Cleveland’s growing home sales AND homelessness

Homelessness in a booming housing market? It’s happening in
Cleveland, with the contrast no more stark than this location.
Across West 25th Street in Ohio City from St. Malachi Center,
which serves many homeless citizens, is The Quarter luxury
apartment complex. There will be affordable housing added
across Detroit Avenue, but more needs to be done in the
Greater Cleveland area to find a balance between a booming
residential market and a spike in homelessness (Google).

There is an incredible story playing out among the spreadsheets and city streets in the Cleveland. On the data side, real estate market observers are watching a remarkable rise in the number of housing sales and prices in the City of Cleveland. At the same time, social service organizations and agencies are witnessing a sad downside — worsening homelessness — that needs to be addressed very soon, preferably before another cold winter sets in.

First, consider the rate at which housing is being sold in Cleveland. It is increasing over the number of 2017 sales transactions at a pretty large clip, according to the Cuyahoga County Fiscal Officer‘s office. And it’s being sustained from month-to-month, making for a hot spring/summer in the local real estate market:

July 2017 – 723 homes sold
July 2018 – 888

June 2017 – 828
June 2018 – 883

May 2017 – 742
May 2018 – 831

Apr 2017 – 691
Apr 2018 – 742

This doesn’t include housing rentals. Just sales. And, as we know from all the construction/renovation projects around town, the apartment market is growing pretty quickly too while sustaining high occupancy numbers according to public- and private-sector sources.

Furthermore, I’m noticing a lot more $200,000+ houses selling in Cleveland too. I check property transactions each month to look for any anomalies and that’s one that has stuck out at me in recent months.

In years past, I used to see the usual multi-million-dollar sales of downtown buildings and industrial properties, then it would drop off to $100,000-$150,000 houses and lower. Now there’s up to a page (with 100 transactions per page) of houses selling for $200,000+ per month.

Considering this anecdotal evidence and the property revaluations being done by the county, especially on Cleveland’s west side where property values have gone up by more than 10 percent in the past year, school officials are probably grinning a bit more these days. Real estate taxes comprise a bulk of public school funding in Ohio districts, with their inside/charter millage (up to 10 mills) and any new or replacement levies able to capture revenue from these increased property values.

Unfortunately, I’m also hearing more about low-income working people losing their homes as they get evicted/priced out of neighborhoods. While Cleveland keeps adding to the high-end supply of housing, little progress is being made to add to the affordable housing stock. There is a lot of substandard housing in Cleveland which doesn’t meet basic housing codes and cannot be legally rented.

The Metanoia Project reports a 20 percent increase in the Cleveland-area homeless population in the last year. The Metanoia Project is a nonprofit organization that provides assistance to the homeless and is based at the St. Malachi Center in Cleveland’s Ohio City neighborhood.

Metanoia says evictions are way up in the city of Cleveland. The working poor population is growing and poverty is on the rise. Rent has become unaffordable for many people, especially single mothers with children. Minimum wage cannot support market-rate rental housing. Evictions are creating a rise in homelessness. It is creating a crisis in Cleveland and Metanoia is scrambling to find shelter space for single people and families. Every overflow shelter is now beyond capacity, the organization reports.

A small homeless camp is growing on the closed pedestrian
bridge over the lakefront railroad tracks next to Cleveland’s
First Energy Stadium (Ken Prendergast).

Another source, who wishes to remain nameless because he isn’t authorized to speak for his employer, said that, while low wages are the primary reason for rising homelessness, the tight housing market is also a big factor.

“Many people who had been renting their houses after the meltdown are finally comfortable with selling since prices have risen,” he said. “In South Euclid, the number of rental units has decreased by 4 percent so far this year. The former tenants have to go somewhere, but with a shrinking supply, rising rent prices and stagnant wages, they getting pushed out.”

Unfortunately, many tenants end up falling into bad situations with bad landlords and subpar housing conditions. When a tenant complains about the condition of their housing unit, some are evicted. Too many tenants don’t know their rights and don’t fight the evictions. Once they have an eviction on their record, the working poor get stuck in a vicious cycle of going from one bad landlord to another.

Some would-be tenants get extorted out of extra money for repairs that are not their responsibility, or for higher deposits/down payments in order to be accepted with an eviction on their records. Another scam is the landlord doesn’t pay their property taxes or mortgage, then tenants get evicted when the property is foreclosed on. The result is many former renters being pushed out of the market entirely when they should be able to afford a home.

To address this worsening situation, municipalities and Community Development Corporations (CDCs) in Cleveland are increasing their education efforts for tenants (and landlords too) as to what their rights and the laws are. In the long-term, employers need to pay more to their workers and communities need to build more affordable, quality housing to address shortages. The new housing should be located near employment nodes and/or near high-frequency public transportation routes to improve the region’s poor linkages between residents and jobs.


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