En ediciones anteriores, más de una vez lamenté nuestra afinidad cultural con las soluciones simples a los problemas complejos y les recordé a los lectores que no existe un camino fácil para resolver la crisis de accesibilidad a la vivienda. Pero, para aprovechar el espíritu de las resoluciones de Año Nuevo, y a sabiendas de que es fácil poner en ridículo soluciones que son una tendencia pasajera y más difícil proponer alternativas viables, haré el intento de describir un enfoque a la vivienda que creo que puede ser eficaz.

Los problemas complejos deben abordarse desde varios frentes. Para afrontar la crisis de vivienda asequible, tenemos que hacer tres cosas, como mínimo. Primero, debemos defender y preservar nuestra reserva actual de viviendas asequibles. Segundo, debemos identificar y resolver problemas sistémicos que nos impiden producir viviendas nuevas. Tercero, necesitamos identificar y cultivar oportunidades, incentivos y enfoques nuevos que expandan nuestro potencial productivo y faciliten la producción.

Debemos crear una cartera de soluciones con numerosas políticas en cada una de estas categorías. En este número de Land Lines se documentan algunas maneras en que los gestores de políticas están haciendo eso. A su vez, se incluye un artículo destacado de Anthony Flint sobre el interés cada vez mayor en reformas de zonificación a nivel estatal, y la resistencia local a esas iniciativas. Loren Berlin aporta una historia sobre un proyecto descomunal a cargo del Port of Cincinnati, destinado a que el parque de viviendas unifamiliares de la ciudad siga estando disponible para la compra por parte de las familias locales y fuera del alcance de inversionistas externos. Jon Gorey examina iniciativas para preservar y expandir las viviendas prefabricadas, un componente crítico que suele subestimarse de la oferta de viviendas asequibles del país. Por mi parte, ofreceré una contribución a la tercera categoría, un abordaje centrado en el suelo con un gran potencial para expandir la producción: la reutilización adaptativa de edificios comerciales.

Según la asociación de la industria del comercio, el Consejo Internacional de Centros Comerciales (ICSC, por su sigla en inglés), en los Estados Unidos existen 115.857 centros comerciales. Esto incluye 1.220 centros comerciales grandes (con un promedio de alrededor de 83.500 metros cuadrados destinados a locales comerciales minoristas y 28 hectáreas de tierra) 68.936 franjas comerciales de locales (en promedio, 4.000 metros destinados a locales minoristas y cerca de una hectárea de suelo); y miles de otras tiendas de descuento, tiendas de fábricas y centros comerciales barriales (que suman más de 370.000 millones de metros cuadrados destinados al comercio minorista y 160.000 hectáreas de suelo). Incluso antes de la pandemia, una parte significativa de estos centros se vieron amenazados por el comercio en línea. Hace ya tiempo que los conocedores del mercado inmobiliario predijeron que un cuarto de los centros comerciales más grandes de los Estados Unidos corrían riesgo de cerrar. La pandemia solo intensificó este declive. A pesar de que los centros comerciales vacantes pasaron a ser lugares convenientes para el testeo y la vacunación masivos de la COVID, los expertos empezaron a predecir que más de un tercio de los grandes centros comerciales quedarían vacantes o abandonados en los próximos años.

Las crisis y las oportunidades suelen ser buenas aliadas. La crisis de los comercios minoristas nos ofrece lo que podría ser nuestra mejor oportunidad para resolver la crisis de las viviendas. Por ejemplo, en el Área de la Bahía de San Francisco, uno de los mercados de viviendas más complicados del país, Peter Calthorpe estima que podríamos construir 250.000 unidades de vivienda nuevas mediante la reconversión de espacios minoristas infrautilizados a lo largo de una sola ruta, El Camino Real, que se extiende unos 65 kilómetros desde San José hasta San Francisco y atraviesa 16 municipios. Esto podría aliviar la grave escasez de viviendas en la región, y generaría suficiente densidad residencial para apoyar el transporte público, lo que contribuiría con los esfuerzos del estado y la nación para mitigar la crisis climática. Además, el crecimiento demográfico podría generar suficiente tráfico a pie para apoyar múltiples actividades comerciales. Con esta triada, la gran pregunta es: ¿por qué aún no comenzó el redesarrollo de El Camino Real? Principalmente, debido a diversos factores causados por las personas que complican la situación.

Como ya observé en otras oportunidades, el redesarrollo es más difícil que la urbanización de lugares sin desarrollo previo.  Implica deshacer lo que ya se hizo en el lugar, mientras se intenta que múltiples partes involucradas con diferentes intereses converjan en una visión compartida. Y lo que es mucho peor, surgen complejos obstáculos generados por las personas. Primero, los estímulos fiscales adversos interfieren con la disposición de las jurisdicciones a considerar el cambio del uso del suelo. Las propiedades comerciales generan una gran parte de la renta local, no solo por medio de los impuestos a la propiedad, sino también a través del porcentaje local de los impuestos sobre las ventas y otras comisiones y cargos. El redesarrollo residencial podría reemplazar solo una pequeña parte de la renta perdida. Segundo, los proyectos de redesarrollo son difíciles de financiar. Proyectos nuevos y visionarios podrían entusiasmar a los emprendedores inmobiliarios; son señales de incertidumbre y riesgo para las entidades crediticias y las aseguradoras. Tercero, el redesarrollo de un corredor comercial para convertirlo en un espacio residencial o de uso mixto implica cambios de zonificación, un tema que genera mucha tensión. En el caso de El Camino Real, haría falta que 16 consejos de zonificación aprobaran la rezonificación para que el proyecto avance. Si bien, probablemente, no sería necesaria una participación unánime de las 16 ciudades y pueblos, se requeriría una masa importante para que el redesarrollo manifestara su potencial.

Redesarrollar propiedades comerciales para proyectos de uso mixto con mayor densidad es difícil, pero no imposible. Cada uno de los obstáculos mencionados puede superarse, y de hecho, todos han sido sorteados en otros lugares. Por ejemplo, uno de los proyectos de desarrollo más grandes del país, el Tyson Partnership en Tyson, Virginia, está redesarrollando un distrito comercial de más de 1.100 hectáreas para convertirlo en un desarrollo de uso mixto con buen acceso para el transporte público. El proyecto ha estado en marcha por más de una década y ya incluye 11 edificios residenciales multifamiliares. En Partnership pretenden cuadruplicar la población residencial de la “ciudad periférica” que supo ser un prototipo y que proporcionó viviendas para 25.000 personas, pero dio empleo a alrededor de 125.000.  Están evaluando cuatro paradas nuevas en la Silver Line del metro de Washington para que esta se convierta en el centro urbano del condado de Fairfax, con la esperanza de que llegue a ser el emblema del “nuevo nuevo urbanismo”.

