^Looking at the graphic above 2007 seems to be an outlier in the city of cleveland--a plunge from 45k to 18k. Is 2007 accurate or the story before the great recession--in which case a few years before 2007 would be very useful to tell a better story vs leaving the reader wondering if an error is at play.

Cleveland's subprime crash happened a bit earlier than the general 2008 recession that is talked about nationwide.  We were arguably already in that recession in late 2006, without ever having seen the early-mid aughts boom that a lot of the country experienced.  It was a total lost decade here.

A comment from an out-of-towner...

 

 

Great article in Scene about of Holton Wise (and other predatory investors/managers). Includes quotes from incoming Cleveland Building/Housing Director Sally Martin (and myself) regarding our work in tackling this issue in South Euclid.

Quote

Holton-Wise, a Flood of Covert LLCs and Out-of-State Investors Have Radically Changed the Local Housing Market. Is There Anything Cleveland Can Do to Fight Back?

Posted By Mark Oprea on Wed, Jan 26, 2022 at 10:24 am

 

Last summer, in the midst of his mayoral campaign, Justin Bibb walked up the front stairs of a dilapidated house in Detroit Shoreway to a podium. Behind him stood Jay Westbrook and Bob Render, two housing policy advocates, and a party of volunteers in white shirts reading “BIBB!” Nearby there were two other shirts, one emblazoned “SLUMLORD” and the other stamped “I ♥ EVICTIONS.”

“We are here today on the footsteps of 7911 Eve Ave., one of the homes managed by Holton-Wise Property Group,” Bibb said. “Holton-Wise has used redlining maps to help investors continue to exploit these communities. It is frustrating, and it sickens me to the core. For years, Holton-Wise has run rampant in our city, buying up properties from Glenville to Cudell. And nothing, not a darn thing, has been done to stop them.”

 

[...]

 

Less than 48 hours later, James Wise, the co-founder of Holton-Wise, had already made a video response to Bibb on the company’s YouTube channel. He labeled Bibb a “socialist asshole,” and framed the candidate’s support of Issue 24—which gave civilians more oversight of police —as an “anti-cop, pro-crime, -socialist, -communist agenda.”

 

https://www.clevescene.com/scene-and-heard/archives/2022/01/26/holton-wise-a-flood-of-covert-llcs-and-out-of-state-investors-have-radically-changed-the-local-housing-market-is-there-anything-cleveland-ca?utm_source=feature&utm_medium=home&utm_campaign=hpfeatures&utm_content=HomeTopFeature

This is really great reporting.  Puts anything you find in the current PD to shame.

13 hours ago, PoshSteve said:

Great article in Scene about of Holton Wise (and other predatory investors/managers). Includes quotes from incoming Cleveland Building/Housing Director Sally Martin (and myself) regarding our work in tackling this issue in South Euclid.

https://www.clevescene.com/scene-and-heard/archives/2022/01/26/holton-wise-a-flood-of-covert-llcs-and-out-of-state-investors-have-radically-changed-the-local-housing-market-is-there-anything-cleveland-ca?utm_source=feature&utm_medium=home&utm_campaign=hpfeatures&utm_content=HomeTopFeature

Question: where do I report a house that is an unregistered rental in Cleveland? 

16 hours ago, downtownjoe said:

Question: where do I report a house that is an unregistered rental in Cleveland? 

I'm not fully aware, since I don't work for Cleveland, but I would imagine you should be able to call/email the Building/Housing Dept. I would recommend including the name and address of the owner too, if you have that info. If you don't have luck with that, your councilperson or CDC may be able to investigate or escalate it for the time being.

Yes, file a complaint. Use the complaint intake form at https://www.clevelandohio.gov/CityofCleveland/Home/Government/CityAgencies/BuildingHousing/FormsPublications

Provide as much location information as you can about the property.

 

Then select "residential" occupancy, select "illegal operation" and then provide more information about what the violation is (unregistered rental).

