This is the latest story in FreshWater Cleveland's series First Suburbs: A Closer Look, focusing on the suburbs surrounding Cleveland. Built mostly before the 1960s, these “first” suburbs face challenges ranging from urban sprawl to disinvestment. But shrinking news coverage reports mostly on crime. This series instead will look at the unheralded people and innovative programs that are making a difference, through a solutions-based journalism lens.
A tsunami of evictions and foreclosures is feared in Ohio and across the U.S. as federal moratoriums protecting renters and homeowners expire. And the surge is expected to be equally strong in Cleveland’s East Side inner ring suburbs.
On the rental front alone, a report from Cleveland nonprofit housing service provider CHN Housing Partners revealed 4,200 requests for emergency rental assistance in Cuyahoga County as of Aug. 14, with half of those renters living in suburban communities.
Though county-wide mortgage foreclosures are down from 241 to 40, as compared to the same six-month period in 2019, a rise in mortgage delinquencies tells a different story, according to a study released earlier this month by the Western Reserve Land Conservancy.
Per data from the Federal Reserve Bank of Cleveland, 90-day delinquencies in Cuyahoga County increased about 2.5% in the first half of 2020. Though not a large jump, observersexpect a continued upward trajectory in delinquencies barring a quick end to the pandemic.
Kamla Lewis, director of neighborhood revitalization for the City of Shaker HeightsThe reserve bank data is ominous for a population still not fully recuperated from the decade-old foreclosure crisis. Unemployment from COVID-19 further portends a wave of housing instability—particularly in Cleveland’s East Side suburbs where systemic racial inequities and an uneven economic recovery were already making an impact, even pre-pandemic.
But the news isn’t all bleak. Leaders in inner-ring communities are proactively providing residents with resources to mitigate the effects of income loss and, hopefully, reduce the likelihood of evictions and foreclosures.
“Our issues are irrespective of the moratoriums—we know that people have reduced incomes from layoffs or furloughs,” says Kamla Lewis, director of neighborhood revitalization for the City of Shaker Heights. “Our lowest-income groups were already leveraged in terms of housing payments, even before COVID. The real issue is getting payments made.”
In need of protection
Federal CARES Act moratoriums protected homeowners with federally-backed mortgages as well as those living in housing subsidized by the government.
But Ohio’s situation is more complicated, as the state never had an official moratorium on evictions.Instead, eight of Ohio’s largest municipal courts issued their own eviction suspensions, the last of which expired at the end of July.
Ninety-day mortgage delinquencies in Cuyahoga County have doubled January through June over the same period last year,representing a clear indicator of future foreclosures, notes Lewis.
However, the city is an active member of the Greater Cleveland Reinvestment Coalition (GCRC), an organization that has been tracking data on evictions and mortgage delinquencies since the outset of the coronavirus pandemic.
The coalition has crafted recommendations on rental support, along with funding for housing counseling agencies helping residents in danger of becoming unhomed.
Additionally, Shaker Heights is publicizing a $6.8 million county rental assistance program.The program aids residents within the city and county having difficulty making rental payments due to the ongoing virus emergency.
“It’s on our COVID-19 resource page on our city website; has been publicized through social media; was shared with all our neighborhood associations, local non-profits and churches for them to disseminate to their networks; was sent to all our apartment building owners; and was included in food bags distributed through the pantries,” Lewis says.
More help on the way?
As an early victim of the 2008 housing crisis,theCity of South Euclid is bracing for a second surge of foreclosures in light of a backlog of new mortgage delinquencies.
Sally Martin, housing director for the City of South Euclid and a chair on the reinvestment coalition’s executive committeeSally Martin, housing director for the city and a chair on the reinvestment coalition’s executive committee, says some renters arereceiving multiple three-day notices from landlords without intervention from COVID-stalled municipal courts.
“This is disproportionately affecting minority areas, mostly African-Americans,” says Martin. “These are people in service jobs at the lower end of the economic spectrum. They were waiting tables or working at places that shut down during COVID.”
Data from the Greater Ohio Policy Center’s Ohio Affordable Housing Learning Exchange estimates more than 713,000 Ohio renters could be evicted this year.
The inner ring’s weak housing market is also having a negative impact on bank lending, leading to investor activity where homes are bought for cash by landlords charging what they please in rent.
Coalition leaders are talking to banks about backstop loans around property taxes and mortgage delinquencies. Meanwhile, Martin would like to see Cuyahoga County put to better use the $215 million it received in CARES Act funding.
“The point of our advocacy is for the county to step up a little bit more,” says Martin. “Keeping folks housed is our biggest concern.”
The coalition group also supports the Neighborhood Homes Investment Act, a bill to create a tax credit for revitalizing single-family homes in distressed neighborhoods. The legislation requires that homes built or renovated be sold to households earning 140% or less of area median income.
“There’s advocacy at all levels,” Martin says. “Here in South Euclid, we want to be proactive and reach out. We were knocking door-to-door last year on tax delinquencies. It’s about being communicative with residents and seeing those delinquencies decline. “
Frank Ford, policy advisor for Western Reserve Land Conservancy and chair of the Vacant and Abandoned Property Action CouncilAlthough local moratoriums have ended, federal laws and regulatory rulings still provide tenant protections, notes Frank Ford, policy advisor for Western Reserve Land Conservancy and chair of the Vacant and Abandoned Property Action Council (VAPAC).
For instance, mortgage forbearance rights apply to property owners with a federally supported mortgage who can demonstrate a COVID-19 hardship.
Qualifying participants can obtain forbearance from payments for up to 180 days, requesting an additional 180 days, as necessary.
Some jurisdictions—among them Cuyahoga County and the City of Cleveland – are using CARES funding to provide rental assistance to landlords and tenants. As a best practice, courts should require plaintiffs filing foreclosures to certify by affidavit that their property isn’t eligible to receive rental assistance.
“A family renting a house may have a defense they don’t know about,” says Ford. “Courts should be very aggressive in raising this possibly when there’s a plaintiff, landlord and tenant in their court.”
An estimated 27% of U.S. adults missed their rent or mortgage payment for July, per a nationwide survey conducted by the U.S. Census Bureau.
For local communities already suffering from COVID-19, joblessness, and housing discrimination, the specter of homelessness is very real.
“The end goal is the economy comes back while moratoriums and rental assistance are used to bridge the gaps,” Ford says. “But those things haven’t happened as best we want. Congress should create a pool of funds dedicated for emergency rental assistance, because right now, it doesn’t appear we’re on the verge of economic recovery.”