CINCINNATI — If you take a drive around Cincinnati, you’re likely to pass multiple new housing developments under construction. Some include affordable units; others don’t.
And as the new units go up, the cost of living in the neighborhood can go up, too.
“I mean, it’s kind of a rough situation,” said Steven Klayer.
Klayer knows first hand what it’s like to struggle to find an affordable place to live. He remembers moving around multiple times, often with several roommates, and each time scraping the money together for an apartment.
“Regular apartments, obviously security deposits and things like that, you’re essentially paying three months rent up front just to move in. If you can even afford that to begin with,” said Klayer.
He said he had a job; sometimes two jobs. And still, “It’s just simply not enough to sustain the pricing. So affordable housing allows you to not be homeless, which allows you to not worry about having a place to live. It allows you to save more of your income in case an emergency happens.”
“My car was one breakdown away from me not knowing which bill I wasn’t going to pay that month,” said Klayer.
Klayer is now a homeowner, which he attributes to the time he spent living in subsidized housing. It allowed him to save money and get a loan for a mortgage.
All of this is why he said he supports the affordable housing charter amendment, or Issue 3, on the May 4 ballot.
“Investing in your community absolutely pays for itself,” he said.
WHAT IS ISSUE 3?
If passed by voters, Issue 3 would require the city of Cincinnati to create a new affordable housing trust fund. That fund would be used solely for the purpose of increasing and preserving affordable housing in Cincinnati, while also investing to prevent the displacement and loss of affordable housing.
The city would be required to allocate a minimum of $50 million annually into the fund. State or federal funding cannot count toward the $50 million. Half of the funding must be used for housing that is affordable to those making at or below 30% of the current median household income for Hamilton County. That’s about $17,163. And all funds must be used for housing affordable to those making at or below 60% of the median household income in Hamilton County. That’s $34,327.
Funding can be used for new construction, renovating vacant property or renovating existing affordable units. A board of 11 members will oversee the trust fund. Those members will include people appointed by various affordable-housing advocates.
Klayer said this type of investment in affordable housing, and those who need it, will benefit the entire community.
“I’m an example of that. Me, my fiancee and my daughter now have our own house and contribute to rather than take from the affordable housing market. I don’t see a downside,” he said.
But others say there are major downsides.
Matt Alter is president of Local 48, which represents Cincinnati firefighters. He said if Issue 3 passes, there will be “catastrophic cuts to the fire department."
POTENTIAL BUDGET CUTS?
That’s because, according to City Manager Paula Boggs Muething, if this passes, the city will need to cut 13% of its general fund budget to pay for it.
She estimates $13.8 million will be cut from the police department, accounting for the layoff of 75 sworn officers; $4 million from public services, with trash pickup switching from weekly to bi-weekly; $4.5 million cut from the Cincinnati Recreation Commission, including the closure of 12 to 15 pools and nine recreation centers.
And, among other cuts, a $6.25 million cut to the fire department, which includes rotating brownouts of three engine companies. A brownout is a temporary closure of a fire department or fire house to save money.
“The problem with that is, you’re playing a game of Russian roulette. We don’t know where fires are going to happen. We don’t know where a cardiac arrest is going to occur… we just don’t know,” said Alter.
Alter said a fire doubles in size every 30 to 60 seconds. And, if the closest fire station is browned out, the added seconds it could take for a crew that is further away to respond could mean the difference between life and death.
“What price do you put on a life? It’s too late when a fire company is closed and we weren’t there and we said, ‘if only, if only. That’s not what we intended.’ It’s too late,” he said.
“That is an incredible cut. And the size of that would be catastrophic. And some departments would be eliminated,” said Boggs Muething.
The City Manager has called this charter amendment an “unfunded mandate.”
The amendment lays out four possible funding sources to meet the $50 million requirement, most of which the city has shot down.
- Revenue generated from the lease or sale of the Cincinnati Southern Railway; the city said this is prohibited by law.