En Memphis, un centro de distribución de Sears que estuvo abandonado por casi tres décadas se redesarrolló y reconvirtió en una “zona urbana vertical” llamada Crosstown Concourse. El edificio de 10 pisos sobre 6.500 hectáreas de suelo ahora aloja una escuela autónoma, un centro de artes escénicas, más de 55.000 metros cuadrados de espacio comercial y 270 departamentos. Ya está impulsando desarrollos nuevos en los barrios circundantes.

Fuera de Seattle, desarrolladores están construyendo una tienda ancla nueva para el centro comercial suburbano Alderwood Mall, que cuenta con 300 departamentos y estacionamiento subterráneo. Esto compensará la pérdida de la tienda ancla anterior, Sears; hará frente a la alta demanda de viviendas en un mercado de viviendas extremadamente agobiado, y proporcionará una base de consumidores que compren en el resto de las tiendas del centro comercial, al que le está resultando difícil sobrevivir.

Si bien, probablemente, no sean tan extensos como El Camino Real, existen cientos y cientos de corredores comerciales desaprovechados a lo largo del país. Si lográramos reconvertirlos en desarrollos de uso mixto y densidad media, podríamos reducir en gran medida el déficit nacional actual de vivienda. A su vez, no escasean los edificios comerciales abandonados o infrautilizados como Sears Crosstown, los distritos comerciales ocupados a medias como Tyson, y los megacentros comerciales abandonados o en decadencia como Alderwood, que ofrecen excelentes oportunidades similares para el redesarrollo.

Según mis cálculos muy prudentes, si redesarrollamos el 20 por ciento de estos espacios comerciales para que alcancen estándares de uso mixto con una densidad de baja a media (25 viviendas por hectárea), podríamos sumar 1,1 millones de unidades de vivienda nuevas y preservar decenas de miles de metros cuadrados de espacio comercial con mayores probabilidades de prosperar. Si redesarrollamos el 25 por ciento de los lugares con 37 viviendas por hectárea, podríamos sumar 2,1 millones de unidades de vivienda. Y si pudiéramos redesarrollar el 30 por ciento de los lugares con 50 viviendas por hectárea, podríamos sumar 3,4 millones de unidades de vivienda nuevas.

Este no es un desafío técnico. Ya hace décadas que desciframos el código sobre la reutilización adaptativa. Debemos simplificar el proceso para facilitar el redesarrollo escalonado y establecer nuevas sociedades público-privadas más eficaces para poder lograrlo. El sector público debe redoblar la apuesta para eliminar el riesgo de los proyectos a través de la aceleración de los permisos, el cofinanciamiento e incentivos financieros inteligentes. El sector privado debe dejar de intentar construir en suelos vírgenes y buscar formas más creativas de redesarrollar los sitios obsoletos. Para visualizar los tipos de desarrollos posibles, basta con observar la obra maestra de Juie Campoli Made for Walking (Hecho para caminar), publicada por el Instituto Lincoln en 2012. Con miles de lugares para escoger, podemos definir cómo queremos producir y reproducir los tipos de barrios que se describen en el libro, y reducir los riesgos percibidos del desarrollo con cada proyecto exitoso.

El asediado sector comercial ofrece la mayoría de los elementos necesarios para hacer frente a la crisis actual de vivienda. Tiene suelo provisto de la infraestructura básica (agua, cloacas, electricidad) y que, por lo general, es de fácil acceso para el transporte público o, de no serlo, se encuentra rodeado de estacionamientos. En general, las ubicaciones son privilegiadas. Al mezclar los usos, ofrecemos dos beneficios enormes para el sector comercial: trabajadores y clientes. Pero los beneficios para la sociedad son aún más profundos. Así que adoptemos esta estrategia, junto con la reforma de zonificación unifamiliar y la preservación de la vivienda asequible, y veamos si podemos resolver la crisis nacional de vivienda de una vez por todas.

Imagen: La celebración inaugural de Crosstown Concourse, un proyecto de uso mixto donde antes funcionaba un centro de distribución de Sears en Memphis. Crédito: Crosstown Concourse.

We’ve been at the land policy game for a long time at the Lincoln Institute. A couple of years ago, we celebrated the 75th anniversary of this enterprise that began life as the Lincoln Foundation and evolved into the Lincoln Institute of Land Policy. Next year, we will celebrate the 50th anniversary of the founding of the Lincoln Institute itself—the original “little red schoolhouse” established by David Lincoln in 1974.

The institute was created to deliver training and research directly, rather than pursuing ephemeral efforts to persuade universities to build land policy research and training into their curricula. I know David would be thrilled that in our 50th year we plan to introduce the first Masters in Land Policy (MLP) offered in the United States, made possible through our recently formalized affiliation with Claremont Lincoln University.

Over the decades, we’ve built an impressive body of scholarship that will anchor the MLP program with unique content. We will introduce students to important new tools they can use to address pressing global challenges such as the climate crisis, mass extinctions, or public financial insolvency. Students will learn how land use planning can help minimize the climate impact of cities or assist in decarbonizing electric grids; how to conserve, in perpetuity, private land holdings that connect publicly protected lands, supporting the creation of the large habitats needed for endangered species to survive; or how to mobilize revenue from land to support the operations of local or national governments.

As much as we know about land policy, some fundamental elements continue to elude us. For example, while we know the value of land is determined by a panoply of factors—and that public actions such as investments in infrastructure and zoning reform have a strong influence on land prices—it’s still embarrassingly difficult to predict land values with any precision. That said, I can assert confidently that the Lincoln Institute knows as much about the determinants of land value as anyone on the planet. Every year we learn more and more about measuring and predicting land prices with improving accuracy. New technologies are a huge help as we push the envelope on new methods for ascertaining land values. Technology is accelerating all of our advancements in land economics. Stay tuned.

Incredibly, there is an even more fundamental, and more embarrassing, gap in our fluency on land policy. During a regular review of the mission and vision of the Lincoln Institute at a recent board meeting, we had to confront the alarming fact that we have no adequate definition of the term “land policy.” This is a big communications and branding problem. While “land” and “policy” evoke almost instant associations for our audiences, combining the two invariably results in head-scratching and confusion.

I’ve wrestled with this communications challenge since I arrived at the Lincoln Institute nine years ago. The challenge is especially acute at weddings or holidays when family or friends ask me what I do for a living. The discussion typically goes like this:

“So, Mac, what are you doing now?”

“I run a land policy think tank in Cambridge.”

“What do you do there?”

“We commission research, provide training, and help governments use land policy to address things like the affordable housing crisis or help them to prepare for climate change.”

“What do you mean by land policy?”

“I think of it as the rules of the game that define the relationship between people and place.”

“Huh?”

“It’s the way we reconcile individual interests in the ownership of property with our need to manage it for public good.”

“You mean, like zoning?”