 

 

On 1/26/2022 at 11:40 AM, PoshSteve said:

Great article in Scene about of Holton Wise (and other predatory investors/managers). Includes quotes from incoming Cleveland Building/Housing Director Sally Martin (and myself) regarding our work in tackling this issue in South Euclid.

https://www.clevescene.com/scene-and-heard/archives/2022/01/26/holton-wise-a-flood-of-covert-llcs-and-out-of-state-investors-have-radically-changed-the-local-housing-market-is-there-anything-cleveland-ca?utm_source=feature&utm_medium=home&utm_campaign=hpfeatures&utm_content=HomeTopFeature

 

I've also done some mapping for Jayme w/OBCDC and huge credit to her for keeping an eye on LLC's, Bulk Buyers, and slumlord properties in the CDC. Hopefully with Ms. Martin in CLE, some things can be done about it other than just keeping tabs on them.

 

7 hours ago, GISguy said:

 

I've also done some mapping for Jayme w/OBCDC and huge credit to her for keeping an eye on LLC's, Bulk Buyers, and slumlord properties in the CDC. Hopefully with Ms. Martin in CLE, some things can be done about it other than just keeping tabs on them.

 

Jayme is awesome and I've loved working with her. She's super passionate and a great asset for OB.

13 hours ago, KJP said:

 

Wall Street owing a bunch of homes?  What could go wrong?  🙄

 

Not sure if this is a good thing or not 

 

 

8 minutes ago, KJP said:

Not sure if this is a good thing or not 

 

 

I don't think this is good. I'm looking at the Cleveland map and I'm kinda worried. 

9 hours ago, freefourur said:

I don't think this is good. I'm looking at the Cleveland map and I'm kinda worried. 

Totally.  Seems like another 2008-like crisis in the making. 

Are these homes being rented or flipped?

26 minutes ago, Cleburger said:

Totally.  Seems like another 2008-like crisis in the making. 

The bubble popped in 2008 (or earlier) due in part to homeowners inability to refinance out of ARMs which reset to incredibly high interest rates or balloon payments, as well as the instability in major financial institutions caused by investments in credit default swaps (among other things). What trends are you seeing now that indicate a similar level of instability or "buble?"

 

I am personally worried about the amount if investor properties, because it's deleterious to personal home ownership. I am also worried about the artificially low interest rates, because they allow people to "afford" monthly payments on homes whose overall price would have historically been out of their price range. This, in my opinion, is a major reason for the housing price inflation. I however, do not believe either issue is causing a bubble.

14 minutes ago, Balkmusic said:

 What trends are you seeing now that indicate a similar level of instability or "buble?"

A housing "Buble"?  🤣🤣

 

In all seriousness, I'm not currently studying this.   It was more my reaction to the map of the data, showing most of these investments going into poor eastside neighborhoods--the same ones that suffered brutally after the 2008 collapse with foreclosures.    If the market tanks (not that this ever happens), or the major investors declare bankruptcy and dump their assets (not that this ever happens), these areas would be devastated for a second time in 2 decades.   

 

46 minutes ago, Ineffable_Matt said:

Are these homes being rented or flipped?

 

Rented. Very rarely once a house gets into this does it become owner occupied again.

 

This has been going on for years and years, but the scale of it has been increasing over the last few years as investors become flush with cash and desperate to find a place to park it. We are lucky if there is any improvement to the houses above a new coat of paint. The most frustrating part from my own experience in housing is contact with the property owners. As Sally said in the article, this causes alot of trouble for the tenants, but it also causes alot of trouble for the neighborhood at large. Code/health violations often times then go without being corrected, as the city doesn't have anyone to serve directly. If Cleveland can change to where they can then serve the property managers as well as the owner (Like South Euclid and other cities do), that will help.

Anyone have insights or recommendation for a good mortgage refi company? 

 

My current mortgage is with Chase, I'm sort of ambivalent about sticking with them. Thought about going local but reviews for Cross Country were not great, and nobody on earth seems to like Quicken/Rocket lol.

 

Any help is much appreciated! 

A thread on the upcoming expiration (renewal?) of Cleveland's tax abatement policy

 

 

In general l was a big believer in tax abatement for the city in the beginning. Much of the housing construction over the last couple of decades has been the beneficiary. I'm not sure what percent would not have been built but l think it would have been pretty high. 

 

Just when l think we have created enough momentum to get new housing built without the abatement we have entered into a period of higher interest rates. Obviously that will slow down construction. So because of that l'm still in favor of keeping the abatement or at the least beginning a wind down. 

