An innovative proposal by Cincinnati City Council members Pat DeWine, Jim Tarbell, John Cranley and Alicia Reece could attract 500 new homeowners into Over-the-Rhine.
The Over-the-Rhine Arts District Home Buyers Loan Program would use $2.25 million already approved for OTR to help people buy market-rate condos or other homes there with no down payments. The city would put 3 percent into each mortgage loan, sparing homebuyers a down payment. At current interest rates, people could buy a $100,000 condo with a mortgage payment of $584 a month, an amount they may be paying in rent. Absentee owners need not apply. DeWine estimates the plan could leverage owner-occupied units worth a total of $75 million.
Council should embrace this plan, to boost the city's pathetic 38 percent homeownership rate and for the bounce it can give the city's other housing initiatives. The proposal goes to committee today, and council should vote on it next Wednesday.
DeWine was chief architect of a $100 million revolving loan fund created earlier this year. For that fund, the city partners with banks to offer construction loans to develop market-rate housing in distressed neighborhoods citywide. Cincinnati Housing Development Fund has about $15 million in loans already approved or pending, and since those dollars will be paid back and loaned out again several times over 10 years, the fund could generate $250 million in housing. Developers should be even more energized if the proposed Homeownership Fund comes online, because the new fund will create a ready market of homebuyers for redeveloped OTR properties.
The banks would pay back the city's $2.25 million out of homebuyers' mortgage payments over 10 years. Half the city dollars will come from the Arts and Culture Fund to aid OTR's growing arts district. "Many of the buyers will be artists," DeWine said, but anyone can qualify to add to the critical mass of OTR's roughly 6,000 residents. Almost 30,000 people lived there 30 years ago. Cranley is convinced the fund will advance OTR's strategic importance in connecting downtown's 80,000 workers and Uptown's 60,000. Wonder of wonders, council is acting entrepreneurial.
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