New Market Tax Credits Key to City’s Revival

Cincinnati’s development coffers got a little fatter last week, as $125 million in federal tax subsidies flooded into the city. These subsidies, called New Market Tax Credits (NMTCs), incentivize local investors to funnel capital into low-income communities and have essentially bankrolled Over-the-Rhine’s entire revitalization.

For example, Washington Park — perhaps the most emblematic example of OTR’s rebirth — received nearly $14 million in New Market Tax Credits (NMTC) from the Local Initiatives Support Coalition (LISC) to help support its reconstruction. Several ongoing developments have also received some or all of their funding through NMTCs, including the Market Square and Ziegler Park projects.

Ziegler Park Aerial

New Market Tax Credits helped transform parts of Over-the-Rhine like the reconstruction of Ziegler Park (Photo by Travis Estell)

Developers often balk at the prospect of developing low-income communities because they fear their investment will be wasted. NMTC are the federal government’s attempts to allay these concerns. Congress first authorized the subsidies through the Community Renewal Tax Relief Act of 2000. Over the past fifteen years, the bill’s success has earned it bipartisan support. According to the program’s 2016 report, the tax credits have created 750,000 jobs and invested over $75 billion to businesses and revitalization projects in communities with high rates of poverty and unemployment.

Less than 25 percent of the applications submitted each year are awarded, but three major Cincinnati developers beat the odds this year: Cincinnati Development Fund ($65 million), Uptown Consortium (45 million), and the Kroger Community Development Entity ($15 million).

To win an NMTC grant, a corporation — in federal parlance, Community Development Entities (CDE) — must lobby the U.S. Treasury’s Community Development Financial Institution (CDFI) Fund on behalf of private investors like the Cincinnati Center City Development Corporation (3CDC). If the CDFI approves the application, then the investors who pledged money to the CDE will receive a seven-year tax abatement to support development.

3CDC, in particular, has secured a eye-popping $238 million since the program’s inception. Without this capital, it’s unlikely that OTR would have changed as drastically as it has. The community was a no-brainer for NMTC-driven development due to its extreme poverty. The neighborhood’s median household income during the 2010 census was a paltry $14,517. Six years and billions of dollars have certainly improved its lot, but its average income still pales in comparison to the city’s 2015 median income, $56,826.

While OTR will likely continue to receive the majority of NMTC-driven development, other distressed neighborhoods are receiving attention. According to Director of Development Thea Munchel, the Walnut Hills Redevelopment Foundation expects approximately $6.5 million in NMTC Equity for its expected revitalization of Paramount Square. “It is too early to know who all will participate in the deal,” she said. “But Cincinnati Development Fund received a huge award and has indicated that they will contribute some into the project.”

Cincinnati Rent Data Reveals Housing Challenges

Renting an apartment in Cincinnati is comparable in price to most of the geographically close and similar-sized cities in the Industrial Midwest and Upper South regions. Apartment-finding website RentCafé investigated the average apartment size and rent in America’s 100 largest cities. Using a baseline of $1,500, the data provides a glimpse America’s most and least-expensive cities.

Cincinnati’s price per square foot comes out to be exactly $1.00 and, with an average apartment size of 863 square feet, the average rent in the city is $866. Cincinnati is identical in price per square foot with St. Louis, MO, although a smaller average apartment size makes the average rent ($839) cheaper in that city. Cincinnati’s average rent is less than in Pittsburgh, PA ($1,070) and Cleveland, OH ($927) but more expensive than Columbus ($800), Indianapolis ($758), and Louisville ($841). Besides Indianapolis and Pittsburgh, most nearby cities remained relatively similar in average rent prices.

rentanalysisohio

RentCafé’s data also shows, unsurprisingly, that New York City, San Francisco, and Boston top the list with average rents coming out to $4,031, $3,275, and $3,111, respectively. Using the baseline of $1,500, you could afford a 271 square foot apartment in New York City, a 342 square foot one in San Francisco, or an apartment with 399 square feet in Boston. Other cities at the top of the list include other expected cities such as Washington, DC, Seattle, WA, and Los Angeles, CA. The cheapest cities for rent in the nation are Memphis, TN, Wichita KS, and Winston-Salem, NC.