- A fee charged to developers of residential projects that include four or more units and all commercial or non-residential projects; the city said this would likely result in a lawsuit for an unconstitutional tax.
- A personal income tax on the award stock options in publicly traded companies; the city said this is prohibited under state law.
- The city’s general fund operating budget.
Based on the criteria, the City Manager said the only option is the general fund budget, which means massive cuts.
“Most places that have done this have had some sort of income tax or property tax. Some sort of revenue stream. I think, to be fair, there could be a dedicated revenue stream, but it must be passed through referendum,” she said.
That sentiment is shared by Mayor John Cranley, who believes the charter amendment is deceptive.
“$50 million out of a $400 million budget is an enormous amount of money that will come at the expense directly of public safety of the people of Cincinnati,” said Cranley. “So if they really believe that what they’re proposing is an appropriate use of city government, taxpayer dollars, why aren’t they proposing a tax to pay for it?”
Advocates of Issue 3 have argued that the charter amendment in no way states that the city must cut its budget.
ADVOCATES ON THE FUNDING OPTIONS
“The Issue 3 charter amendment does not specifically say that anything needs to be cut. And it doesn’t require anything to be cut,” said Josh Spring, executive director of the Greater Cincinnati Homeless Coalition.
He believes this argument is a scare tactic by city leaders.
“Shortly after the Board of Elections confirmed that we had enough signatures to be on the ballot, the City Manager sent a memo out to all city employees saying essentially we don’t have the money for this. If this passes your jobs will be in jeopardy. And that must’ve been scary for city employees,” he said.
But, Spring noted that an increase in revenue would prevent that from happening.
Two ways to do that— which are proposed in the amendment— include an impact fee on developers and using money from the Cincinnati Southern Railway. Neither, he believes, are against the law as the city administration claims.
For the impact fee, Spring pointed to an explanation from the city itself.
In a presentation to city council, the Deputy City Solicitor wrote that in order to charge developers an impact fee, “We’d have to prove that the creation of new housing is causing a lack of affordable housing in Cincinnati.”
Spring argued the city should be able to do that. And that other cities do in fact charge this fee.
“The real common sense look at it is if numerous cities across the country have figured out how to do this, have been sued and won, and figured out how to do it, we’ve got to have the smarts here to figure it out,” said Spring.
As for using funding from the sale or lease of the railway – which the city said is illegal – Spring points to a contribution the city made in February 2019 to the existing affordable housing trust fund of $700,000 from Cincinnati’s Norfolk Southern Railroad.
“The fact is, in December of 2018, when we got the trust fund finally created by ordinance, shortly after that the city council put a small portion of money, a one-time payment, in the trust fund that came from the railroad. So what they’re now saying is illegal, they were holding a press conference celebrating three years ago. So we’ve already done it,” he said.
He agreed that it’s unclear if the stock option proposal is legal.
When it comes to suggesting a tax increase, Spring noted that those behind the amendment did not feel that was the right way to go about this. But, if city council felt that was the only way to save the budget, council could’ve put it on the ballot.
“While we believe that’s not the ideal place, the fact is with a six-person vote… city council could’ve put the earnings tax on the ballot,” he said. “They can do exactly what they’re saying. So you have to say, so why aren’t you just doing that? Why bring it up when you can do it?”
Aside from the issue with funding, the City Manager also takes issue with the fact that the amendment sets no time limit. And, the board that will oversee the funding is not accountable to city hall.
She believes an initiative passed by City Council in mid-April is a better path forward.
“That’s the path forward. The most responsible path forward that does not require cutting basic services. It is a significant amount of money into a loan pool that would help to finance the affordable housing,” she said.
The program creates a HUD-funded loan pool to fund affordable housing. The city plans to leverage up to $34 million from HUD, plus $1.5 million it already has, to fund the loan pool. The mayor will appoint a board to oversee the pool. And, the nonprofit Cincinnati Development Fund will manage it.
This is entirely separate from the charter amendment.
Election Day is May 4.