I could see the timeframe of the program decreasing from the current 15 years, maybe to 12 or 10. Or perhaps a tiered system where certain zip codes are reduced to 10 while others remain at 15 to encourage new construction in those areas. Decreasing the percentage could happen too. Maybe 75% abatement for x years in Tremont while places like Glenville retain 100% abatement.

Just now, PoshSteve said:

I could see the timeframe of the program decreasing from the current 15 years, maybe to 12 or 10. Or perhaps a tiered system where certain zip codes are reduced to 10 while others remain at 15 to encourage new construction in those areas. Decreasing the percentage could happen too. Maybe 75% abatement for x years in Tremont while places like Glenville retain 100% abatement.

This all is reasonable.  

I'd just be happy if the neighborhood NIMBY's would even bother to educate themselves on it!  

13 hours ago, Cleburger said:

This all is reasonable.  

I'd just be happy if the neighborhood NIMBY's would even bother to educate themselves on it!  

 

While I like this idea, that last expression is absolutely positively my least favorite recent addition to the lexicon.   It always means "learn to agree with me".

If you want to change someone's mind, it's on you (or your allies) to persuade them.  

58 minutes ago, E Rocc said:

 

While I like this idea, that last expression is absolutely positively my least favorite recent addition to the lexicon.   It always means "learn to agree with me".

If you want to change someone's mind, it's on you (or your allies) to persuade them.  

It's hard to change someone's mind when they don't even understand what it is they're fighting against.  Believe me, I try.   Most of them hear "tax abatement" and think there is no tax paid at all for 15 years, rather than the lack of tax on the "improvements." 

14 hours ago, Cleburger said:

I'd just be happy if the neighborhood NIMBY's would even bother to educate themselves on it!  

 

1 hour ago, E Rocc said:

 

While I like this idea, that last expression is absolutely positively my least favorite recent addition to the lexicon.   It always means "learn to agree with me".

If you want to change someone's mind, it's on you (or your allies) to persuade them.  

If Nimbys don’t like being called Nimby then they shouldn’t violate the personal property rights of other property holders. 
 

Let’s be crystal  clear - Nimbys are the primary cause of the housing affordability crisis in this country. (Fortunately costs are not as bad here, but we do still see some aspects of it.). The behavior and its ramifications need to be called out. 
 

How do we deal with this? We need a citywide zoning redo enabling mixed-use development allowing developers to build by-right. No more variance process required, thus reducing costs and minimizing the ability of loud-mouth, ignorant complainers from killing or shrinking good projects. There absolutely still need to be rules to minimize outright bad projects and thorough building inspections to ensure quality. 
 

And targeted abatements for neighborhoods that need investment are also an important part of the equations. Steve’s proposal makes, perhaps with some adjustments of the numbers. 

15 hours ago, Cleburger said:

I'd just be happy if the neighborhood NIMBY's would even bother to educate themselves on it!  

 

14 minutes ago, Boomerang_Brian said:

No more variance process required, thus reducing costs and minimizing the ability of loud-mouth, ignorant complainers from killing or shrinking good projects.

 

I'm not sure it's so much ignorance or lack of understanding the issues on the part of NIMBYs, I think they're more concerned with their home or property values declining if there are more housing options available. 

 

Still, this is selfish and bad for the community. Which is, long-term, bad for property values.

 

(Though @Cleburger, sounds like you've had this conversation before, so maybe is just lack of knowledge...)

29 minutes ago, Boomerang_Brian said:

 

If Nimbys don’t like being called Nimby then they shouldn’t violate the personal property rights of other property holders. 
 

Let’s be crystal  clear - Nimbys are the primary cause of the housing affordability crisis in this country. (Fortunately costs are not as bad here, but we do still see some aspects of it.). The behavior and its ramifications need to be called out. 
 

How do we deal with this? We need a citywide zoning redo enabling mixed-use development allowing developers to build by-right. No more variance process required, thus reducing costs and minimizing the ability of loud-mouth, ignorant complainers from killing or shrinking good projects. There absolutely still need to be rules to minimize outright bad projects and thorough building inspections to ensure quality. 
 

And targeted abatements for neighborhoods that need investment are also an important part of the equations. Steve’s proposal makes, perhaps with some adjustments of the numbers. 