“Yeah, but it’s more than zoning. It’s a lot of things. It’s the widespread use of conservation easements to preserve private land to support endangered species or sequester carbon. It’s coordinating land use planning and water management so that all communities can survive in the arid Southwest. It’s helping governments mobilize revenue from land to fund schools and fix the roads. It’s using remote sensing to figure out which people are at risk of sea-level rise and finding new places for them to live. It’s helping cities in the developing world deal with the slums that choke them. It’s helping new civic coalitions make smart investments in land and housing to improve community health outcomes. It’s figuring out automated ways for tax assessors to estimate property values for tax bills.”

“That’s a lot of things. Don’t you have a simpler description of land policy, like an elevator pitch?”

“We usually run out of floors.”

For some reason, people have an easier time understanding careers that involve nuclear nonproliferation or monoclonal antibodies than they do understanding land policy. But the board and management of the Lincoln Institute are nothing if not problem solvers. We decided to focus our collective intellect on forging a simple explanation of land policy. After a day and a half with no detectable progress, we decided to do what any college student with writer’s block would do: consult artificial intelligence. But instead of starting with an ordinary elevator pitch, we decided to channel the world’s greatest authority on the English language. We asked ChatGPT to write a sonnet about land policy in the style of William Shakespeare.

Fifteen seconds later, we got something both amazing and terrifying:

Upon fair fields, where crops do flourish bright,
And bounteous harvests bring forth wealth untold,
We oft forget the plight of those less bold,
Who toil and struggle for a patch of light.

But land is more than soil and crops to grow,
It’s where our homes and hearts are built with care,
And thus, its use and stewardship doth bear
A weight that none can lightly let it go.

So let us not in greed and haste proceed,
But weigh the needs of all with equal care,
And let the land provide for all in need.

For when we balance use and stewardship,
We’ll find the land will flourish and be fair,
And all shall prosper in its bounteous grip.

That sonnet is an elevator pitch for the ages. It artfully and economically describes the challenge of reconciling individual interests and collective needs. It also addresses sustainability succinctly by referencing economy (wealth untold), equity (weighing the needs of all), and the environment (the balance of use and stewardship). It captures the mission of the Lincoln Institute in far more subtle and creative ways than I ever could.

But the sonnet is Shakespearean, and therefore a tad inaccessible for the more prosaic among us. So as I was writing this column, I asked ChatGPT for its simplest explanation of “land policy.” This is what I got:

Land policy refers to the rules and regulations that govern the use, ownership, and management of land. It involves making decisions about how land should be used, who should have access to it, and what activities are permitted on it. Land policy can affect a wide range of issues, from urban development and environmental conservation to property rights and social equity. Its goal is to balance the interests of different stakeholders and ensure that land is used in ways that benefit society as a whole.

Yup, a great elevator pitch. The Luddite in me wants to ban the use of this devilish machine. On the other hand, it is a perfect example of technology accelerating our linguistic advancements in land policy in the same way that technology is advancing our ability to estimate and predict the value of land.

But to accelerate our progress, we need to advance from here. Maybe the bot’s sonnet and elevator pitch are not perfect. Maybe we humans can do better. So I put this challenge to you, dear readers: I already gave you my definition of land policy. Please give us yours, following the guidelines below. I’ll share my favorites in an upcoming column.

WHAT EXACTLY IS LAND POLICY, ANYWAY?

Send your best explanation, in poetry or prose, to publications@lincolninst.edu. Submissions should be no more than 100 words and should not rely on ChatGPT or any similar tool. The person who submits the best response* will earn the acclaim of the land policy community, a mention in this column, and the chance to select five books from the Lincoln Institute catalogue.

*as determined by a panel consisting of Lincoln Institute President George W. McCarthy

George W. McCarthy is president and CEO of the Lincoln Institute of Land Policy.

Image: The Bard reflects on the intricacies of land policy. Credit: claudiodivizia via iStock/Getty Images Plus.

E

n publicaciones realizadas en la última Época Dorada, Henry George advirtió acerca de los peligros sociales y económicos de donar plus-valías a propietarios que no habían hecho nada para ganárselas. En esta nueva Época Dorada, la desigualdad económica combinada con tasas de interés persistentemente bajas conduce al empeoramiento de la redistribución de la riqueza, ya que una parte cada vez mayor va a quienes tienen recursos, mientras que a cada vez más familias les resulta imposible pagar los precios desorbitantes de las viviendas decentes. Una consecuencia positiva de la pandemia es que se hizo un llamamiento a la voluntad política para abordar dos desafíos relacionados que tienen su origen en políticas de suelo: la crisis de asequibilidad de las viviendas y las brechas de riqueza provocadas por un racismo estructural.

Entre politólogos y gestores de políticas está surgiendo un consenso sobre que ambos desafíos son el resultado de políticas de suelo excluyentes. Si bien la exclusión es el factor principal, no es el único. Lo que es más importante, no existe una única solución que logre mágicamente que las viviendas sean más asequibles y, al mismo tiempo, disminuya las brechas de riqueza.

Decenas de gobiernos locales, estatales y nacionales (incluido el de Pasco, Washington, que se perfiló en este sentido) están reformando la zonificación residencial que anteriormente solo permitía viviendas unifamiliares independientes. La lógica de esta intervención es razonable. La zonificación unifamiliar limita el desarrollo, ya que impone restricciones como tamaños mínimos de lotes. Como resultado, aumentan los costos de las viviendas, lo que impide que las familias de ingresos más bajos las compren o alquilen en barrios atractivos. Al relajar estas políticas, será posible producir más viviendas a precios más económicos, al menos en teoría.

Los fundamentalistas del mercado aducen que los incentivos financieros son tan poderosos que, si logramos construir dos, cuatro o incluso doce unidades en un predio en el que antes se podía edificar solo una, la solución de la crisis de viviendas asequibles estará garantizada, gracias al aumento de la producción. Pero existe una gran diferencia entre permitir el desarrollo de múltiples unidades y el desarrollo de estas en sí. Y no hay ninguna garantía de que sean asequibles. Se han construido muchos condominios y departamentos prohibitivos en ubicaciones de alta densidad, como la ciudad de Nueva York, donde la escasez de viviendas asequibles es crítica. Una gran cantidad de ellos están vacíos. ¿Cómo pueden lugares como Pasco evitar que suceda lo mismo?

Parte de la respuesta tiene que ver con el mercado de viviendas. Como mencioné antes, la vivienda representa dos mercancías muy diferentes que se comercializan en el mismo mercado. Cada unidad puede satisfacer la demanda de un techo para una familia o la de rendimientos para ávidos inversionistas. Muchas veces, pero no siempre, una vivienda puede satisfacer ambas, cuando es el propietario quien ocupa la unidad. Sin embargo, cada vez más a menudo vemos familias que compiten por un techo disponible con inversionistas saturados de liquidez. A excepción de una intervención innovadora realizada por el Puerto de Cincinnati que analizaré en otro momento, suelen ganar los inversionistas.

