Affordability pressures growing as first-time home buyers are struggling

 Notes

The meeting was called to order at 10 a.m. Officials present:

• Jan-Michele Lemon Kearney, committee chair and vice mayor
• Seth Walsh, committee vice chair and council member
• Anna Albi, committee and council member
• Scotty Johnson, committee and council member

Committee Chair Jan-Michele Lemon Kearney noted there were several other city officials watching from the audience: Ryan James, Cincinnati City Council member; and Kareem Moffett, Cincinnati Public Schools board member.

The focus of the meeting was on the state of real estate in Cincinnati, using the Westwood neighborhood as an example, presented by Heather Kopf and Maura Black of the Realtor Alliance of Greater Cincinnati. They expressed eagerness to be conduits for positive growth and change in the community.

The full presentation can be found here.

The committee expressed interest in setting up regular meetings with the Realtor Alliance to discuss these issues.

According to the presenters:

• Real estate has a significant positive economic impact on the region, including $5.8 billion in sales, 1,500 monthly sales (across Hamilton, Butler, Clinton, Warren counties), and job creation (one to three jobs per sale).
• Realtors are seeing tax/fee changes slow real estate sales already. Housing shortages for the middle class and working class appear years before affordability crises.
• CASE STUDY: WESTWOOD
  • This is the largest Cincinnati neighborhood. It is very diverse, with a strong neighborhood identity, historic housing stock and diverse household types.
  • Coordinated neighborhood investment revitalized Westwood through partnerships, public investment, small business activation, housing stability and zoning/development flexibility.
  • This revitalization had direct economic impact: increased buyer demand, expanded business and entertainment activity, all of which made it more walkable and safer.
    • In the last seven years, median sale prices increased by 78%.
  • Housing, in this equation, is the long-term multiplier; investment would have fallen short if housing supply had not been adequate to sustain the growth.
• The affordability gap:
  • The median household income in Cincinnati is about $52,000.
  • An affordable home today costs around $158,000, and the median home in Cincinnati costs $290,000 (gap= $132,000).
  • This trend is reflected nationally; the affordability crisis is everywhere.
• Housing supply shortage: Cincinnati is woefully undersupplied, and what is available is aging. There are also concerns about infrastructure
• Other important national trends
  • Home prices remain near record highs
  • Mortgage rates are still over 6% and limit affordability
  • Rent is still high, but property taxes are driving some owners to sell to avoid property costs
  • Inventory and construction are struggling due to rising costs and regulatory challenges, which limit future supply growth
• Community education is necessary to explain housing opportunities, such as ADUs (accessory dwelling units), the American Dream Downpayment Initiative through the City of Cincinnati, and the Ohio Housing Toolkit, 

The council thanked Kopf and Black for their presentation and began a discussion with the presenters.

A community member insisted that any raw materials (such as trees) should not be processed in Eden Park due to air pollution, but should be processed in Mount Airy to benefit our communities directly.

Kearney recommended quarterly (or more frequent meetings) to continue collaboration with this group.

Kearney asked how to increase the number of ADUs, as she believes this empowers homeowners to stay in their homes, increases affordability, and creates additional revenue streams for homeowners.

Black recommended a marketing campaign involving preexisting and new pieces advertising. She said the community can perceive ADU construction as commercial construction overtaking residential areas, which is not the case.

Kopf noted that many MLS (multiple listing service, in real estate) systems include filters for properties with ADUs. She also noted that the cost of building an ADU is very unwieldy for many homeowners due to the cost of materials and tariffs.

Black noted she is working to create 2- and 3-home templates/blueprints with the city that are easy to get approved and build, to ease this process and save homeowners time and architect fees.

Kearney reflected that the American Dream Downpayment Initiative has been inefficient and bureaucratic for civilian users. She is working with the city to try to simplify the process.

Walsh thanked the alliance for proposing views that may clash with council decisions.

Walsh reminded the council that there is a motion in progress on making ADUs more possible and palpable through building code adjustments and cost savings efforts.

Walsh reminded the council of a residential tax abatement back in 2023. At the time, it was criticized because it didn’t necessarily help neighborhoods not already experiencing growth. Black noted that, in her personal experience, the evolution of the abatement has helped homebuyers and people building new homes, and that the original abatement should be revisited to get data-driven results. Kopf said this abatement was supportive to owners of short-term rentals.

Walsh said there may be more policy necessary around the short-term rentals downtown, and it would be nice to have the realtor alliance weigh in on those policies.

Albi brought up the importance of driving homeownership rather than property acquisition for business use (short-term rentals). Black offered that having a voice in those conversations would be particularly useful, as they can share myriad benefits and costs to the short term rental market and that ideal balance in each community. Albi noted, “what is the missing middle,” referring to the middle ground between having too many short term rentals, and therefore, not enough homes for first time buyers.

Black recommended development/use of the Ohio Housing Toolkit, especially because there are a great deal of “road blocks” when trying to build a new property in the already populated areas near downtown. It has been very difficult to turn vacant properties into useful residences because of these “road blocks.” Kopf recommended sharing grants with first-time home buyers (such as the Welcome Home grant, the American Dream Downpayment Initiative, bank specific grants), or sharing with them Federal Housing Association loans.

Kopf again stressed the cost of materials and labor still far outweighs the abilities of most new homebuyers, which is a problem that cannot be remedied without major policy change. Albi confirmed that her experience echoed that even if corporations wanted to build affordable single-family townhomes in some of these neighborhoods – it would not be profitable because of the cost of materials and labor.

Kearney reiterated that the city manager’s office is focusing efforts on policy change to positively respond to these issues.

Public Comments

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