Marc Lefkowitz | 09/29/08 @ 11:50am
"Small Scale Strategies that Work" and counteract the foreclosure crisis were discussed at the opening of CSU Levin College of Urban Affairs new Beyond Foreclosure series yesterday.
Entrepreneurs and nonprofit groups on the panel agreed small scale interventions have gained some notice in Cleveland, but it will take large scale efforts and more federal intervention if the recent stabilization in the market is to continue.
In only the last two months, foreclosures in Cleveland have begun to level off, according to Brian Mikelbank, associate professor of Urban Studies at Levin College, who pulled apart aggregate data on the region's home sales.
Still, the damage to both Cleveland and Cuyahoga County's home values are appreciable, with median sales prices dropping from $100,000 in 2004 to $60,000 in 2008.
"But, if you separate out those houses that did not go through foreclosure, prices held fairly stable," Mikelbank added. "So, we can look at that as an opportunity."
Meanwhile, foreclosed home values dropped to $40,000 average.
Housing value has not slipped evenly across the city, according to Lee Chilcote, III, new construction manager for Progressive Urban Real Estate. "The city is segmented into micro markets. Those that had strong home values were less impacted. I think it shows the resilience of these neighborhoods."
Mikelbank agreed with Cleveland Restoration Society executive director Kathleen Crowther that Cleveland would be best served concentrating its share of the $3.9 billion federal foreclosure bailout package that will eventually get divided among cities.
"Sprinkling it over the landscape won't have the same impact as preserving and increasing the strength of the strongest Cleveland neighborhoods," Crowther says.
Last year, the restoration society saw a significant drop in home improvement loans from $6 million in 2006, even though the loans are below prime rates.
"We could do thousands of home (restoration projects). The foreclosure crisis is freezing people's desire to move forward."
Homes that get restoration society loans see a 43 percent increase in appreciated value, Mikelbank added.
Historic times may call for new ideas such as the Cuyahoga Community Land Trust, which stabilizes property values by holding title to the land. The land trust has built five homes -all privately owned-and is a development partner for the six Cleveland EcoVillage Green Cottages, which broke ground this month.
The 200 land trusts nationwide have all weathered the storm of foreclosures better than the market, says Cuyahoga Community Land Trust director Marge Misak. Only two of the 3,100 owner occupied land trust properties nationwide have been foreclosed.
"And these are people who are at 80 percent of median income, the most at risk."
Deconstruction is 'unbuilding' homes and commercial buildings to salvage and reuse the old growth hardwood from their frames. It could absorb some of the foreclosure crisis blow and turn it into a business opportunity, says Chris Kious, co-founder of A Piece of Cleveland, which makes furniture from deconstruction wood.
It takes 10-12 unskilled laborers to deconstruct a typical Cleveland area home, but as the market develops for their products, it could help offset the higher labor cost.
How do we turn small scale into larger scale solutions?
"We need billions in federal investment because the market is not likely to get people where they can invest in housing on their own," Misak says.
"We need to get to scale and set targets," Kious says. "We would like to deconstruct 10 percent of the housing stock that the city's demolishing.
"Until we start setting those targets and putting federal resources behind it, we won't get there."