CLEVELAND — At a former elementary school on Cleveland’s West Side, the corridors don’t lead to classrooms anymore. Lockers still line the walls. But they’re waiting for tenants – not kids – to stash their stuff.
A local development group is almost done turning the historic Nathaniel Hawthorne School into 37 apartments, with rents starting around $1,100 a month. The goal is to build a community that nurses, schoolteachers and young professionals can afford.
“It’s really hard to do projects like that and make them this quality,” Christopher Rini, the project manager, said during a tour of the building on Monday afternoon. “But … there’s ways to do it with creative financing – and a lot of time and effort.”
Now, city leaders hope to make tricky projects easier to pull off.
On Tuesday, Mayor Justin Bibb and officials from the LISC, a national nonprofit community development organization, announced the formal debut of an investment fund designed to meet a deep need for mid-priced housing.
The Cleveland Housing Investment Fund will provide flexible loans – and, in some cases, preferred equity – for developers of rental and for-sale housing. Those investments will be aimed at relatively small projects like Hawthorne, with less than 50 units.
The partners have amassed $38 million so far toward their $100 million fundraising goal. The city pledged $18 million in federal pandemic-recovery money toward the project. The remaining $20 million is coming from KeyBank, which has participated in similar funds in other cities, including Detroit.
“Our goal is to move as quickly as possible,” said Kandis Williams, executive director of the Cleveland office for LISC, formally known as the Local Initiatives Support Corporation.
Rents are rising, and there’s just not enough high-quality housing to go around, she said. In Cleveland, much of the housing that gets built is either high-end – in just a handful of neighborhoods that can support lofty rents – or heavily subsidized, using tax credits and other incentives to accommodate low-income tenants.
“This helps us to get that missing middle. And that’s what’s most exciting about this program,” Alyssa Hernandez, the city’s community development director, said of the new fund.
The typical loan will be $1 million to $5 million. Most of the projects won’t be in the hottest pockets of the city. Instead, officials are focused on neighborhoods where there’s not much private investment happening today.
“To me, the typical project that we would like to see is right on those commercial corridors,” Hernandez said, describing business districts that need some love. “Maybe there’s a storefront downstairs. And upstairs, there’s four units. Six units. We’ve just not had the tools to address that size and that scale.”
The partners believe the fund can help create 2,500 to 3,000 homes. That will take time – possibly 10 to 15 years. But the team's goal is to get the first projects moving this year.
LISC is overseeing the fund through an affiliate called LISC Fund Management. More information about the program – and an inquiry form for developers – is available on the LISC website.
An information session for developers will take place April 10 at Cleveland City Hall, starting at 3 p.m. The program will include technical help for emerging developers, small-scale developers and minority developers who are trying to gain a foothold in a difficult business.
“Development is expensive, and it’s risky, right?” said Hernandez, who described the program as both an economic development boost and a way to chip away at the housing crisis.
“I think the problem is so big that you could stick your head in the sand and say ‘We’re never gonna solve it,’” she said. “And that has obviously not been the approach of this administration. We’re gonna solve it. We’re gonna solve it one bite at a time. We’re going to be really smart with our dollars. We’re going to try to get more dollars wherever we can, and invest step by step.”
'All of the above'
Williams said the partners are looking at a broad range of projects.
They aim to help finance at least 100 for-sale homes. For apartments, the fund says that 51% of the units in a building must be earmarked for tenants who make less than 80% of the median income in the Cleveland area. That’s about $54,450 today.
“We’re looking at all of the above,” Williams said. “New construction. Preservation of existing structures. We know over time, we’ve lost many viable, beautiful buildings to demolition. And we want to be able to save the fabric of neighborhoods, too.”
In the Jefferson neighborhood, the old Hawthorne school had been sitting empty off West 130th Street. It was one of 19 properties that the city and the Cleveland Metropolitan School District offered up to developers in 2021 through a request for proposals.
Sustainable Community Associates, a Cleveland-based developer, bought Hawthorne in 2023. To make the apartment project feasible, at rents that people can afford in that part of the city, the company needed a layer cake of funding. That includes federal and state tax credits for historic preservation and debt from a civic-minded lender.
“This is really the first investment of its kind into Jefferson in a very long time,” said Rini, the project manager.
He expects the first tenants to move into the building in June. Most of the apartments are studios, one-bedrooms and two-bedrooms. In the old classrooms, chalkboards now line the living room and bedroom walls.
Then there are the ones Rini described as the “showstopper” units.
The auditorium is becoming a three-bedroom apartment, with the kitchen filling the stage. The gym is being transformed into a four-bedroom unit, where old basketball hoops will still hang on the walls.
“We need housing at every level,” said Rini, who hopes the Hawthorne development will spur other investments nearby.
“In … older, stable neighborhoods like Jefferson,” he said, “that kind of missing middle housing – both in price point and size – is really important. It’s really difficult. And I think we have a great opportunity to kind of push that forward in Cleveland.”
