strengthens racial discrimination protections by providing additional oversight. Because Black women are disproportionately impacted by evictions, Issue 3 takes a racial equity position to ensure that the people who need support the most will receive it. Ultimately, only Issue 3 ensures that there is dedicated funding towards affordable housing, that our neighbors have additional eviction protections, and that it's community controlled. In addition, Issue 3 requires all jobs that utilize money from the trust fund provide a livable wage - something that city hall's plan completely ignores. It's clear that voting for Issue 3 is more than making sure that the best, most-researched, strongest affordable housing trust fund is available in Cincinnati, but it is also a way to ensure that city hall won't continue to enrich wealthy benefactors at the expense of the rest of us.