Funding Priority Proposal #10: Financing to Build & Repair Homes
DELEGATE UPDATES:
Shared Goal
Akron residents have greater access to safe, well-maintained, and affordable housing.
Outcome
More Investment in Homes & Neighborhoods
Context for Proposals 8–12
Proposals 8–12 show different ways Akron could invest housing dollars. Each one helps a different group, works in a different way, and tries to fix a different housing problem. You don’t have to pick just one. Your facilitator will guide your Trust through an activity where you compare these five options and decide which ones matter most for Akron.
The Proposal
This proposal would create a local lending fund that offers low-interest loans to builders and nonprofits so they can build or repair housing in neighborhoods where banks are unlikely to invest.
In many Akron neighborhoods, the cost to build or fix a home is higher than what that home will be worth when it is finished. For example, building a modest home in Ohio can cost around $350,000, while homes in some Akron neighborhoods are valued closer to $70,000 to $100,000.
Because of this gap between the cost of building a home and what it will be worth once built, traditional lenders often will not finance projects in those neighborhoods. As a result, vacant homes remain empty, homes and property values continue to deteriorate, and new housing is not built in areas that need it most.
This proposal would create a pooled fund using public dollars, private investment, and grants. A local financial organization would manage the fund and provide loans to developers and nonprofits for new construction or for buying and repairing existing homes. The loans would be at lower interest rates or with more flexible terms than a typical bank would offer. These types of loans are called “below-market loans.”
As the loans are repaid, the money would go back into the fund and could be lent out again. This allows the same dollars to support multiple projects over time.
Possible Benefits
Creates housing where the market is not investing
This approach supports new construction and rehabilitation in neighborhoods where private financing is not available, increasing the supply of quality housing.
Funds can be reused over time
Because loans are repaid, the same pool of money can be used again for future projects, allowing the impact to grow over time.
Vacant and deteriorating properties can be restored
Rehabilitating or rebuilding homes can reduce blight, improve safety, and stabilize neighborhoods.
Local priorities can guide investment
Because the fund is locally managed, it can focus on affordability, neighborhood needs, and housing quality—not just financial return.
Possible Tradeoffs
Public funding may not fully reach residents
Some of the benefits may go to developers or landowners instead of lowering housing costs.
Some projects may not need support
Without clear rules, funds could go to projects that would have happened anyway.
Projects depend on other funding
If outside funding does not come through, projects may be delayed or not built.
Some loans may not be repaid
The fund is intended to take on riskier investments, so some projects may fail and reduce available funds.
What $100,000 Per Year For 10 Years Could Do
An investment of $100,000 per year could support approximately 40 housing units over 10 years, depending on how funds are combined with other investments and reused over time.
When combined with private and nonprofit investment, the funding could support about 4 units per year (roughly 40 units over 10 years)
As loans are repaid, funds can be reused to support additional housing over time
Repairing existing homes may cost less than building new ones, which could increase the number of units supported.
The total number of homes depends on how much outside funding is secured, how quickly loans are repaid, and the types of projects funded.
Note: These $100,000 examples are meant to help you compare the options. Actual costs and results will vary based on program design and may be higher due to administrative needs.