Testimony in Support of House Bill 155 - Frank Ford, Western Reserve Land Conservancy (April 21, 2021)
Summary
Testimony in support of House Bill 155 by Frank Ford, Senior Policy Advisor at Western Reserve Land Conservancy, to the Economic and Workforce Development Committee, Ohio House of Representatives, dated April 21, 2021. It is titled The Connection Between Foreclosure, Nuisance Abatement, Blight Removal and Housing Market Recovery in Cuyahoga County. The testimony cites a Fannie Mae study that found 50% of all borrowers who received a high cost Subprime Loan would have qualified for a lower cost prime loan, and says smaller rural counties including Preble, Clark, Marion and Brown were among the top 10 hardest hit by mortgage foreclosure. It concludes that additional nuisance abatement resources are needed because resources are running out before the job is finished.
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“Testimony in Support of House Bill 155 - Frank Ford, Western Reserve Land Conservancy (April 21, 2021).”
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The Connection Between Foreclosure, Nuisance
Abatement, Blight Removal and
Housing Market Recovery in Cuyahoga County
__________
Testimony In Support of House Bill 155
Economic and Workforce Development Committee
Ohio House of Representatives
April 21, 2021
Frank Ford
Senior Policy Advisor, Western Reserve Land Conservancy
fford@wrlandconservancy.org
1
Causal Connections - Overview
●Mortgage lenders targeted low income communities in Ohio for
high interest subprime loans.
●Those loans had high rates of default and foreclosure.
●The foreclosure crisis in Ohio led to a high volume of housing
abandonment and blight.
●Pronounced visible blight undermined property value,
homeowner equity and property tax collection.
●Nuisance abatement and demolition of blighted properties over
the past decade has put housing markets on the path to recovery.
● BUT….the hardest hit communities are still struggling because
funding for nuisance abatement is coming to an end. 2
While mortgage foreclosure, property
abandonment and blight are most
associated with urban Black
communities, many small rural Ohio
communities were also impacted.
3
Smaller rural counties like Preble, Clark, Marion and Brown were among the
top 10 hardest hit counties by mortgage foreclosure over the past 20 years.
“Ohio Foreclosures 2016”, Policy Matters, November 2016. 4
Richland and Coshocton Counties were among the top 3 hardest hit by
foreclosure in 2015 and 2016
“Lingering Impact: Report on 2016 Foreclosure Trends”, Policy Matters, December
2017. 5
Lenders Aggressively Marketed High Interest Subprime
Loans In Low Income and Minority Communities
A Fannie Mae study found that 50% of all
borrowers who received a high cost Subprime Loan
would have qualified for a lower cost prime loan.
Source: “Financial Services in Distressed Communities”, Fannie Mae
Foundation, August 2001.
7
Two Areas Hardest Hit By Subprime Lending Have
Highest Vacancy and Abandonment
8
Foreclosure and Abandonment
Have Resulted In a Loss of Property Value and Homeowner Equity
Cuyahoga County 2000 - 2020
Parcels
with at Residential Percent of 2005-2006
least one and Land parcels with (peak years) 2020 Percent
filing since Bank class at least one Median Median Loss of African
CUYAHOGA REGION 2020 parcels filing Sale Price Sale Price Value American
East Side of Cleveland 35,229 78,621 45% $ 80,000 $ 35,000 $ (45,000) 80.74%
East Inner Suburb 27,159 85,605 32% $ 115,700 $ 94,000 $ (21,700) 52.32%
West Side of Cleveland 16,537 60,279 27% $ 89,000 $ 88,300 $ (700) 18.81%
West Inner Suburb 9,589 72,890 13% $ 133,000 $ 159,900 $ 26,900 3.45%
Outer Suburb 18,023 166,552 11% $ 173,000 $ 195,000 $ 22,000 9.14%
Total 106,537 463,947 23% $ 118,000 $ 130,000 $ 12,000 29.64%
Data Source: NEO CANDO at Case Western Reserve University.
Residential and Land Bank parcel count as of 4-11-21. The majority of Land Bank parcels w ere "residential" prior to being re-classified.
10
As the next chart will show, housing market
recovery is seen in all regions of Cuyahoga
County.
But the degree of recovery is not consistent in all
sub-markets.
Vacancy, abandonment and blight still
undermine market recovery in the areas that
were hardest hit by subprime lending,
foreclosure and abandonment.
Two areas hardest hit by subprime lending, foreclosure and blight are still
struggling to recover: the East Side of Cleveland (44%) and the East Inner
Suburbs (82%). They need blight removal resources to stimulate full recovery.
12
Blight removal over the past 10 years has put the East Side of Cleveland on a
path to recovery, but additional resources are needed to finish the job.
13
Estimates of Severe Distress and Potential Demolition
in Cuyahoga County As of April 2021
Cuyahoga Land Bank City of Cleveland
Estimate Estimate
Residential, Residential,
Commercial and Commercial and
Industrial That Will Industrial That Will
Likely Require Likely Require
Demolition Demolition
Cleveland 4,552 3,907
East Cleveland 418 418
Balance of Suburbs 605 605
Total 5,575 4,930
Sources: Cuyahoga Land Reutilization Corporation, City of Cleveland Building and Housing Department.
Both Cleveland and Land Bank estimate that 83% of the total are residential 1-3 family homes.
Combined industrial and commercial count varies from 5.7 % (Cleveland) to 7.5% (Land Bank).
The balance are small, medium and large apartment buildings.
14
Conclusion
Abatement and removal of blighted properties
over the past decade has been key to putting
hard hit communities on a path to housing
market recovery, i.e. recovery of lost homeowner
equity and recovery of lost property tax revenue.
But resources are running out before the job is
finished. Additional nuisance abatement
resources are needed to ensure the progress
these communities have made is not lost.
For further information
Contact:
Frank Ford
Senior Policy Advisor
Western Reserve Land Conservancy
fford@wrlandconservancy.org
16
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