Super Bill or Super Bull?

By Dr. Mark Mussman


In 2016, members of Affordable Housing Advocates (AHA) brainstormed priorities for the upcoming year: inclusionary zoning, eviction prevention, and affordable housing trust funds were rising to the top of a very long list of issues in housing that need addressing. After much discussion, it was decided that instead of pushing forward on all of these issues, focusing on one would have a greater impact: the affordable housing trust fund. Cincinnati had no trust fund to raise and distribute funds creating and maintaining affordable housing, so AHA was essentially starting at square one. Fortunately, the collective experience in the room was able to find a way to not only research and develop the optimal structure of an affordable housing trust fund while educating the public, but to also bring it to city hall for approval.


The international investor model is to turn affordable housing into market rate and luxury housing, resulting in displacement. Photo by Dr. Mark Mussman

In 2018, AHA brought proposed legislation to city hall which called for reducing homelessness in addition to creating and maintaining affordable housing. Essentially, the trust fund would have three parts: 1. an account to hold the funds; 2. an oversight board to approve the uses of the trust fund; and 3. a funding source. Unfortunately, only the first part was approved by city council in 2018 - an account to hold the funds. An initial deposit of approximately $600,000 was made into the fund from the sale of the city-owned Norfolk Railroad, but no funding source was determined at that time. Furthermore, because the trust fund is technically separate from the city, a lack of an oversight board meant that the funds would go unspent. To this day, nothing has been spent from the affordable housing trust.

Rather quickly, interest in finding ways to fund the trust began springing up. After community pressure, an excise tax was added to short-term rentals (AirBNB) that the city is able to discretionarily place into the trust. City hall explored, and passed, regulations to Tax Increment Financing (TIF) district funding that would require at least 25% of TIF funds to be spent towards affordable housing within the district. This city has over two dozen TIF districts, so TIF funds could support affordable housing throughout the city, but this fund is separate from the affordable housing trust fund. Community organizing efforts, like the one supporting affordable housing at Elm and Liberty in Over-the-Rhine, directed additional one-time funding into the trust fund in lieu of voluntary tax incentives contribution agreement (VTICA) payments for the streetcar.


The scattered-site Willkommen project features accessible new development. Photo by Dr. Mark Mussman

Even as funds were being collected in the affordable housing trust, there still lacked a mechanism for spending it, and there was no oversight, so even basic accounting has been difficult. At the end of 2020, there was reported to be around one million dollars in the affordable housing trust fund. Then in 2021, AHA, the Homeless Coalition, and the Metropolitan Religious Coalition of Cincinnati (MARCC) presented a collaborative solution to the fledgling affordable housing trust fund, including funding and oversight. The city manager's office used this solution to craft a report on affordable housing, calling for increasing support for affordable housing and outlining ways in which the city supports affordable housing through the Notice of Funding Availability (NOFA) program. Strikingly, it called for the creation of the Housing Advisory Board (HAB) and a way to seek out tens of millions of dollars for affordable housing by borrowing against future federal Community Development Block Grant (CDBG) allocations with a Section 108 loan and by asking for private contributions.


In the past, Section 108 loans have been used to support market-rate and luxury housing. Funds from the Section 108 loans are not restricted to affordable housing. Section 108 funds have been used to build parking garages and businesses. The city manager vowed that at least 51% of the loan would go towards affordable housing, but defined affordability as paying less than 30% of household income on housing, opening the fund to any level of income. True affordable housing is housing that is affordable to someone making 60% AMI or less, or about $35,000 yearly, or less. When questioned about it at a press conference, the (now former) city manager said that "deeply affordable" units, at 30% AMI, for instance, are too difficult to do, so these funds would not likely support housing at that level. This statement is in contrast to the biggest need for housing, at or below 30% AMI, which is essentially a full-time minimum wage earner in Cincinnati.


The vast majority of city subsidies goto market-rate and luxury housing. Photo by Dr. Mark Mussman

Towards the end of 2021, the former mayor appointed members to the Housing Advisory Board. The heads of 3CDC, Model Group, the Port Authority, Cincinnati Metropolitan Housing Authority (CMHA), Shelterhouse, Housing Opportunities Made Equal (HOME), TriVersity Construction, a representative from Cincinnati Chamber USA, a senior vice president at Fifth Third Bank, former mayor and real estate agent Roxanne Qualls, and city councilmember Greg Landsman were appointed to the HAB. Very little has been reported or communicated to the public about the HAB, its meetings, or even its existence.

City council now has new committees including Equitable Growth and Housing, which is focusing on understanding the issues and finding legislative solutions. It is chaired by councilmember Reggie Harris, who is one of six new council members. Recently, Harris joined the monthly AHA meeting to talk about proposed zoning changes and other legislative opportunities to support affordable housing. He shared the recent legislation that gives automatic tax abatement to city-recommended low-income housing tax credit (LIHTC) projects approved by the Ohio Housing Finance Agency (OHFA). LIHTC is currently seen as the most useful tool for creating and sustaining affordable housing in America, and is funded by corporations, including banks and insurance companies, who off-set their tax liability by buying tax credits that non-profits and other developers use to build affordable housing units. Generally, these are projects that have 40 or more units, receive upfront funding, and are required to provide housing to households who make an 60% AMI or less (with income averaging allowing up to 80% AMI units) for 15 years. Developers must report and work in tandem with the tax credit holders to ensure compliance. Recent examples of LIHTC projects in Cincinnati include new builds like Willkommen in Over-the-Rhine and rehabs like the Arts Apartments in the West End.


Harris also spoke about the push to change zoning rules to encourage more affordable housing. Unfortunately, this theory will not result in affordable housing on its own and requires regulations and incentives, perhaps even inclusionary zoning, to be successful. In the past, developers have routinely received variances, even with objections from community councils, to increase density and remove square footage requirements. The proposed zoning areas are also more likely to be in Black neighborhoods and communities who are already seeing displacement due to gentrification. If deregulation goes unchecked, it will further increase the wealth divide and ensure the continued rapid displacement of Black residents. The proposed zoning changes do not impact the largest zoning in the city - single family housing. Finally, the councilmember spoke about the Section 108 fund and the partnership with the Cincinnati Development Fund (CDF) who will now administer the Section 108 loan pool and any private contributions to the affordable housing trust fund.


Future site of the Elm and Liberty market-rate project in Over-the-Rhine. Photo by Dr. Mark Mussman

Until the HAB creates affordable housing priorities for the trust, existing funds will be unspent; however, TIF funding is already being dedicated towards affordable housing and the NOFA program will continue to provide gap financing for developments in the works. But without dedicated funding sources, the affordable housing trust will not be able to even keep up with the simple loss of affordable units in Cincinnati. In our city, nearly 30,000 families are already paying too much for their housing, sacrificing full participation in civic life, as additional units are being lost to out-of-state and foreign investors. Without tenant protections, guaranteed livable wages, and access to affordable housing, Cincinnati will continue to lose affordable housing to incentivized, market-rate, multi-use development as displacement will continue to outpace affordable housing production, resulting in a further loss of Cincinnati's residents and social fabric.


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