(Plain Press November 2024) At its September 30^th meeting, Cleveland City Council passed legislation to create a $100 million Cleveland Housing Investment Fund. The 16 members in attendance voted unanimously to approve the fund proposed by Mayor Justin Bibb’s administration.

  A statement from Cleveland City Council about the legislation says that the fund will use $18 million from federal American Rescue Plan Act (ARPA) funds awarded to the City of Cleveland with the hopes of raising $82 million from private sources. The statement from City Council says the goal is to “provide low-cost, flexible capital and level the playing field in the city’s middle market and opportunity neighborhoods.”

  The fund will be managed by a national nonprofit community development financial institution called Local Initiatives Support Coalition (LISC).

  The statement from Cleveland City Council said that the City of Cleveland’s initial plan was to use the ARPA funds to help homeowners with down payments. Instead, the plan now will provide low-interest loans to developers and homebuilders.

  Some City Council members pushed back against this change. The administration’s new plan prevailed, with an amendment by Councilman Anthony Hairston to have a seven-person project review committee tasked with approving all the fund requests. The committee will have five voting members appointed by City Council, the Mayor, and LISC and two non-voting members, one appointed by the Mayor, and one appointed jointly by the Mayor and City Council.

  City of Cleveland Chief of Integrated Development Jeff Epstein indicated that the City of Cleveland’s goal is to use the fund to spark the development of 2,500 to 3,000 units of affordable housing for families at or below 80% of the Average Medium Income. He says the revolving loan fund is expected to result in $250 million in rental (including mixed-use developments) and for sale housing.

  Average Medium Income (AMI) is defined as the Average Medium Income of the six county Cleveland Metropolitan Statistical Area (MSA) which includes Ashtabula, Cuyahoga, Lorain, Medina Geauga, and Lake counties. According to the United States Census Bureau, the current Average Medium Income of the Cleveland MSA is $81,500. Thus, 80% of AMI for the Cleveland SMA would be $65,200. [Editor’s note: Medium household income for the City of Cleveland is substantially less at $37,271].

  The City Council statement says, “some Council members took issue with the fact that in some parts of the city, 80% AMI results in rents of $1,500 and above for three bedrooms.”

  “$1,500 is $600 more than I pay for my mortgage,” Councilman Brian Kazy said.