Cleveland is proposing sweeping development efforts in the historically redlined East Side neighborhoods of Hough, Central and St. Clair-Superior.
Using a suite of economic development tools, including waived permit fees for new construction, modernized zoning codes and a new tax increment financing district, the city plans to put millions toward spurring new housing, businesses and walkable communities in neighborhoods that have been challenged by decades of disinvestment. Cleveland officials are referring to the area as a Housing Innovation District.
"When we think about the Housing Innovation District, it's 'How can we create an area that really incentivizes people to bring new housing,' but [also] really builds wealth block by block in the neighborhood for the existing residents that are here," Tom McNair, the city's Chief of Integrated Development, told reporters in St. Clair-Superior on Wednesday morning. "Because St. Clair Superior, Hough, Central: these are amazing neighborhoods that for far too long haven't gotten the type of investment they deserve."
Data shows about about 43% of residents live below the poverty line in Hough; 38% in St. Clair-Superior; and 70% in Central.
Here's the breakdown of the plan for the district.
City partners with philanthropic organizations for new builds, home repair
The city is proposing a $750,000 investment that, in tandem with funds from the Jack, Joseph and Morton Mandel and Cleveland Foundations, would construct 20 new stick-built and modular homes on city-owned vacant lots on East 65th and East 67th streets. It would also support home repairs for 10 existing homes near the new builds and renovate two storefronts in the target area.
"The reality is looking at what homes can appraise for today in this market versus what they cost to build," McNair told reporters. "And so the dollars that we have are going to both go into helping write down the cost of that construction, but we're also setting aside dollars for home repairs for the residents that are on the street where the new construction is going because we want to ensure that again they are a part of — and feel a part of — the growth that has happened."
But some residents fear displacement in the face of potentially rising property values.
"Why should I be displaced?" one woman said at a public comment period during city council's Development, Planning and Sustainability Committee hearing Tuesday. "Just so you can come in and make money. If my property ain't beautiful enough, then give me a loan where I can fix it. ... You want to improve it, you improve it for the people there."
City officials at the meeting assured her that they do not plan to push out residents or demolish any existing homes. McNair insists the plan, which includes a zoning overhaul, will not only attract people to the neighborhood, but help those who already live there.
The district includes more than 2,800 vacant lots, McNair said.
"There's a lot of room for people to move in without forcing anyone out," he told reporters Wednesday. "Simultaneously, I think we mentioned looking at things like land trusts so that we are making permanent affordability within this neighborhood. We're going to be working with a lot different partnership organizations for folks that are currently in their homes."
Councilmember Charles Slife isn't sold on the plan. At Tuesday's committee hearing, he said he's weary of the partnership with the philanthropic organizations, alleging they plan to "cannibalize" the neighborhood community development corporations.
"This is a part of the town that is chronically under-invested. However, [the Mandel and Cleveland foundations'] tenor in prioritizing investment here is, I believe, to cannibalize the CDC ecosystem citywide and to make large parts of the city not have access to the types of organizations that keep things moving while we make certain efforts elsewhere," Slife said. "I have no faith right now in philanthropy."
He said he is unsure if he will support the legislation if the city partners with the foundations.
Proposed tax increment financing district to generate at least $90 million for neighborhoods
The city is also proposing a tax increment financing district for the 1,500 acre-area.
A TIF is an economic development tool that temporarily captures increases in property values to reinvest back into a project. That means that the city essentially freezes property taxes on the date a TIF is passed — excluding taxes to schools — and temporarily forgoes that money to put back into the TIF project. At the end of the TIF's lifecycle, the city collects what are typically higher property taxes after decades of investment.
Unlike traditional TIFs, which are used to help finance a specific building or project, TIF districts reinvest all the property tax increases back into public infrastructure. Within the Housing Innovation District, all TIF revenue generated for the next 30 years would support roads, streetscapes, public parks and more.
"It's a mechanism that really allows us to reinvest growth directly back into these neighborhoods," said Taylor Jones, a senior advisor in the mayor's office. "This is not about taking resources away from the community; it's about creating a new structure where the new value that is generated within the district helps fund the infrastructure and improvements necessary to sustain long-term neighborhood growth."
McNair estimates the TIF district could generate between $90 million and $245 million for those neighborhoods over 30 years.
In 2024, the city established its first TIF district downtown. That "Shore-to-Core-to-Shore" district will support the city's development of the riverfront and lakefront over the next three decades.
Simplified permitting and rezoning will make it easier for developers to build, city says
The last piece of the puzzle is administrative changes that McNair said will attract developers and bring walkability to the communities.
The city will waive permit fees for new single-family home construction in the Housing Innovation District and streamline the permitting process. Multifamily home permits will be reduced by 50%.
Officials also want to implement form-based code to allow for more mixed-used development to more easily repurpose vacant buildings into restaurants and retail. Those zoning changes would also allow various housing typologies for residents or developers wanting to add units like duplexes and bungalows.
"A large motivation behind this rezoning is to benefit the existing residents in the neighborhood," said Calley Mersman, the Director of City Planning. "We know that our existing zoning code is cumbersome doesn't work for the types of improvements, repairs, insurance that people need for the homes that they own ... It's about preserving residents who are there and want to stay there."
Leonard said the zoning changes will also preserve the original identity of the neighborhood.
"This sort of touches on the themes of nostalgia, preserving the culture, the history of neighborhoods as well," she said. "This rezoning aligns what we say we want with the historic built form of the neighborhood in a way that does allow residents to come through our processes as smoothly as possible."
The administration is also adding an amendment that would prohibit building data centers within the Housing Innovation District.
What's next?
Council members at Tuesday's development, planning and sustainability committee meeting were largely supportive of the proposal.
"We have to start somewhere, and I wanted to people like we can start here in our community," said Councilmember Stephanie Howse-Jones, whose ward includes much of the Housing Innovation District. "Because the devastation is just a lot, and we need real solutions to be able to move together to create a Cleveland, to create a St. Clair-Superior and a Hough that community members deserve and that they want."
The proposal passed through committee for its next stop in the Finance, Diversity, Equity and Inclusion Committee before its final vetting and passage by the full council.
McNair said he expects the proposal to pass at council's final meeting before summer recess on June 1.
After passage, McNair anticipates breaking ground on some projects, including some of the new home builds, this summer.