A medida que la desigualdad económica global empeora, la brecha entre la provisión de techo y la oportunidad de inversión precipita una escasez inexorable de viviendas asequibles, aunque no de viviendas en sí. En los Estados Unidos, contamos con alrededor de 20 millones más de unidades habitacionales que hogares y hay más viviendas que hogares en todos los mercados de viviendas del país. Según el censo estadounidense, incluso en un mercado reducido como el de Pasco, hay 23.126 unidades habitacionales, pero solo 22.174 hogares. El mercado metropolitano en el que se encuentra Pasco contiene 106.104 unidades habitacionales y 100.336 hogares. Si bien la sobreoferta no es grande, es un buen ejemplo: nuestro problema no es la oferta, sino el tipo de viviendas que ofrecemos (o permitimos que se ofrezca).

Además, la tierra es una mercancía que se comercializa en muchos mercados, como bien de inversión y como bien de usos múltiples: residencial, industrial, comercial y agrícola. El precio del suelo deriva de una compleja combinación de factores sociales, legales y económicos que están prácticamente fuera de la égida del propietario. Si más personas emigran a una ciudad o a un barrio, el valor del suelo sube. Si se realizan mejoras en infraestructura, como tratamiento de aguas residuales o transporte accesible, el valor del suelo sube. Si las políticas locales permiten un desarrollo más intensivo en un predio, su valor aumentará.

¿Quién gana cuando se permiten edificaciones multifamiliares en lotes que solían ser unifamiliares? Los propietarios que reciben plusvalías caídas del cielo están entre los grandes ganadores. Este aumento de la plusvalía pone a los propietarios de la zona en riesgo, ya que puede aumentar los impuestos. Si los cambios de zonificación no se diseñan como parte de una estrategia más amplia que apunte a abordar la capacidad de pago, pueden propiciar desplazamientos sin quererlo. Los urbanistas de Pasco lo saben y están elaborando un conjunto de tácticas integrales y equilibradas para que su comunidad siga siendo asequible. 

Los antecedentes de exclusión racial del país complican aún más los mercados del suelo y la vivienda, y se eluden todas las iniciativas para hacer frente a esta. Históricamente, restricciones de escritura, cláusulas legales y otras prácticas explícitas, aunque hoy en día ilegales, garantizaron la exclusión de las personas de determinados barrios en función de su color de piel, etnia o afiliación religiosa. A esto se sumaron prácticas financieras descaradamente racistas que se establecieron en los orígenes del sistema moderno de financiamiento de viviendas. Durante seis décadas, hemos intentado luchar, con poco éxito, contra estas formas de racismo estructural a través de políticas públicas. Esta historia sirve como moraleja.

A partir de la promulgación de la Ley de Derechos Civiles de 1964, la Ley de Vivienda Justa de 1968 y la Ley de Igualdad de Oportunidades de Crédito de 1974, la nación prohíbe formalmente la discriminación en materia de viviendas y préstamos. La Ley de Reinversión Comunitaria de 1977 impuso más obligaciones de hacer sobre entidades crediticias reguladas a fin de satisfacer las necesidades de crédito de sus comunidades. Aun así, en 2018, el Centro de Periodismo Investigativo analizó 31 millones de hipotecas y descubrió que las entidades crediticias reguladas negaban hipotecas convencionales a personas de color, en un porcentaje significativamente más alto que a las personas blancas en 61 áreas metropolitanas, incluso después de controlar sus ingresos y otros factores socioeconómicos. La brecha racial nacional en cuanto a tasas de adquisición de viviendas es peor hoy que en 1960, cuando comenzaron las iniciativas para abordar la discriminación en materia de vivienda. 

Cerrar la brecha racial de la riqueza requerirá mucho más que nivelar el campo de juego financiero y producir más unidades habitacionales. Contar con viviendas estables y asequibles en zonas de grandes oportunidades es fundamental para el éxito económico de las familias a largo plazo. Pero al incrementar el parque de viviendas no aumenta necesariamente la disponibilidad de viviendas asequibles para familias de bajos ingresos, ni se garantiza que las poblaciones históricamente excluidas tengan acceso a oportunidades para adquirir viviendas que generen riqueza en barrios prósperos.

En casi todos los mercados de viviendas de los Estados Unidos, estamos produciendo demasiadas viviendas del tipo incorrecto y permitiendo que el parque actual quede por fuera del control local. Los alquileres cada vez más altos alientan la transformación de hogares unifamiliares en unidades para alquiler a una escala sin precedentes. Los fondos de inversión inmobiliaria en viviendas unifamiliares para alquiler se han convertido en una excelente oportunidad de inversión. Según CoreLogic, los inversionistas adquirieron más del 25 por ciento de todas las viviendas unifamiliares que se compraron en los Estados Unidos en los últimos dos trimestres de 2021. Una sola reforma de zonificación no cambiará la manera en la que funciona el mercado, y nada hará que el capital global deje de superar las ofertas de las familias que necesitan un techo en las transacciones de viviendas en barrios atractivos, a menos que se tomen otras medidas.

Al redesarrollar antiguas zonas de viviendas unifamiliares, debemos implementar fuertes requisitos de inclusión que obliguen a los propietarios a construir viviendas asequibles. Además, es necesario brindar y proteger oportunidades para que familias que históricamente quedaron excluidas compren casas asequibles y aumenten su patrimonio. En lugar de regalar derechos de desarrollo adicionales a los propietarios, estos deberían venderse. Los derechos de desarrollo se comercializan activamente en muchos mercados privados y algunos públicos de los Estados Unidos. Los municipios podrían recaudar miles de millones de dólares con la venta de estos derechos, y las ganancias se podrían utilizar para iniciativas que aborden la brecha racial de la riqueza mediante, por ejemplo, la provisión de ayudas generosas para pagar anticipos para viviendas o reducir los impuestos sobre la propiedad inmobiliaria.

Una vez que hayamos establecido un suministro razonable de viviendas asequibles, debemos preservarlas. Para esto, habrá que proteger el parque de viviendas asequibles de los mercados de capital global. Esto puede lograrse fácilmente si se aplican impuestos más altos sobre las ganancias de capital obtenidas de transacciones inmobiliarias especulativas. En Taiwán, los impuestos sobre la plusvalía tuvieron un efecto paralizador sobre la especulación inmobiliaria. Además, las restricciones de escritura pueden limitar los precios de venta futuros. Acuerdos de propiedad alternativos, como cooperativas de patrimonio limitado o fideicomisos de suelo comunitarios, pueden garantizar una capacidad de pago permanente. Si no actuamos ya, en las próximas décadas enfrentaremos crisis continuas de vivienda asequible. Pero es importante advertir una cosa: limitar la ventaja financiera para preservar las viviendas asequibles obstaculizará nuestros esfuerzos para eliminar las brechas raciales de la riqueza mediante la adquisición de viviendas. Esto ilustra los desafíos de intervenir en sistemas complejos. Una vez que reconozcamos la complejidad, podremos considerar las posibles negociaciones para encontrar un compromiso práctico y aceptable. 

