CINCINNATI - People passing through the Over-the-Rhine neighborhood have a hard time distinguishing a $300,000 condo from a unit that rents for 35 percent of the area median income, thanks to The Model Group.

The developer of Magnolia Heights, a scattered-site rehabilitation of 98 affordable housing units, sought to create a mixed-income neighborhood by using the same materials, architects, and contractors as the market-rate units it was building in the area.

“We had an opportunity to preserve this housing in such a way that it could enhance revitalization of the neighborhood,” said Steve Smith, The Model Group’s president.

Over-the-Rhine lost many affordable housing units over the last decade. Many owners opted out of their housing assistance payment contracts or sold to marketrate developers as the area began to gentrify. But a 2001 riot, fueled by racial tensions, set those efforts back, and in the ensuing years, 500 of the neighborhood’s 1,200 buildings were left vacant.

The Model Group’s strategy to fight blight was to first attract as much tax credit investment as it could into the neighborhood. Once it rehabbed the tax credit units, it acquired many of the neighborhood’s abandoned structures to rehab as marketrate housing.

“By the time we got done rehabbing the affordable units, the blighted structures in the neighborhood were the vacant ones,” said Smith. “We were able to acquire those vacant buildings and achieve stabilization in the neighborhood without any displacement of low-income housing.”

As Magnolia Heights proceeded, the company partnered with the Cincinnati Center City Development Corp. (3CDC) to develop 27 market-rate condominiums adjacent to the affordable units. Other developers partnered with 3CDC to build an additional 73 condos in the immediate area, with a goal of producing 100 new condos per year for five years.

Some of the market-rate units sell for more than $300,000, with the average Over-the-Rhine price being around $170,000. That’s a stark contrast to the adjacent affordable units—which also feature central air, hardwood floors, and ceramic tile—some of which have gross rents as low as $411.

The 18 buildings rehabbed in Magnolia Heights range in size from 12 units to two, and each are about 100 years old, some stretching back to the 1860s.

The gut rehabs focused on reclaiming the buildings’ original glory. Many of the interiors were reconfigured in the 1960s and ’70s when the buildings first became Sec. 8 properties. The original floor plans were condensed so that the maximum number of units, mostly efficiencies, could be squeezed into a building’s footprint.

So The Model Group combined many efficiency units, producing mostly two- and three-bedroom units. It also restored bricked-up windows to their full heights, and in some cases, resurrected marble floors in the hallways, marble stair treads, and wrought-iron handrails.

Financing for the project consisted of 9.9 million in equity generated by lowincome housing tax credits and about $2.4 million of historic tax credits, both provided by the Ohio Capital Corporation for Housing. The city of Cincinnati also chipped in $1.3 million of debt on the project through its HOME funds, and a $1 million bridge loan was provided by the state of Ohio. U.S. Bank provided a $1.6 million permanent loan, as well as a $13 million construction loan.