Staff reporter and columnist
Cincinnati Business Courier
It’s a fairly common belief: The redevelopment throughout Over-the-Rhine has pushed out low-income residents and replaced them with an enclave of affluent hipsters who now live in rehabilitated or brand-new condos and apartments in the neighborhood.
But the authors and sponsors of a new, comprehensive study of Pendleton and OTR housing say newly compiled data tells a different story of an increasingly economically diverse neighborhood that still has room to grow and maintain a mix of incomes. Moreover, a significant chunk of housing for the lowest income residents was lost before the redevelopment push even began.
“It will be interesting for people to see that there still is an opportunity here,” said Joan Kaup, secretary of the Over-the-Rhine Community Council. “Some people have the misimpression you can’t afford to live here if you can’t buy an $800,000 condo.
“We’ve got real diversity. Cincinnati has a chance to really be a real model on how to revive a neighborhood without displacing families.”
The people of Over-the-Rhine increasingly have a mix of incomes, according to the OTR Housing Inventory study by the United Way and Xavier University’s Community Building Institute, leading the neighborhood to become more like it was prior to the mid-20th century before the construction of Interstate 75 pushed a concentration of poor people into the neighborhood. Economic diversity has been a goal of the up-and-coming neighborhood since OTR’s master plan was written in 2002.
Over the last six months, the institute studied occupied and vacant structures in the neighborhood on behalf of the Over-the-Rhine Community Council and compared it to data from 2002. Over-the-Rhine Community Housing, the primary developer of low-income housing in the neighborhood, and the city’s planning department provided guidance on what information they wanted included in the report.
In 2002, 3,235 housing units of the neighborhood’s 3,594 occupied homes were affordable by people at the bottom of the income scale, which includes those making 0 percent to 30 percent of the area median income. Those units constituted 90 percent of the occupied units in OTR. Today, there are 869 such units, or 22 percent of the number of units that could be occupied. The area median income for a family of four was $71,200 in 2015, so a family of four in this category has to survive on $21,360 or less per year.
While that’s a steep drop, the study’s authors and sponsors point to a big change in federal housing policy and the bankruptcy of a long-time OTR real estate player as a major culprit, something that sent shockwaves through the neighborhood before developers like Cincinnati Center City Development Corp. arrived to rehab buildings.
At the dawn of the 21st century, the U.S. Department of Housing and Urban Development made a radical change. Instead of sending low-income renters to neighborhoods with designated buildings for subsidized housing, it gave those eligible a voucher that they could take to a landlord at the location of their choosing who would accept it.
Hart Realty in Over-the-Rhine owned hundreds of such units and had benefited from the old system. Its late owner, Tom Denhart, was one of the biggest site-based low-income housing landlords in the United States.
Through a combination of poor communication from Hart Realty that they could stay if they turned over their vouchers, a desire to move elsewhere with better housing and confusion about the new system, 1,000 units in hundreds of buildings were left vacant in one fell swoop.
“He (Denhart) was a classic dinosaur,” said Liz Blume, director of the Community Building Institute, a former city planning director and the principal author of the 2002 OTR Comprehensive Plan. “Technically residents could have stayed. Now they could go anywhere they wanted. Almost everyone who had a voucher left.”
Hart Realty went into bankruptcy in 2001. As they were sold over the years, Denhart’s properties often ended up vacant or in the hands of market-rate developers.
“The ripple effect of that loss is still in play in OTR, and there is significantly less affordable housing for low-income households,” said Mary Burke Rivers, executive director of Over-the-Rhine Community Housing, in a news release on the study.
That doesn’t account for all of the loss of homes for the poorest of the poor, Blume said.
Other units went off the market because of their poor condition. Private developers bought others and converted them to housing for people with higher incomes.
Some of the units that are left were developed by Over-the-Rhine Community Housing, the Cincinnati Center City Development Corp., the Model Group and others, Kaup said.
“Model Group will buy a building that has real low income housing. They’ll take 30 bad apartments and turn them into 18 nice units,” Kaup said. “Some of the residents come back. The people have better quality of life. They have better housing. But when you look at sheer numbers, the numbers work against us.”
While there is less housing for the poorest of the poor, 39 percent of OTR housing is subsidized or restricted by income.
Most of the housing in the neighborhood is affordable for families making less than the area median income. HUD bases its figures on the belief that people should spend 30 percent or less of their income on housing. The study found that:
6 percent, or 253 units, are affordable for families making more than 100 percent of the area median income. Examples within this category include a single person living in a studio who makes $50,000 a year, a single-wage couple with two kids who live in a two-bedroom apartment making $31 an hour or a family of four in a three-bedroom unit making more than $75,000 a year.
26 percent, or 1,054 units, are affordable for families making 61 percent to 100 percent of the area median income. Examples include a single artist in a studio making $29,940, a couple with three kids in a three-bedroom making $45,000, a middle-aged couple with four children in a four-bedroom unit making $70,000 a year or a single professional in a one-bedroom apartment making $53,000 a year.
46 percent, or 1,864 units, are affordable for families making 31 percent to 60 percent of the area median income. Examples include a young couple with one child in a two-bedroom apartment where the father earns $10 an hour, a retired couple in a one-bedroom apartment that gets $24,280 from Social Security, a single professional who lives in a one-bedroom and makes $32,000 and a family of four in a three-bedroom earning $44,000.
22 percent, or 869 units, are affordable for families making 0 percent to 30 percent of the area median income. Examples include a single person in a studio apartment with no income, a single mother with one child living in a two-bedroom apartment making $9 an hour and a couple with two children in a three-bedroom apartment making $22,000 a year.
More housing on the low-end of the income scale could be coming, Blume said, because the federal incentives for it are greater.
OTR leaders view the study as a benchmark and a way to guide future development. OTR Community Council President Ryan Messer wants to see more workforce housing where middle-class people, many of whom work in the neighborhood, can live.
There are 5,229 housing units in the neighborhood with 1,189 vacancies.
City incentives and the availability of tax credits on projects could shape how economically diverse the neighborhood ends up, said Messer, who has developed projects in the neighborhood.
If a building costs $150 to $200 a square foot to renovate, “from a cost standpoint you can’t rent it to somebody for $500 or $700 a month.”
“We have about 23 percent still empty. It is going to be important for us to be very deliberate with what happens to those buildings,” Messer said.
The study did not count former offices and churches that could be converted or vacant land where new construction could occur, Blume said. She estimates OTR could see a maximum of 3,000 housing units built out before the neighborhood settles.
“The transition is happening quickly,” Blume said. “The next two to seven years is going to really determine what the ultimate mix of the neighborhood is going to be.”