Cleveland will put $18 million toward a new, $100 million Housing Investment Fund aimed to bring thousands of affordable housing units to the city by the end of this year.
The money, which will come from the city's half-billion dollar pot of federal stimulus dollars allocated by the American Rescue Plan Act, will provide developers with low-capital loans and equity in low- to moderate-income neighborhoods.
"This is a signaling for the city to say this is the kind of development we want to see," said Jeff Epstein, the city's Chief Integrated Development Officer, at a Monday committee meeting. "We want to see development in these neighborhoods. And we need more emerging and aspiring developers. We've created a tool to help them."
The fund is bolstered by $82 million from private partners, including Key Bank, which will pitch in $20 million. The city's contribution is a grant. Leaders from the fund's facilitators, Local Initiatives Support Corporation (LISC), said investors will be repaid from the proceeds of the fund. LISC runs similar funds in cities like San Francisco, Charlotte and Detroit.
At least 50% of the housing stock will be available for residents earning less than 80% of the city's area median income or $54,450.
Leaders expect to develop between 2,500 and 3,000 affordable housing units by this winter. At least 100 of those units will be available for homeownership opportunities.
"This council has really hung its hat on affordable housing and trying to make sure that housing is what we have doubled down and invested in," said Blaine Griffin, the city council president. "Quite frankly, we know government can't do this alone. We need the private sector to come through and we think this is a good opportunity."
Epstein said the fund will help reduce the strain on city resources for affordable housing.
The lifespan of the fund is 15 years with the possibility to extend.
