CLEVELAND — Developers hope to break ground before the end of 2021 on the first 12 units of a 42-townhome development in Buckeye-Shaker across the street from the former St. Luke’s Hospital. The total cost of the project is a little more than $10 million and will be completed in phases.
The new buildings will go up right next to Barbara Lackey’s apartment in a row of new homes built a little more than a year ago. She says her mother lives in St. Lukes Manor, the independent living community for people 55 years old and up.
“When I used to come and visit, all this was just dirt,” said Lackey, pointing to the area where her apartment is and where the townhomes will eventually be built. “All of this was just dirt and there was nothing else around.”
Keystate Homes’ Business Development Director Andrew Gotlieb has been interested in building on that land for years.
“The question was home value,” said Gotlieb. “How were we going to be able to sell a project in a neighborhood where we were uncertain of what the home values were on the resale.”
The Project
The answer is a 42-townhome project with units scattered across grass lots. Gotlieb and his business partner, Danny Glimcher of Glimcher Capital Group, say the way to make it work was to cut into the profit they’d make on the project and finance it themselves. The traditional model to finance a project like this, with investors who would expect high returns, wouldn’t work if the project was going to remain affordable.
“What we wanted to do was do this in a way that would displace no one from the neighborhood,” said Glimcher. “Someone who is paying rent there now can own this instead.”
The homes are slated to sell for about $240,000, which is a little more expensive because of COVID-related cost increases for construction materials. Gotlieb says the townhomes will be “Net-zero ready,” meaning that it’s energy-efficient and could offset its energy consumption with the addition of renewable energy upgrades. In this case, Gotlieb says solar panels would make the homes completely Net-Zero.
They’ll also have thicker walls and more durable siding materials than typical construction projects, helping save residents on their utility bills.
With local programs around University Circle to help homeowners with down payments, Glimcher says buyers could live in the new homes with a roughly $800 monthly mortgage payment.
Community Impact
Bianca Butts is in the market for a new home right now and she wants to live in the east side community where she grew up.
“Buckeye’s time is now,” said Butts, who also works at Burten, Bell, Carr Development, which is a non-profit community development corporation on the east side that tries to build up the community historically held back by redlining and discrimination.
Projects like these townhomes might not undo generations of inequities, but they’re a step in the right direction.
“Like you said, it doesn’t correct it but what it does do is offer market-rate housing in a neighborhood that some might automatically assume is low-income housing,” said Butts.
“I like to call what’s happening: The Buckeye Renaissance,” said Burten, Bell, Carr Director of Neighborhood Planning and Engagement Dawn Mayes.
While hundreds of millions of dollars have already been invested in other Greater Cleveland neighborhoods after the housing crisis, Buckeye-Shaker generally hasn’t seen much of that attention until recently. Butts points out much of the groundwork was going on behind the scenes, but this is one of the first projects to come to fruition.
“It allows people that want to stay here that are renters to purchase,” said Mayes.
This project isn’t alone.
Habitat for Humanity is building 40 homes nearby after local religious leaders identified 70 properties that were dangerous to the community and got many of them knocked down.
The nearby Woodhill Transformation Plan was recently awarded $35 million from the U.S. Department of Housing and Urban Development to renovate public housing nearby.
Butts says that shows that people at all different income levels can and should live near each other and that everyone benefits when they do.
“I shouldn’t have a different grocery store than the person who makes $50,000 more than me,” said Butts. “I shouldn’t have access to separate schools or transportation amenities.”
The proximity to Greater Cleveland RTA Rapid stops and Shaker Square mean residents will have access to nearly every business and amenity they might need even if they have limited or no access to a vehicle.
Building Equity
The key to maximizing positive community impact is the fact that new homeowners will instantly gain wealth by buying the homes. Glimcher estimates that the homes are actually worth more than the roughly $240,000 they’ll sell for, instantly making the investment profitable. But building new housing stock is unique as well.
“When [developers] do ‘affordable homes’ today, they’re talking bout doing affordable market-rate apartments,” said Gotlieb. “For us, we wanted someone who could build the equity, the ability to move up in life, create wealth within their home and do something with it if they want to in the future.”
In affordable apartments, say Gotlieb and Glimcher, tenants simply pay less rent and get limited value back each month.
“People just ended up getting cheaper rent so they were just maintaining the bare minimum status quo of life,” said Glimcher.
With a more attainable path to homeownership, renters like Lackey could one day own land in a place where that wasn’t always possible.
“It’s great to know we can have the opportunity to live the same way as well,” said Lackey.
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