En el Instituto Lincoln, aplaudimos el reconocimiento de las políticas de suelo como el origen de los mayores desafíos sociales y económicos. Pero las intervenciones simplistas en sistemas de suelo y vivienda complejos no servirán para hacer frente a estos desafíos asombrosamente intrincados. No podemos confiar en el incremento de la oferta de viviendas como si fuera una solución mágica. Debemos sumar otras políticas a la reforma de zonificación y probar distintas combinaciones en un proceso iterativo. A medida que avanzamos, debemos tener presentes las palabras de H. L. Mencken: “Para todo problema humano hay siempre una solución clara, plausible y equivocada”.

Imagen: Este dúplex en Portland, Oregón, es un ejemplo de vivienda “intermedia faltante” (o missing middle), que puede ofrecer opciones más asequibles en barrios que antiguamente eran unifamiliares. Para que sean verdaderamente efectivos, los cambios de zonificación que permiten la disponibilidad de este tipo de viviendas también deben exigir que estas sean asequibles y formen parte de una estrategia de vivienda más amplia. Crédito: Biblioteca de fotos de viviendas intermedias del Instituto Sightline vía Flickr CC BY 2.0.

In past issues, I have frequently bemoaned our cultural affinity for simple solutions to complex problems and reminded readers that there is no easy fix for the housing affordability crisis. But in the spirit of New Year’s resolutions—and recognizing that it’s easy to pillory “flavor of the month” solutions and harder to put forth viable alternatives—I’ll take a stab at describing an approach to housing that I think can be effective.

Complex problems need to be attacked on multiple fronts. To confront the affordable housing crisis, we need to do three things, at a minimum. First, we must defend and preserve our current stock of affordable housing. Second, we must identify and fix systemic problems that impede our ability to produce new housing. Third, we need to identify and cultivate new opportunities, incentives, and approaches that expand our productive potential and facilitate production.

We need to build a portfolio of solutions with multiple policies in each of these categories. The most recent issue of Land Lines documents a few ways policy makers are doing that. It includes a feature on the increasing calls for zoning reform at the state level—and local resistance to those calls—by Anthony Flint. Loren Berlin offers a story on a heroic undertaking by the Port of Cincinnati to keep the city’s single-family housing stock available for purchase by local families and out of the hands of outside investors. Jon Gorey examines efforts to preserve and expand manufactured housing, a mostly overlooked but critical component of the nation’s affordable housing supply. For my part, I’ll offer a contribution to the third category, a land-centric approach with great potential to expand production: adaptive reuse of commercial buildings.

According to the commerce industry organization ICSC, there are 115,857 shopping centers in the United States. This includes 1,220 large malls (with an average of around 900,000 square feet of retail space and 70 acres of land); 68,936 strip malls (averaging 13,000 feet of retail space and two acres of land); and thousands of other discount centers, factory outlets, and neighborhood centers (accounting for more than 4 billion square feet of retail space and 400,000 acres of land). Even before the pandemic, a significant share of these centers was imperiled by online retail. Real estate insiders have long predicted that one-quarter of large U.S. malls were at risk of closing, and the pandemic only accelerated this decline. Although vacant malls became convenient sites for mass COVID testing and vaccinations, insiders began to predict that more than one-third of large malls would be vacant or abandoned in the next few years.

Crisis and opportunity are frequent bedfellows. The retail crisis offers what might be our best opportunity to solve the housing crisis. For example, in the San Francisco Bay Area, one of the toughest housing markets in the country, Peter Calthorpe estimates that we could build a quarter of a million new housing units by repurposing underutilized retail space along a single roadway—El Camino Real—that runs some 40 miles from San Jose to San Francisco through 16 municipalities. This would help alleviate the severe housing shortage in the region, and it would create sufficient residential density to support public transit, contributing to state and national efforts to mitigate the climate crisis. And the residential growth might generate sufficient foot traffic to support multiple commercial uses. With this three-fer, the big question is, why hasn’t redevelopment of El Camino Real already begun? Mostly because of multiple manmade, complicating factors.

As I’ve noted before, redevelopment is much harder than development on greenfield sites. One needs to undo whatever had been done on the site, while orienting multiple stakeholders with different interests toward a shared vision. To make matters worse, there are significant manmade roadblocks. First, adverse fiscal incentives interfere with jurisdictions’ willingness to consider changing land uses. Commercial property generates a big share of local revenue, not only through property taxes, but also through the local share of the sales tax and other fees and charges. Residential redevelopment might replace only a small share of the lost revenue. Second, redevelopment projects are difficult to finance. New visionary projects might excite developers; they signal uncertainty and risk for lenders and underwriters. Third, redeveloping a commercial corridor into residential or mixed-use requires zoning changes, which are notoriously fraught. In the case of El Camino Real, 16 zoning boards would need to approve rezoning for the project to proceed. While it might not require unanimous participation among all 16 cities and towns, a critical mass would be needed for the redevelopment to manifest its potential.

Just because it is hard does not mean redeveloping commercial properties into higher-density, mixed-use developments cannot be done. Each of the noted obstacles can be overcome, and all have been overcome in other places. For example, one of the largest development projects in the country, the Tysons Partnership in Tysons, Virginia, is redeveloping a 2,700+-acre commercial district into a transit-friendly, mixed-use development. The project has been underway for more than a decade and already includes 11 multifamily residential buildings. The Partnership plans to quadruple the residential population of the formerly prototypical “edge city,” which housed around 25,000 people but employed around 125,000. They are leveraging four new stops on the Silver Line of the Washington Metro to become the urban center of Fairfax County, hoping to become the poster child for the “new new urbanism.”

In Memphis, a Sears distribution center that was abandoned for almost three decades was redeveloped into a “vertical urban village” called Crosstown Concourse. The 10-story building on 16 acres of land now hosts a charter school, a performing arts center, more than 600,000 square feet of commercial space, and 270 apartments. It is already catalyzing new development in the neighborhoods that surround it.

Outside of Seattle, developers are building a new anchor tenant for the suburban Alderwood Mall—300 apartments with underground parking. This will compensate for the loss of their former anchor, Sears; provide much-needed housing in a hugely stressed housing market; and provide a base of consumers to shop in the remaining stores in the struggling mall.

Although they might not be as lengthy as El Camino Real, there are hundreds and hundreds of underutilized commercial corridors across the country. If we could redevelop them as medium-density, mixed-use developments, we could put a huge dent in the current national housing deficit. There is also no shortage of abandoned or underutilized commercial buildings like Sears Crosstown; half-vacant commercial districts like Tysons; and struggling or abandoned megamalls like Alderwood that offer similar prime opportunities for redevelopment.

