In a weak housing market, will Cleveland's Housing Innovation District move the needle?

Cleveland's biggest problem is that the city is shrinking.  The population in 1990 was 505,000 and 372,000 in 2020. 

Now that's a store.

For example the famed Heinin supermarkets local chain announced they're closing their landmark downtown store, located in a historic bank--after downsizing and rebuilding after George Floyd riots closed the store ("Heinen’s closure in downtown Cleveland raises questions about sustaining development").

 And so is the metropolitan area.  The 2020 population was about 2.1 million.  The estimate for 2026 is 1.72 million.  

1836 E. 79th Street, Cleveland, Ohio.

In that context, there's a lot of vacant buildings and lots ("Finding the Potential in Vacant Lots," New York Times) not just in the city proper, but in the suburbs too.  

I know that years ago, Cleveland's inner ring suburbs were leaders in trying to do suburban revitalization (The Northeast Ohio First Suburbs Consortium), but not quite how Arlington County, Virginia was able to because the DC metropolitan area was growing, and they could leverage the addition of Metrorail ("How DC [really Arlington County] densified," Works in Progress).

Still, Cleveland has incredibly social, community and organizational capital. In the 1990s, Cleveland  foundations worked together to force accountability and consolidation on community development corporations.  There are many foundations doing great housing work like the Catholic social justice based Famikos Foundation.  When I was there in 2002, the city had a great facade improvement program and manual.

The Cleveland Restoration Society was a leader in leveraging city monies in bank accounts to fund housing renovation.  They have a revolving fund to invest in property development.  There are a number of firms specializing in historic preservation financing and rehabilitation projects.  And the state has a historic preservation tax credit.

And they have a program to help churches light their steeples, which I think is really cool.

The Metroparks system is fabulous, with many on the Lake Erie waterfront.  

There are great civic assets like the West Side Market and business improvement districts and community development initiatives all over.  The Rock and Roll Hall of Fame.  Terminal Tower is a fabulous train station.  (But all the old department store buildings, massive 1 million s.f. or more are all defunct.)

I always tout there "Business Revitalization Overlay District" as a way to coordinate investment with the public and private sectors.  They have strong design review requirements.  And the State has a strong receivership statute that allows nonprofits to take over properties, cure the title, fix them, and sell them, to bring houses back into use.

They are an example of a line I have, that cities like Cleveland 

"have a desperate willingness to experiment because they have no other choice."

More alternative weeklies need to publish "worst of" articles. Page 1, Page 2.

They still have legacy heavy rail service although it's not well used.  A great system for evaluating bus stops for amenities.  The transit system provides decent coverage, and it was the first one to connect heavy rail service to the local airport in the late 1970s.  A big Midwestern bank is still based there, and there are some other corporations.  In nearby Akron, LeBron James has invested a lot, so has the Knight Foundation.  

The Cleveland Scene alternative weekly still publishes once a month print issues, although the Cleveland Plain Dealer only prints a couple of editions each week. But their urban design writer who was great, Steven Litt, has retired.

Both the Akron and Cleveland areas have great regional bikeway plans and systems.  Plus the universities and the Cleveland Clinic constantly grow.  There are investments in public spaces, the (in my opinion) over touted Health Line BRT, etc.

Creating Cleveland heavy rail is a fascinating story.  The Van Sweringen brothers were developing Shaker Square and Cleveland Heights and they wanted transit service.  To get it, they bought the Nickel Plate Railroad system, to get the necessary right of way.  They also built Terminal Tower.  But they were ruined by the Depression.

Forest City, a regional hardware store chain, was based in Cleveland, and is long since shut down, but the firm shifted to large scale revitalization oriented real estate development in many cities, including DC.  Value City, a regional department store chain specializing in low income markets, was based their too.  It's last iteration in furniture, finally closed this year.  But the founding family, the Schottensteins, when on to be big in vulture investing.

And Playhouse Square is a national best practice example of historic preservation and arts focused development.  They've since created a CDC to build and hold property around the theaters.  

The Gordon Square Arts District is a best practice neighborhood focused arts district revitalization initiative.  A number of new developments complement the Capitol Theatre.  Reasonably well designed too.

To me, Cleveland has a lot going on, and if I could have found gainful employment there, I would have liked to live in the city, despite its cold winters.

I think the Housing Innovation District is interesting, it aligns a wide variety of programs and systems so that both small and larger developers can participate and work with small parcels, not just big ones.  From "'Amazing neighborhoods' that deserve investment. Cleveland proposes East Side improvement district" (Ideastream/NPR)

Cleveland is proposing sweeping development efforts in the historically redlined East Side neighborhoods of Hough, Central and St. Clair-Superior.

Using a suite of economic development tools, including waived permit fees for new construction, modernized zoning codes and a new tax increment financing district, the city plans to put millions toward spurring new housing, businesses and walkable communities in neighborhoods that have been challenged by decades of disinvestment. Cleveland officials are referring to the area as a Housing Innovation District.

"When we think about the Housing Innovation District, it's 'How can we create an area that really incentivizes people to bring new housing,' but [also] really builds wealth block by block in the neighborhood for the existing residents that are here," Tom McNair, the city's Chief of Integrated Development, told reporters in St. Clair-Superior on Wednesday morning. "Because St. Clair Superior, Hough, Central: these are amazing neighborhoods that for far too long haven't gotten the type of investment they deserve."

Lake Erie beach, Cleveland Metroparks.

BUT, at the end of the day, you need households to live in the buildings.  It's not about what the neighborhoods deserve, it's about what the market will support.  

I read a couple of articles on small developers in Chicago and Pittsburgh ("Six new townhomes. Zero buyers. And one developer on the brink," Pittsburgh Post-Gazette) who built market rate housing in emerging neighborhoods (so weak not strong) and they couldn't sell them.  Or the houses wouldn't appraise for a mortgage, because of the prevailing housing prices.

I am constantly amazed to see community revitalization programs in specific areas that have spent many hundreds of millions, and it's hard to see improvements, even though they are and usually key civic assets, plus housing--although my line from decades ago, that building better housing for poor people doesn't rebuild broken micro economies all that much, which was my lesson from H Street DC ("Ah, the H Street Community Development Corporation"). 

An awesome house for $325,000 in the Ohio City neighborhood across the river.

OTOH, even marginal additions of population make a difference ("Community revitalization initiatives for smaller communities | marginal attraction of people and commerce even in small amounts makes a difference").

And to be fair, they've really pulled together a lot of policy changes, financing, land etc. to make things happen.  It will be interesting to watch even though I think that it's really tough to move the needle in weak markets.