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While hundreds of apartments go up in Cleveland, DCA pushes for more 'for sale' properties

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Posted at 9:29 AM, Feb 11, 2020
and last updated 2020-02-11 17:50:53-05

CLEVELAND — The real estate boom in downtown Cleveland that's bringing hundreds of new apartments overshadows one key fact: there are very few townhomes or condos to buy in that growing neighborhood.

Even a two-story apartment with a private rooftop can't help downtown resident Eric Kettani escape one key fact.

Warehouse District, Cleveland
Eric lives in the Warehouse District, a short walk to Public Square, but in a part of Cleveland where there are very few options to buy townhomes or condos.

"I'm spending all this money on rent and I'd rather spend it on a nice mortgage," said Kettani.

Kettani is paying more than $2,000 a month in rent and he's been looking for a place to buy for more than a year.

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PHOTO: New construction downtown means there's a growing population of downtown residents, including people with children.

"It's difficult," said Kettani, referring to his search. "Real difficult."

The Downtown Cleveland Alliance (DCA) says there are 7,028 apartments downtown right now with hundreds more under construction. At the same time, there are fewer than 487 townhomes and condos for sale.

A 2018 DCA Housing Study showed that "While there are signs of a strengthening Downtown’s for-sale market, Downtown Cleveland’s homeownership rate of 5.1% is extremely low compared to the average rate of 22.7% noted the comparison downtowns."

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New construction in downtown Cleveland is bringing hundreds of apartments to the market but very few "for sale" properties.

To help, DCA tells News 5 that:

  • DCA is particularly interested to explore the following policy recommendations further: Continuing to leverage current and existing tools like Historic Tax Credits, Conservation Easements and Tax Abatements to attract developers and residents
  • Initiating the dialogue necessary to launch a home rehabilitation subsidy program that supports smaller developers in the rehabilitation and sale of market-rate housing in adjacent neighborhoods, such as the Homeownership Rehabilitation Program in the City of Philadelphia in the 1990s to 2000s; and,
  • Creating a home ownership incentive program with public and private partners that will benefit residents, employees, and employers throughout the Center City housing market, potentially as mirroring the success of the University Circle Greater Circle Living Program

DCA President and CEO Joe Marinucci says he knows it's a weakness in the market.

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Bo Knez's The Avenue Townhomes are one of the only "for sale" properties being built in downtown right now.

"This [for sale] product, of course, means that they're going to be here longer-term," said Marinucci. "They get more invested in the neighborhood, there's more equity in their decision."

Marinucci says more equity would keep residents longer, cutting down on the turnover in downtown apartments, building a better sense of community downtown.

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Workers put the finishing touches on The Avenue Townhomes ahead of residents moving in as early as this week.

The barrier though is often how buyers have to pay for that "for sale" property.

"They're available, they're there, you just have to be a specific style buyer," said Senior Vice President at Trivisonno Real Estate Team David Preseren.

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Knez says a big part of building The Avenue had to do with its proximity to Cleveland's downtown, sports stadiums, and entertainment district on East 4th Street.

Preseren says condos and townhomes often don't qualify for the same loans home-buyers can use to buy a house, so buyers need more money up front.

Those high prices are at least partially due to limited land and a high cost of construction.

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Brickhaus Partners' 95 Lake, located near Edgewater Park, is one of the closest "for sale" projects to downtown.

"It may change in the future but at this time it's very expensive to go vertical," said Knez Homes Founder & President Bo Knez.

Knez is building one of the only "for sale' projects downtown. The Avenue will create 39 units along Superior Avenue and East 12th Street and are going for about $500,000.

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Brickhaus is working on 700 Lake in Rocky River, bringing a mix of condos and townhomes right on Lake Erie.

The only other option to buy is in Cleveland's inner ring suburbs where Brickhaus Partners Developer Andrew Brickman says business is booming.

"Instead of looking for the traditional single-family house and all the maintenance that goes with it, [buyers are] looking for no maintenance type living where they can just lock it and leave it," said Brickman.

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The land at 700 Lake is being prepped for construction, which could start as early as March 2020.

Brickhaus has already put up a string of townhomes and condos on the Cleveland/Lakewood border, in Beachwood and Rocky River with new projects coming in Ohio City and right along Lake Erie.

The next project, 700 Lake, is expected to break ground soon with condos and townhomes starting at $700,000.