 

I meant "educate themselves".   It's intellectually lazy at best and almost always condescending as hades.

 

NIMBYism is all too often defined by our own views.   Opposing "gentrification" is good, but fighting densification or low income housing makes one a Horrible Person®.  It's pretty much human nature, and therefore a neutral.

NIMBNY (Not In My New Back Yard), applied to those there prior, is just plain obnoxious most of the time.   Especially where sprawl and farmland are concerned.

4 minutes ago, E Rocc said:

I meant "educate themselves".   It's intellectually lazy at best and almost always condescending as hades.

Ok, then let’s talk about that phrase too. @Cleburger was talking about people who are blatantly ignorant of how the tax abatement policy actually works. When someone is vocally complaining about a policy that they do not understand, and they actively refuse the patient attempts we make to explain those policies, how should we be characterizing their behavior?

23 hours ago, Boomerang_Brian said:

Ok, then let’s talk about that phrase too. @Cleburger was talking about people who are blatantly ignorant of how the tax abatement policy actually works. When someone is vocally complaining about a policy that they do not understand, and they actively refuse the patient attempts we make to explain those policies, how should we be characterizing their behavior?

 

Challenging.   It's still on you to convince them why they should understand it.   Not on them.

City of Cleveland will be tweaking the tax abatement program.  

More

 

Can anyone summarize the changes?

 

Found a summary:

https://www.wksu.org/government-politics/2022-05-09/cleveland-mayor-justin-bibb-city-council-to-take-up-residential-tax-abatement-overhaul

Edited May 10, 20223 yr by dastler

21 minutes ago, dastler said:

Can anyone summarize the changes?

 

Found a summary:

https://www.wksu.org/government-politics/2022-05-09/cleveland-mayor-justin-bibb-city-council-to-take-up-residential-tax-abatement-overhaul

I like this overhaul.  85% abatement with a $350,000 cap is still extremely beneficial but at the same time it recognizes that these areas are much better off than they were before.  There is no need to give 100% abatement on a 750k home.

You get to a time after reading a forum for a while that something pushes you over the edge and you join to leave a  comment. This was the straw for me.

 

Sure, modify the abatement policy a bit to favor certain neighborhoods over the tremonts, ohio cities, etc. But Bibb and Council or whoever wrote it really did a lazy and poor job here.  $350k is not a lot of money these days for a house--even in Cleveland. So using that number as a cap everywhere is stupid. We've had decades of decline---so now that we see a little bit of healthy investment, we're going to curtail it?  Its very clear that Bibb doesn't understand how cities work. In the "Market Rate" areas, the abatement should 85% of value of the first $1M (so if you're gonna spend $1.3M on a place, you still get a benefit--as the city should still want to attract such people), middle market should 90% on first $1.2M of value; and "opportunity" area should be 100% of value on first $1.5M of value. Or something like that. As written, this will actually hurt Cleveland. Especially now, with work from home, the city should want high rollers in its boundaries if they won't be pay income tax based on working in a Downtown office. Now is not the time to remove incentives for moving into the city with overly severe legislation.

11 minutes ago, telefax said:

You get to a time after reading a forum for a while that something pushes you over the edge and you join to leave a  comment. This was the straw for me.

 

Sure, modify the abatement policy a bit to favor certain neighborhoods over the tremonts, ohio cities, etc. But Bibb and Council or whoever wrote it really did a lazy and poor job here.  $350k is not a lot of money these days for a house--even in Cleveland. So using that number as a cap everywhere is stupid. We've had decades of decline---so now that we see a little bit of healthy investment, we're going to curtail it?  Its very clear that Bibb doesn't understand how cities work. In the "Market Rate" areas, the abatement should 85% of value of the first $1M (so if you're gonna spend $1.3M on a place, you still get a benefit--as the city should still want to attract such people), middle market should 90% on first $1.2M of value; and "opportunity" area should be 100% of value on first $1.5M of value. Or something like that. As written, this will actually hurt Cleveland. Especially now, with work from home, the city should want high rollers in its boundaries if they won't be pay income tax based on working in a Downtown office. Now is not the time to remove incentives for moving into the city with overly severe legislation.