Despite rent in Cincinnati and related cities being relatively cheap renters in these cities’ respective counties struggle to afford a decent apartment. Based on data from the National Low Income Housing Coalition (NLIHC), a typical renter household in Hamilton County, OH (Cincinnati) will spend 36.9% of their income to afford a two-bedroom apartment. The NLIHC considers anything more than 30% to be unaffordable. In Marion County, IN (Indianapolis) that number is 35.1%, in Jefferson County, KY (Louisville) it’s 35.5%, 33.9% in Allegheny County, PA (Pittsburgh), and 37.1% in Cuyahoga County, OH (Cleveland). Franklin County, OH (Columbus) comes close to being affordable at 30.4% and St. Louis County barely makes the cut at 29.7%.

While housing crises are well-documented and discussed in America’s booming cities like New York City and San Francisco, this data shows the need for more affordable housing in many of America’s smaller metropolises as well. In fact, looking at the data from the National Low Income Housing Coalition, one would be hard-pressed to find many major American cities that meet the 30% of income threshold set by the NLIHC.

New Event to Highlight Urban Parks and Streetcar

IGers Cincinnati Meetup PromoAutumn heralds apple cider, crisp cool air and the colorful reveal of fall foliage. The best way to experience this in Cincinnati is by visiting one of the city’s many parks. This city is blessed with having some of its best parks within or overlooking its urban core. The Smale Riverfront Park, Washington Park and others dot the landscape and are all easily connected by the brand new Cincinnati Bell Connector. Yet the leaves won’t stay on the trees forever, which is why this weekend is the best time to snap a few photos!

UrbanCincy has partnered with IGers Cincinnati, a group dedicated to highlighting the best Cincinnati area Instagramers to do a photo walk this Saturday, October 22 at noon. The photo walk, called “Park + Ride,” will highlight the new Cincinnati Bell Connector and the city’s great urban parks along the streetcar route.

Participation is free and open to anyone. This is a great opportunity to meet new people, fellow Instagram photographers and more. We will be meeting at the “Sing the Queen City” sign at Smale Riverfront Park at noon. From there the group will tour the Riverfront Park before boarding the streetcar to travel to our next destinations. Stops include Smale Riverfront Park, Piatt Park, Washington Park and the Rhinegeist rooftop deck. There will also be an optional climb to Bellevue Hill Park.

Some photos taken at the event and tagged with #cinstameet_streetcar will be highlighted by UrbanCincy.

The event starts at noon on Saturday October 22 in front of the “Sing the Queen City” sign located at the foot of the Roebling Suspension Bridge. It is easily accessible from the Banks Streetcar stop and is located within a block of three Cincy RedBike stations. Bring your smartphone or camera. We hope to see you there!

More Developers Building “Convertible” Parking Garages

UrbanCincy readers may know that the 84.51° Center (formerly Dunnhumby Centre) in Downtown Cincinnati includes an above-ground parking garage that can be converted into office space at a later date. The building was designed this way because of anticipated future growth of the building’s namesake tenant.

An increasing number of parking garages across the country are now being designed in this way. That’s partially because developers are starting to understand that our urban real estate is better used for office space, residential, and retail as opposed to car storage. Developers also predict that the demand for urban parking garages will decline as self-driving cars start to appear in the coming decades — why park your car in an expensive garage downtown when you can send it back home after it drops you off at work?

From the Denver Post:

“It’s smart use of resources and space is a resource,” Cohen said. “If you’re designing a building and there’s space that potentially could become obsolete over time, that’s just a wasted opportunity.”

Building parking that has future life as something else requires particular thought to the garage’s floor-to-ceiling heights and slope of the floors, Fisher said.

“The typical sloped-ramp parking garage has about a 5 percent slope,” Fisher said. “You can’t work in that space.”

Instead, the floor plates need to be flat, with discrete ramps between the levels, Petersen said. At WTC Denver, the ramps are being designed so they can be removed someday, leaving a light-filled courtyard.

“It doesn’t take much more initial investment or cost,” he said. “It’s more just thinking creatively.”

Episode #65: The Cardinal

Amtrak TrainOn the 65th episode of The UrbanCincy Podcast, TravisRandy, and John are joined by Charlie Monte Verde of Amtrak.

We discuss the Cardinal Conference that was held in late September and the possibility of upgrading the Cardinal — Cincinnati’s sole intercity passenger train — to daily service.

We also discuss why Amtrak’s overall ridership is continuing to rise year over year, and what it would take for additional Amtrak routes to be added to Cincinnati’s Union Terminal.