By my very conservative estimates, if we redevelop 20 percent of these commercial sites to low- to medium-density mixed-use standards (10 homes per acre), we could add 1.1 million new housing units and preserve millions of square feet of commercial space with a better shot at vibrancy. If we redevelop 25 percent of the sites at 15 homes per acre, we could add 2.1 million housing units. And if we could redevelop 30 percent of the sites at 20 homes per acre, we could add 3.4 million new housing units.

This is not a technical challenge. We cracked the code on adaptive reuse decades ago. We need to simplify the process to facilitate scaled redevelopment and establish new, more effective public-private partnerships to get it done. The public sector needs to step up to de-risk projects through accelerated permitting, co-financing, and smart financial incentives. The private sector needs to quit trying to build on virgin land and find more creative ways to redevelop obsolete sites. If you want to visualize the kinds of developments that are possible, look no further than Julie Campoli’s masterpiece Made for Walking, published by the Lincoln Institute in 2012. With thousands of sites to choose from, we can establish how to produce and reproduce the kinds of neighborhoods described in the book and reduce the perceived risks of development with each successful project.

The beleaguered commercial sector offers most of the elements needed to address our current housing crisis. It has land that is already served by basic infrastructure—water, sewer, power—and that is usually accessible to transit or otherwise surrounded by parking. It often sits in prime locations. By mixing uses, we offer two huge benefits for the commercial side: workers and customers. But the societal benefits are even more profound. So let’s pursue this strategy, along with single-family zoning reform and affordable housing preservation, and see if we can resolve the national housing crisis once and for all.

George W. McCarthy is president and CEO of the Lincoln Institute of Land Policy. 

Image: A crowd gathers for the opening of Crosstown Concourse, a former Sears distribution center in Memphis, Tennessee, that was redeveloped into a mixed-use space containing a charter school, retail space, apartments, and a performing arts center. Credit: Crosstown Concourse.

Every year, the Board of Directors of the Port of Greater Cincinnati Development Authority makes dozens of resolutions. Most relate to buying or renovating specific properties, approving budgets, creating committees, and other standard orders of business. But in December 2021, the board issued a different kind of decision. Resolution 2021-34 authorized the agency, commonly known as the Port, to proceed with an unprecedented and ambitious plan: securing and spending up to $16.25 million to purchase and rehabilitate a portfolio of 194 single-family rental properties in a handful of largely low- and moderate-income neighborhoods in and around Cincinnati.

It would be a bold move for any local government authority to buy so many properties at once, but especially for an agency without experience owning occupied homes. The Port, jointly established in 2000 by the City of Cincinnati and Hamilton County to promote economic development in the metro area, operates a land bank that manages hundreds of properties at any given time, redeveloping them and returning them to productive use; it also invests in the construction and renovation of single-family homes and commercial and industrial properties. But this would be something altogether different. The vast majority of these homes would come with tenants.

Then again, that was the point: to try something different, to fight back against the institutional investors who have been buying up the area’s affordable housing stock. Today, outside investors purchase about one in five single-family homes in Cincinnati. This mirrors a national trend: institutional investors made 24 percent of single-family home purchases in 2021. The results of this property grab are the same in Cincinnati and across the country: higher rents, lower rates of individual homeownership, and less affordable neighborhoods.

The Port took action because it wanted to keep these 194 properties—which are located throughout the city and county, with many concentrated in the neighborhoods of Price Hill, Westwood, and Springfield Township—out of the hands of corporate buyers. The agency also wanted to preserve the pathways to affordable homeownership that these homes could offer current tenants and other local residents.

A dozen private investors were bidding on the portfolio, and the Port was concerned that most intended to continue with the previous owner’s business model of absentee landlords, bare-minimum maintenance, market-rate rents, and hostile eviction practices, a cash-cow approach for investors that wreaks havoc on local housing markets. The Port team knew it would need to act quickly and aggressively to win the bid.

This is the story of how a local, quasi-public agency pulled off a bit of a coup against powerful market forces, of what comes next when that agency suddenly becomes a landlord, and of the lessons the Port’s experience could offer other cities grappling with increasing corporate ownership of the nation’s limited supply of affordable homes.

Predatory Investors in Legacy Cities

To understand how the Port came to own these properties, it’s important to consider what was happening in Cincinnati when the portfolio became available. The local housing market was, and still is, one with relatively low home prices. In October 2021, the median home sale price was $213,000 in Cincinnati, compared to $378,000 nationally.

This creates the perfect market conditions for institutional investors to swoop in, says Alison Goebel, executive director of the Greater Ohio Policy Center. “Investors think they will get a good return here, especially the ones who are coming from outside of Ohio and are used to seeing higher home prices,” Goebel says. “They see that the home prices here are low enough that they can afford to buy a bunch of properties and make money on the rents, but the prices aren’t so low as to give them pause. They see it as a good deal.”

These market conditions are not unique to Cincinnati, says Goebel, who has coauthored two Lincoln Institute Policy Focus Reports on the challenges and opportunities facing postindustrial cities in the United States (Equitably Developing America’s Smaller Legacy Cities and Revitalizing America’s Smaller Legacy Cities). Also known as legacy cities, such places experienced substantial economic and population decline in the second half of the 20th century. Most of these former economic powerhouses are in the Midwest and Northeast; they vary significantly in size, from very large cities like Detroit and Baltimore to smaller ones like Gary, Indiana, and Worcester, Massachusetts. Roughly 17 million people live in legacy cities, with per capita and household incomes that tend to be lower than those in non-legacy cities, making access to affordable homeownership both more critical and further out of reach.

Both the Port and the Greater Ohio Policy Center are participants in the first national community of practice established by the Lincoln Institute’s Accelerating Community Investment initiative (ACI), which seeks to mobilize investment in low- and moderate-income communities and bring new partners to the community investment ecosystem. “Building stronger community investment ecosystems is essential for achieving more equitable redevelopment in places across the nation,” says Robert J. “R.J.” McGrail, senior research fellow at the Lincoln Institute and director of the ACI initiative. “This work is especially important now, when low-income and moderate-income communities are facing new challenges from deep-pocketed institutional investors.”

The staff at the Port had long been aware of the increasing presence of outside investors in the local housing market. In early 2021, they decided to do some digging. By analyzing property records from the Hamilton County Auditor’s office, the Port discovered that institutional investors owned more than 4,000 homes in the area. As was the case in cities across the country, many single-family homes that had been registered as owner-occupied a decade earlier were now listed as rental properties.

Further research also confirmed a troubling suspicion: an opaque connection seemed to exist among the most negligent property owners. The Port team was able to map networks of limited liability corporations (LLCs), many of which were related to just a few central entities. In some cases, properties were transferred between LLCs multiple times a year. These investor-owned properties were primarily concentrated in low- to moderate-income neighborhoods.

