Officials have launched a new fund to help address the affordable housing needs in Cleveland.
Supported by an $18 million grant commitment from the city and a $20 million investment from KeyBank, the Cleveland Housing Investment Fund aims to raise up to $100 million from mission-aligned partners to provide capital for developments across the city. The goal is to spur 2,500 to 3,000 affordable units, including a minimum 100 for-sale units.
“By creating the Cleveland Housing Investment Fund, we are not just addressing a pressing need; we are investing in the future of our neighborhoods,” said mayor Justin M. Bibb. “We are grateful for the support from KeyBank and excited to partner with LISC, which has a great track record in the creation of innovative programs that lead to successful affordable housing projects. Together, we will increase access to affordable housing for Clevelanders, regenerating vibrancy and quality of life throughout the city.”
CHIF will be managed by LISC Fund Management (LFM), an affiliate of the Local Initiatives Support Corp. (LISC).
Citing a recent Redfin report, officials note that the fund arrives at a time when Cleveland recently recorded the biggest year-over-year rent increase by percent of the 50 most-populated metros in the nation. The median asking rent soared 10.6% in the city at the end of last year.
CHIF will focus on providing financing to construct housing that is affordable for residents with low to moderate incomes, particularly those earning less than 80% of the area median income. As of December, this translates to individuals earning $54,450 or less annually, according to officials.
CHIF will invest in a variety of affordable housing developments, including neighborhood-scale rehabilitation projects, as well as the new construction of rental housing and for-sale homes, with an average loan or investment of $1 million to $5 million per project.
Additionally, the fund aims to support emerging developers and community-based enterprises that face challenges accessing capital. These developers will receive guidance and technical assistance to make sure they are well positioned to potentially secure funding from CHIF. Designed to increase the impact and leverage of public dollars, CHIF aims to deliver gap financing with a higher return on investment. Typically, for every $12.50 invested, there is a $100 impact. CHIF is projected to increase this impact, where for every $6 invested, there is a projected $100 impact.
“At KeyBank, we believe that everyone deserves the opportunity to thrive in a community that supports their aspirations. Our $20 million investment in the Cleveland Housing Investment Fund underscores our commitment to affordable housing solutions that effect meaningful change in the lives of Cleveland residents," said Brian Maddox, national team leader for KeyBank CDFI Lending and Investment. “CHIF is an innovative program we believe will bring robust development that will positively impact neighborhoods across Cleveland.”
LISC and LFM have had success managing similar funds in Charlotte, Dallas, and Detroit, according to Kandis Williams, executive director of LISC Cleveland.
“With CHIF, we have taken a lot from those programs but tailored them to meet Cleveland’s unique challenges and build upon existing community assets,” Williams said. “This initiative will provide access to flexible capital, which is sorely needed to support construction and attract projects to neighborhoods that otherwise would be overlooked. We are already talking to developers about this new opportunity and look forward to seeing new projects breaking ground soon.”