The huge majority of houses- new builds or rehabs in most of Cleveland’s neighborhoods don’t even come close to $350,000, even in this market.

 

Glenville; Mt. Pleasant; St. Clair; Euclid Green; Union Miles; Buckeye; Kinsman; Central; Lee-Harvard; Even the Cleveland side of Shaker Square, and that’s only east of the river.  
 

That number makes sense for the majority of the city- especially when we can expect housing prices to decline in the next year or so.

21 minutes ago, telefax said:

You get to a time after reading a forum for a while that something pushes you over the edge and you join to leave a  comment. This was the straw for me.

 

Sure, modify the abatement policy a bit to favor certain neighborhoods over the tremonts, ohio cities, etc. But Bibb and Council or whoever wrote it really did a lazy and poor job here.  $350k is not a lot of money these days for a house--even in Cleveland. So using that number as a cap everywhere is stupid. We've had decades of decline---so now that we see a little bit of healthy investment, we're going to curtail it?  Its very clear that Bibb doesn't understand how cities work. In the "Market Rate" areas, the abatement should 85% of value of the first $1M (so if you're gonna spend $1.3M on a place, you still get a benefit--as the city should still want to attract such people), middle market should 90% on first $1.2M of value; and "opportunity" area should be 100% of value on first $1.5M of value. Or something like that. As written, this will actually hurt Cleveland. Especially now, with work from home, the city should want high rollers in its boundaries if they won't be pay income tax based on working in a Downtown office. Now is not the time to remove incentives for moving into the city with overly severe legislation.

If you look at the city's books, revenue from income tax vastly exceeds the revenue from residential property taxes - Cleveland could easily afford to abolish the residential properry tax entirely or at least reduce it substantially.  Reducing the tax would probably allow additional property appreciation that would (after re-assessment) make up for the reduction. (Or is this voodoo economics?  😁)

3 minutes ago, Oldmanladyluck said:

The huge majority of houses- new builds or rehabs in most of Cleveland’s neighborhoods don’t even come close to $350,000, even in this market.

 

Glenville; Mt. Pleasant; St. Clair; Euclid Green; Union Miles; Buckeye; Kinsman; Central; Lee-Harvard; Even the Cleveland side of Shaker Square, and that’s only east of the river.  
 

That number makes sense for the majority of the city- especially when we can expect housing prices to decline in the next year or so.

 

So if the majority of NEW BUILD houses are under $350,000, that means they area also under $500k or $800k.  And what about inflation? Why lock into an arbitrary low number? And how many houses in Ohio City and Downtown are $350k or less? With that number you will actually hurt new development. Cleveland has a long way to go before we should be shooing away people from Downtown or ANY neighborhood. Yes, incentive rough neighborhoods over others, but don't kill the successful parts in attempts to do so.

 

4 minutes ago, Dougal said:

If you look at the city's books, revenue from income tax vastly exceeds the revenue from residential property taxes - Cleveland could easily afford to abolish the residential properry tax entirely or at least reduce it substantially.  Reducing the tax would probably allow additional property appreciation that would (after re-assessment) make up for the reduction. (Or is this voodoo economics?  😁)

 

A lot of suburban people are not working downtown like they were pre-covid, so income tax receipts will be way down.  But the larger point you're making seems to be that because income tax brings in more than property tax, we can afford to abolish it. Yeah, F#@$! the schools which use property tax and while the city is struggling with funds in so many areas, let's reduce the amount of money we bring in. 

1 minute ago, telefax said:

 

So if the majority of NEW BUILD houses are under $350,000, that means they area also under $500k or $800k.  And what about inflation? Why lock into an arbitrary low number? And how many houses in Ohio City and Downtown are $350k or less? With that number you will actually hurt new development. Cleveland has a long way to go before we should be shooing away people from Downtown or ANY neighborhood. Yes, incentive rough neighborhoods over others, but don't kill the successful parts in attempts to do so.

 

 

A few things: The county is going to be releasing an abatement/tif web app soon so folks will be able to see where the majority of these are and I'm sure the conversation will be interesting.

-A lot of people sell their houses after the abatements run out (often around the price they paid for the house), housing prices are inflated because of the abatements in a lot of cases.