The Port staff and board were still digesting this information when a call came from Colliers, which was managing a portfolio of foreclosed rental homes. The properties had most recently been owned by Raineth Housing, an institutional investor based in Los Angeles that had gained local notoriety for being delinquent on its property taxes and neglecting maintenance to the point where its properties had become, in the words of a lawsuit filed by the city in 2019, a “public nuisance.” Now they were going up for sale. Would the Port want to bid on them?

“My deep conviction is that we should use the powers and expertise of this agency to make the biggest positive impact we possibly can,” said Laura Brunner, president and CEO of the Port. “So when we were suddenly faced with the opportunity to do something that was possible and where, in this case, we saw a moral imperative to act, there was no chance in the world that we would say no.”

Putting a Plan Together

Neither the Port’s budget nor its strategic plan included the acquisition of nearly 200 occupied single-family homes, so the staff had to move swiftly to pull together a bid. After securing informal support from the Port’s board, Brunner and her team met with more than a dozen area organizations active in the housing space to confirm that what the Port wanted to do made sense from their respective positions in the community. Those groups included the Legal Aid Society of Greater Cincinnati, the nonprofit community development corporation Price Hill Will, the Cincinnati Metropolitan Housing Authority, the Home Ownership Center of Greater Cincinnati, and Working in Neighborhoods, a nonprofit founded by the Catholic community Sisters of Charity.

The Port pledged that it would keep rents at their current rates for a year—the average rent for the homes was $750—and work with tenants who were behind on their rent, rather than evicting them. Port staff also reassured the organizations that their commitment to supporting the tenants and their path to homeownership was sincere.

The purchase is an important part of the Port’s effort to address the racial homeownership gap in Cincinnati, where roughly 33 percent of Black households own their homes, compared to 73 percent of white households. “The racial wealth gap is the biggest problem we have in this county,” Brunner says. “We believe that real estate is the fastest way to solve it.”

With support from the nonprofits and after confirming that the portfolio—which included thousands of homes in St. Louis, Kansas City, and Cincinnati—could be broken up to allow the Port to bid only on the 194 in the Cincinnati area, Brunner approached her board of directors for formal approval. She says the board—which has 12 members representing the business sector, half appointed by the city and half by the county—was “incredibly supportive from the beginning.” One of the big questions, though, was how to finance the deal.

“We knew we couldn’t look at every home. But we got some history on the financials, which gave us an idea of what we were dealing with,” says Todd Castellini, the Port’s vice president of public finance and industrial development. Castellini estimates that Port staff got to inspect about 30 of the properties. “We knew the homes weren’t in perfect condition, so we made a very conservative assumption as to what the homes needed. Some needed a lot, some needed a little, and some needed everything in between. Then we did some cash-flow analysis, and then made it even more conservative, and that’s how we got comfortable with the deal. We approached the deal not looking to make money on it but to break even, and we are confident we can do that.”

Port staff concluded that they needed to borrow $16.25 million—$15.5 million to purchase the homes and $750,000 for repairs and improvements, though the Port planned to cover the bulk of those deferred maintenance expenses with rental income. For the financing, the Port issued bonds with a term of 30 months, which would allow adequate time to assess, upgrade, and eventually begin selling the properties.

The Port was able to sell the bonds quickly, with the entire issuance purchased by a local entity that has been buying Port-issued bonds for the last several years. This longstanding relationship was critical, says Castellini: “They understand us. They’ve seen our financials. They know how we work. So it was easy for them to analyze us and the deal and to act quickly.”

Having secured a buyer for the bonds, Brunner and her team submitted an offer to buy the portfolio for $15 million. On the morning of the final bid, at the suggestion of the board, they increased their offer by $500,000 to make it more competitive. Critically, the Port offered a short timeframe for closing the deal, which worked to its advantage. Though three private equity firms also each offered $15.5 million, those bidders required a longer due diligence period, positioning the Port’s offer as the highest and best.

Not only had the Port won the sale, but this quasi-public agency had foiled a dozen institutional investors, a nearly unprecedented feat in the world of real estate investment. “Honestly, I think the acquisition—the whole project, really—is emblematic of many things we have done,” says Brunner. “I’d be wracked with guilt if we had just said that it was too hard or too risky or all the ‘what ifs.’ We have years of history of smaller examples, and this is just a more dramatic one.”

Taking Ownership

Since closing on the deal, the Port’s staff has learned a great deal about the portfolio. Many more of the homes were vacant than was represented, creating both opportunity—it’s easier to fix up empty houses—and challenge, since rental income was part of the financing formula. And many of the occupied homes are in worse shape than expected. Consequently, Brunner estimates that the Port’s improvement costs will likely be at least double what they originally anticipated, bringing the project total closer to $17 million.

LyDonna Turner, who lives with her children and grandchild in one of the houses now owned by the Port, confirmed that she had told the previous landlords about a broken garage door, a collapsed cabinet under her kitchen sink, and a problem with mice, but they never addressed the issues. Her situation is just one example of a backlog of 160 maintenance problems waiting to be addressed when the Port took ownership.

“On the one hand, that’s a financial challenge,” Brunner concedes. “On the other hand, those conditions really reinforce that we needed to be the buyer. We can’t just have all of these houses that are literally deteriorating in these neighborhoods.”

To maintain transparency and gain advice on a multitude of topics, from eviction prevention to homeownership training to potential tenant sourcing, the Port established an advisory committee. The agency also hired an experienced property manager who will handle operations and provide residents with the kind of attention and support they hadn’t received in the past. “It took us a long time to find a property manager willing to be as empathetic and responsive as we are,” Brunner says.

The Port has also partnered with local organizations to offer tenant credit counseling and homeownership preparation initiatives. Goebel notes that the city has a particularly strong nonprofit sector, and says that ecosystem of partners will be essential to helping current tenants become homeowners or finding new homebuyers.

At least 80 percent of the occupied properties were behind on rent payments when the Port took over the portfolio, with roughly 20 percent at least one year delinquent. The Port was able to provide rental assistance to close that gap, thanks to $600,000 of American Recovery Plan Act (ARPA) funds provided via the county’s Community Action Agency.

Though the houses may end up selling for closer to $130,000 than to the initially projected $120,000, they will still cost significantly less than Cincinnati’s current median single-family home price, which has continued to rise and had reached $230,000 by late 2022. And this will all happen without subsidies, Brunner is quick to add.

“Every other house we have ever sold we have had to subsidize,” she said. “Typically, that’s the way we have lived. But our pro forma shows that we can pay off our debt with a combination of rental income and the sale of the homes. Honestly, it boggled our minds for quite some time that 200 houses can be converted to homeownership without public subsidy. But they can.”

Nevertheless, Port staff are exploring the possibility of securing grants from the City of Cincinnati and Hamilton County for down payment assistance and to help lower the homebuyers’ purchase price.

