Ward 8 has never been able to access Federal Housing funds due to the program’s zip code based income guidelines. Basically 44313’s aggregate income levels were too high to warrant federal help, even though we ave are easy the need it. This has frustrated my predecessors on Council, the Adminstration and myself, especially when we look at the Zahn -Treeside neighborhood with a high concentration of rental units that need repair.
One obstacle to creating quality affordable housing is funding, as banks are reluctant to finance older properties in disrepair. The Planning Department has been exploring ways to utilize the City’s Community Development Funds to support rehabilitation of rental properties with low-cost financing options. Back in October, I introduced them to JCI Investments who’ve been successfully investing in mid-sized residential properties in Northwest Akron.
JCI’s model is to acquire properties with high vacancy rates, deferred maintenance and other factors that weaken the value of the property. They then work to invest and stabilize the properties without significantly increasing rents. In our meeting they identified a property at 441-485 Zahn Drive with 32 apartments in 8 buildings. They had negotiated a sale price, secured financing but there was still a gap that needed filled to acquire the units. We asked how the City could help.
Here’s the good news, after reviewing their proposal, Akron’s planning Department has secured a $400,000 short-term bridge loan for JCI to acquire the property using CDGB funds to invest in the neighborhood. Their plan show all units rented at below HUD maximum rent limits and will be paid ack in 2 years. I sponsored the legislation in Council and on February 2nd, it passed by an 11-2 vote( ironically 2 members of the Housing Committee voted against it). This private/public collaboration will produce important and positive outcomes for a neighborhood that has been unable to access Federal Funding.
I’m extremely grateful for the Planning Department’s innovation and the Mayor’s office support of this pilot loan program. More importantly, this loan will enable significant private investment in aging housing stock, keep rents in reach of families and promote the stabilization of this Ward 8 neighborhood.