-I don't think getting rid of the abatement is going to shoo anyone away from the hot neighborhoods - the new housing prices should reflect the true cost vs saving money up front on taxes. 

3 minutes ago, telefax said:

 

So if the majority of NEW BUILD houses are under $350,000, that means they area also under $500k or $800k.  And what about inflation? Why lock into an arbitrary low number? And how many houses in Ohio City and Downtown are $350k or less? With that number you will actually hurt new development. Cleveland has a long way to go before we should be shooing away people from Downtown or ANY neighborhood. Yes, incentive rough neighborhoods over others, but don't kill the successful parts in attempts to do so.

 

As someone who bought and knows people who are buying 350k+ houses in Ohio City, the tax abatement was a cherry on top of something that would have been purchased regardless. 

38 minutes ago, telefax said:

 

So if the majority of NEW BUILD houses are under $350,000, that means they area also under $500k or $800k.  And what about inflation? Why lock into an arbitrary low number? And how many houses in Ohio City and Downtown are $350k or less? With that number you will actually hurt new development. Cleveland has a long way to go before we should be shooing away people from Downtown or ANY neighborhood. Yes, incentive rough neighborhoods over others, but don't kill the successful parts in attempts to do so.

 

Look at neighborhoods outside of Ohio City, Downtown, University Circle, Tremont, and Detroit Shoreway, as I mentioned previously, and you’ll get more of a real picture of what houses are going for in a huge majority of the city.

 

The prices just aren’t there in huge swaths of the city. If you think they are, prove me wrong.

Edited May 10, 20223 yr by Oldmanladyluck

I'm not saying houses in Lee-Miles are going for more than $300k. I'm saying $50k, $100k, 200K AND 400k, 500k, 600K ARE all under $1M.  AND places in Ohio City, Downtown, University Circle, Tremont, and Detroit Shoreway are going for MORE than $350k--and the city needs people that can afford more than $350k.  So, two things:  350k is too small of a number to start with as a larger number includes those under $350 and 2) Downtown/Ohio City should not have the same number as Central/Lee-Miles.

Tax policy needs to be balanced and geared to the time. Too much of one tax and you put the squeeze on development. Not enough and you put the squeeze on the ability of the city to run itself. In addition no property tax on new development puts an unfair burden on existing property owners. At one time Cleveland was desperate for development. Fortunately that is no longer the case. We're running now but still not flying. I think rather than eliminate the tax abatement completely or leave it alone it's best to begin to wean ourselves. I think this proposal is a good approach. Rather than simply create an all or nothing tax policy I appreciate this more evenhanded one. The concept has my vote. If the specifics need to be ratchet up or down, so be it.

I'd listen to the argument that a $350,000 cap is too low given the cost of housing at the moment. Only a quarter of the new build houses on the market are near or under the cap. Some of those so far under that I suspect they are subsidized.

 

https://www.realtor.com/realestateandhomes-search/Cleveland_OH/age-3/sby-1
 

32 minutes ago, cadmen said:

At one time Cleveland was desperate for development. Fortunately that is no longer the case. We're running now but still not flying. 

 

I'd say we're now walking--not running. And walking versus lying in a hospital bed on life support.

33 minutes ago, telefax said:

 

I'd say we're now walking--not running. And walking versus lying in a hospital bed on life support.

 

Tremont and OHC knockdowns and builds would disagree. I don't think it's equitable to put the burden of higher property taxes on folks who have been living in these neighborhoods for 20+ years when abatement folks can move out when it comes time to pay up. Sure, longtime residents can cash out and move, but again, is that equitable? The neighborhoods that have benefitted the most from this are running (OHC, Tremont, D-S, Little Italy, etc.), the rest of the city? Not so much.

 

We have a sexennial appraisal coming up in 2024 and if these values hold, 2018's public reaction will look like a walk in the park.

I was talking about the city as a whole. It means nothing if one neighborhood is everything and you have a struggling one a few blocks to the south where poverty, crime, poor schools, etc. inevitably affect the hot neighborhood just a few blocks away. As a city---not as "tremont"--we are walking. Not running. We need proper policies that benefit the whole city---and by proper, I mean well-written laws, not just a random number (350,000) that is used citywide. Take a bit of effort and use your brain. (Not you--I'm talking about council and the mayor.)