The demand is certainly there, says Turner, who hopes to buy her own home one day. “I do have a couple of friends who have been looking to buy homes but haven’t been successful. So I think it’s a good idea for the Port to buy these homes and to offer them to the tenants first.”

Building Out the Portfolio

Since news of the Port’s purchase broke—and spread, earning coverage in national outlets including NPR and the Wall Street Journal—the agency has heard from receivers and property owners interested in discussing similar deals. At press time, the team was working to acquire a second portfolio of foreclosed homes, and it is eager to expand as much as the realities of financing allow.

With a property manager on board and tenant counseling in place, “it [would be logistically] easy for us to add properties to our portfolio,” Brunner says. “Honestly, I would like nothing more than to buy all 4,000 investor-owned properties that are in our county and get them all out. We may not be there yet, but the opportunity to add that many new homeowners to our market is significant.”

But building out the portfolio in a meaningful way will require corporate or philanthropic involvement, Brunner says. Last year, Brunner and her team participated in an ACI Local Investor Challenge, where they pitched the idea of a fund that could finance more opportunistic investments and, Brunner says, made connections that could help make that fund a reality.

Even as the agency explores the possibility of scaling up, questions remain about the current portfolio. For example, how can the agency ensure that properties remain affordable over the long term? According to Brunner, the Port is considering deed restrictions but has not yet settled on the best strategy for ensuring affordability—and, perhaps more critically, sustaining resident ownership. “We are less concerned with how long the buyer stays in the home and more concerned with who they sell it to,” she says. “We don’t want these homes sold back to investors.”

The Port is also reexamining how best to finance mortgages once the time comes. Port staff initially assumed that partner organizations would originate and service the mortgage loans. They are now considering keeping those activities in house to allow for more flexible underwriting guidelines and more “compassionate” collections, Brunner says. By self-servicing mortgages, the Port could help the individual mortgage holders establish a stronger borrowing and repayment history, and could eventually issue mortgage revenue bonds to repay the debt from the acquisition of the homes. Replacing the acquisition financing with a more traditional mortgage-backed security structure would allow the Port to reach a larger potential market of mission-oriented buyers.

That kind of shift could create a more sustainable business model for the Port and others interested in following the agency’s lead, says McGrail of ACI. “If the Port can move the financing out of the public sector and into the capital markets without risk to the mortgage holder, that becomes a strategy that is fully a market solution, and that feels potentially transformative to me in the bigger picture,” he says. “That feels like an actionable, testable, provable solution for getting the wrong type of property owners swapped out for the right ones.”

A Replicable Model?

For all Brunner’s enthusiasm, she is nevertheless aware of the David and Goliath dynamic underpinning the project and what that could mean for its scalability or replicability. “On the one hand, our acquisition of this portfolio is a big deal. On the other hand, we are talking about 200 houses and $15.5 million. That’s small potatoes in the grand scheme of this national challenge. And the fact that the purchase stands out so dramatically makes me wonder a lot about who the entities are out there that can move the needle on this problem.”

Brett Theodos, senior fellow and director of the Community Economic Development Hub at the Urban Institute, has a few ideas on that front. “There are land banks and sophisticated community development corporations and some development finance agencies that could serve this function,” he says. “With different actors there are different constraints. Most of them can issue bonds, but the question is whether they would work to push this sort of project forward. For those agencies, it isn’t altogether a new flavor combination so much as a willingness to say, ‘Yes, we have this purpose, too, and we are willing to put in the muscle to make it happen.’”

In other words, the Port’s acquisition is likely neither the story of a one-off victory for the public good, nor an easy formula that other cities can follow to facilitate these sorts of acquisitions. But housing experts agree that while some of the circumstances in Cincinnati may be rare, the fundamental strategy is replicable.

“It’s important to remember that this was a portfolio that was [in] foreclosure, so it was essentially a fire sale,” says Goebel. “These types of sales do happen, whether due to foreclosure or because the owner wants to retire, but they aren’t dependable. I’d say that in Ohio, we hear about these sorts of portfolios of single-family rental properties popping up for sale every 12 to 18 months.” When they do become available, it’s not a given that the broker or others involved would think to alert a quasi-public agency.

A second relatively unique piece of the story is the Port’s statutory construct, says McGrail. “The Ohio port authority statute has amongst the most robust set of powers I’ve ever seen in a public finance entity,” he explains. “In addition to giving port authorities the typical public finance powers needed to issue bonds, Ohio’s legislature has given them broad tax powers, allowed them to operate as land banks, and empowered them to be able to hold and redevelop a range of real estate across asset classes, including both commercial and residential property.”

He is quick to add that those powers are made more meaningful by the way Brunner and her senior leadership team use them. “They are a dynamic, multi-credentialed team that has adopted a community-first lens in a way that I think is a little unique for a quasi-public agency, because they do a lot of asking and listening before acting—and that understanding of local needs creates more tolerance for pursuing risk-adjusted goals.”

The Port’s board of directors deserves credit too, says Goebel. They could have easily stopped the project in its tracks. Instead, they not only approved it but also provided crucial guidance on the structure of the Port’s bid. “They need as many kudos for that as they can get,” she notes.

As this experiment continues to unfold in Cincinnati, Theodos urges other cities and investors to consider taking action, noting that plenty of housing markets need this sort of intervention. “The tide—these investors—is coming in quickly, and we are swimming very much upstream,” he says. “The Port is reacting in real time to directly address the problem, which is exactly what we need. We need it again and again, every number of months, and in every city.”

About the Accelerating Community Investment Initiative

The Lincoln Institute launched the Accelerating Community Investment (ACI) initiative in 2021 to mobilize investment in low- and moderate-income communities, especially those that have been excluded from access to mainstream financial and wealth-building resources. ACI began by convening a national community of practice, with more than 40 agencies and institutions participating from 14 states; the group has met virtually and in person to build partnerships, identify new investment opportunities, and share experiences and advice. The initiative has also held three Local Investor Challenges, spotlighting community investment opportunities in Cincinnati, New Orleans, and Texas. These sessions provide community of practice participants the chance to pitch investment-ready projects to the local investment community and get direct feedback—on the pitch and the projects—from potential investors. “The investor summit ACI held in Cincinnati led to a lot of relationships that could potentially allow us to scale our investment much more significantly,” says Laura Brunner, CEO of the Port of Greater Cincinnati Development Authority. “The relationships I have made through them have been invaluable.” In the year ahead, ACI will complete the initial eight-session run of its community of practice and share results, hold additional Local Investor Challenges, and make plans for new activities that support its goal of accelerating community investment across the nation. To learn more about ACI, contact program director Robert “R. J.” McGrail: ACI@lincolninst.edu.

Loren Berlin is a writer and communications consultant specializing in housing and economic opportunity. 

Image: Downtown Cincinnati from the Price Hills neighborhood, where many of the homes purchased by the Port are located. Credit: East Price Hill Improvement Association.