From CSU Urban Affairs Dean Mark Rosentraub:

 

A housing boom

(well, almost)

Monday, October 10, 2005

Mark S. Rosentraub

 

As homeowners wait months to sell their homes, it might be a bit cruel to talk of signs of a boomlet in Greater Cleveland. Yet a housing boom of sorts is starting, and Greater Cleveland needs to encourage it.

 

You can find evidence of the boomlet in the high occupancy rates for apartments on downtown Cleveland's East Fourth Street and in Westlake's Crocker Park. A boom is taking place in the Warehouse District, where condominiums at the Pinnacle sell for more than $300,000. There is a boomlet when Zaremba Homes breaks ground for the Avenue District at East 12th Street and St. Clair Avenue while building new townhouses at Brunswick Town Center.

 

Why build new homes when older houses languish unsold?

 

Markets respond to what people want: Energy-saving designs, central air conditioning and layouts for big-screen televisions sell homes. Larger numbers of older and younger consumers in the market also mean a preference for townhouses and condominiums. Older homes in Lakewood or Shaker Heights do not provide what these consumers want, so like a shopper looking for a certain pair of shoes in a specific color, prospective homeowners go elsewhere. It is possible to have a glut of older houses on the market while new homes are pre-sold and rented before harried workers have painted the walls.

 

Does this mean owners of older homes will lose their equity? No. This region can turn declining property values into rising levels of equity.

 

The boom is being steered by four factors.

 

Local housing studies indicate demand from approximately 10,000 households for condominiums surrounded by urban life. This is a large enough market to attract developers who build new units in urban lifestyle areas such as the Warehouse District, the Flats, along Euclid Avenue and East Fourth and 12th streets and in parts of Lakewood, Cleveland Heights, Shaker Heights and South Euclid.

 

"Big bets" for Greater Cleveland's future economy are being made, and developers want to be ready when these become winners and bring hundreds of new workers to town. The Cleveland Clinic and University Hospitals are investing more than $500 million that could create hundreds, if not thousands, of new high-technology, health-care-related jobs.

 

The population of the United States and Greater Cleveland is changing; developers want to serve the demands of these giant bubbles of consumers - aging boomers who want smaller, newer places and the workers who will be coming to places like the Cleveland Clinic, University Hospitals and Quicken Loans. Many members of these two groups prefer urban lifestyles.

 

The Midwest is far from dead. The U.S. Census projects 10 million new residents by 2025 in the area defined by Cleveland, Pittsburgh, Cincinnati, Louisville, Indianapolis, St. Louis, Milwaukee and Minneapolis. These people will be employed by new businesses created by the planning and investment being made in each city. They will be attracted by the comparatively low costs of housing and short commute times in these cities.

 

Success in attracting an important share of the 10 million new Midwesterners to Greater Cleveland is the answer to declining sales of older homes, but it will require coordinated, regional efforts. Greater Cleveland must work as a unit to attract new companies to locate around the region's health centers, universities and in downtown Cleveland where the big bets are being made. This will make first-ring suburbs far more attractive to new workers, create a shorter wait for sellers and restore property values.

 

This scenario becomes a reality for the region if public sector planning is coordinated and complements the big bets being made by the Clinic, University Hospitals, Case, Cleveland State University and many important, private companies downtown. Public investments have to be paired with those commitments to ensure success. The region cannot be divided by squabbles and the politics of new versus old suburbs, but unified through a new approach for government in regional economic development.

 

This does not mean a single, super government or an end to any city's existence. It also does not mean the elimination of county commissioners.

 

But it does require a unified approach for economic development and a single voice through a countywide development agency. This agency must have the authority to finance and locate the needed investments to complement the big bets and ensure that the region's infrastructure meets the needs of businesses and residents. This authority's director should be chosen by a board comprised of seven individuals with two appointed by county commissioners, one each by the mayor and City Council of Cleveland, and three by the Cuyahoga County Mayors and Managers Association. It is also possible to designate the Cleveland Port Authority as the economic development agency for the county and give to it the authority and responsibility for using public money to advance the boom.

 

People have asked when Northeast Ohio will rebound and advance. The answer is that a boomlet is in process. Homeowners and other voters must work with elected officials to form the redevelopment authority that allows one unified voice to have the authority and responsibility to advance Cuyahoga County's economy through strategic investments with businesses and the region's nonprofit health-care providers. If a unified voice is found, houses will not sit with for-sale signs for months at a stretch.

 

Rosentraub is the dean of the Maxine Goodman Levin College of Urban Affairs at Cleveland State University.

This piece is a good recap of all the "Celebrate Cleveland" forums that have been going on in the College of Urban Affairs.  What I liked is that towards the end, Rosentraub did get on to practical matters, including a recommendation for the public sector to take appropriate action in shaping the future of regional growth (below):

 

"This scenario becomes a reality for the region if public sector planning is coordinated and complements the big bets being made by the Clinic, University Hospitals, Case, Cleveland State University and many important, private companies downtown. Public investments have to be paired with those commitments to ensure success. The region cannot be divided by squabbles and the politics of new versus old suburbs, but unified through a new approach for government in regional economic development.

 

This does not mean a single, super government or an end to any city's existence. It also does not mean the elimination of county commissioners.

 

But it does require a unified approach for economic development and a single voice through a countywide development agency. This agency must have the authority to finance and locate the needed investments to complement the big bets and ensure that the region's infrastructure meets the needs of businesses and residents. This authority's director should be chosen by a board comprised of seven individuals with two appointed by county commissioners, one each by the mayor and City Council of Cleveland, and three by the Cuyahoga County Mayors and Managers Association. It is also possible to designate the Cleveland Port Authority as the economic development agency for the county and give to it the authority and responsibility for using public money to advance the boom."

I think this article makes a good case for the region to begin planning and building for being "big" again. If you don't build infrastructure and amenities for adding hundreds of thousands of new residents, then why should they come here? What message are we sending to outsiders by being timid? If we build confidently about our future, growth-minded people will be inspired by that and want to be a part of it. But if we use trends of the past 40 years to guide our future development (as the Greater Cleveland Growth Association, NOACA and others have done), then we might as well hang out a sign that says "please help us" rather than "we can help you." Which city would you, as an outsider looking for a new home/business location, want to become part of?

 

KJP

I am glad that Rosentraub continues to write these articles.  I agree with him. 

 

I think that the two biggest obstacles that we face as a city are: poor schools and high taxes.  A regional approach could go a long way towards improving the city in those two areas.  I hate to see Strongsville and Middleburgh Heights offering tax relieft to UPS.  UPS has to have a cleveland-area location.  If we had a regional approach, we would not have to offer these tax breaks.

 

I know that many people complain that we don't have enough good jobs in the area.  We lose out for a reason.  While I am happy when new jobs are announced, we will not be able to sustain any growth until the schools are fixed and the tax structure is set up so that businesses don't want to flee the region.  Geez, I am sounding awfully republican.  Someone slap me.

Housing bubble? We only fizzed

Value of homes in Cleveland beat inflation, by a little

(Cleveland) Plain Dealer

Sarah Hollander, Plain Dealer Reporter

Tuesday, October 03, 2006

 

Homeowners across Northeast Ohio can pat themselves on the back -- lightly -- for participating in the American dream. Their home values modestly outpaced inflation over the past several years, according to U.S. Census figures released today ...

 

... More at http://www.cleveland.com/census/index.ssf?/base/cuyahoga/1159864430159270.xml&coll=2

""There's no longer anyone building starter homes in Geauga," County Auditor Tracy Jemison said. "They're all in the 3,000-square-foot range."

 

Nice euphemism :roll: