Strategic, Scattered-Site Development Preserves Affordability in Thriving, Historic Cincinnati Neighborhood

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Strategic, Scattered-Site Development Preserves Affordability in Thriving, Historic Cincinnati Neighborhood

 

Until the 1950s, Cincinnati's 360-acre Over-the-Rhine neighborhood had been an industrial area, originating in the 19^th century as a dense neighborhood populated with working-class immigrants. Despite decades of stagnation driven by suburbanization and the decline of local industries, the neighborhood largely had been spared the demolition associated with urban renewal, leaving much of its historic fabric preserved. In 2002, Over-the-Rhine embarked on a successful revitalization initiative thanks to the joint efforts of neighborhood organizations, the city, and public-private partnerships. At the time, the neighborhood was characterized by high vacancy and crime rates as well as a heavy concentration of deeply subsidized housing that was underfunded and in poor condition. The homeownership rate then stood at 4 percent, convincing the Cincinnati Center City Development Corporation (3CDC) that the best strategy to revitalize Over-the-Rhine was to promote homeownership and market-rate development along with revitalizing key neighborhood anchors, including Washington Park and the Cincinnati Music Hall.

The strategy worked, and as market-rate and condominium development took off during the subsequent decades, the locus of need in the neighborhood shifted toward ensuring that Over-the-Rhine's historic affordability would not be lost amid gentrification and that the neighborhood would remain affordable for households across the income spectrum. In June 2022, developer Model Group, in partnership with 3CDC, completed the Willkommen, a 163-unit, scattered-site project that will help ensure that the Over-the-Rhine neighborhood remains broadly affordable.

Project Details

The Willkommen consists of 20 buildings, 16 of which are renovated historic structures and 4 of which are newly built. Of the 163 housing units in the Willkommen, 56 rent to households earning no more than 50 or 60 percent of the area median income (AMI), and 32 rent to households earning no more than 80 percent of AMI. The remaining 75 units rent at market rates. Units range from efficiency studios to three-bedroom apartments. Although Cincinnati is generally a car-dependent city, the dense, walkable fabric of the Over-the-Rhine neighborhood allowed developers to forego onsite parking at the Willkommen; this omission did not meaningfully impact demand, and 95 percent of units were leased within 1 month of the project's completion.

The Willkommen also includes 19,500 square feet of commercial space, enhancing the street life and vitality of the mixed-use neighborhood. One longtime business, the Alabama Fish Market, currently occupies part of the new commercial space. The 20 Willkommen buildings are spread across 4 distinct "clusters" that the development partnership identified as key nodes for enhancing connectivity among parts of the neighborhood that are already thriving. The renovated historic buildings received Enterprise Green Communities certification, and the new buildings received Leadership in Energy and Environmental Design Silver certification. In addition, the Willkommen received a 2023 Merit Award in the Block, Street, and Building category from the Congress for the New Urbanism.

Financing

The Willkommen's number and variety of funding sources reflect the project's complexity. Low-income housing tax credits, HOME Investment Partnerships funds, and state and federal historic tax credits supported the income-restricted units. Opportunity Zone funding, New Markets Tax Credits, and state and federal historic tax credits supported the market-rate units and commercial space. The combination of the rehabilitated original buildings and new construction also helped Model Group meet certain funding requirements for affordability. For example, funding sources for the affordable units required Model Group to include a certain number of family-sized (two- and three-bedroom) units as well as accessible units, a mandate that would have been harder to achieve in solely historic structures, reports Jennifer Walke, vice president of development for Model Group.

Anchoring and Connecting the Neighborhood

The Willkommen project had four primary goals, says Walke: creating mixed-income buildings that combine market-rate housing with subsidized affordable housing, increasing opportunities for street activity, activating vacant lots and underutilized buildings, and connecting already-developed areas of Over-the-Rhine through the four Willkommen clusters.

The first goal — creating truly mixed-income buildings — required the developer to exercise some creativity because of the differing constraints that each funding source imposed. Model Group worked with a team of lawyers to essentially "play Tetris" with the building, creating a complex condominium structure in which a market-rate unit could sit across the hall from a subsidized unit.

The newly constructed Willkommen buildings are also helping the developer achieve the second and third goals — creating opportunities for street activity and activating vacant lots. Because Over-the-Rhine is a historic district, Model Group worked within the district's design requirements to use traditional materials in a distinctive way. The four buildings feature brick façades that adhere to the neighborhood's aesthetic in a way that creatively enhances the streetscape. The commercial space also activates the street, and careful consideration of potential tenants by 3CDC, whose goal is to promote a vibrant local small business ecosystem, ensures that the commercial space enhances the character of the neighborhood, says Walke.

The cluster approach is helping stitch the neighborhood's urban fabric more cohesively, furthering the fourth goal. One cluster, along Liberty Street, builds on earlier revitalization efforts by connecting two already-developed areas, Washington Park and Findlay Market. Another cluster centers around Ziegler Park, which 3CDC had redeveloped previously and currently manages. The two other clusters serve as connectors between important neighborhood streets. Finally, the infill buildings are in some of the most challenging pockets of Over-the-Rhine. Here, the project's affordable housing component is stabilizing the neighborhood while helping ensure that gentrification does not displace lower-income residents.