There is lots of talk these days in cities across the country and very much in Ohio City about the disappearance of “affordable” housing for purchase. While every home is affordable to someone, most people are talking about housing that police officers, factory workers, teachers and most other professionals can afford to buy – the traditional middle class, people in the $45,000 - $75,000 range for gross household income. In a few places in the country, high demand for housing has taken the cost of home ownership out of reach of some of these people. In Burlington, Vermont, for example, where wages are similar to Cleveland, the median sale price of a house is $165,000.
Cleveland, however, remains remarkably affordable. According to the Cuyahoga County Auditor’s records, the median sale price of a house in Cleveland overall is $68,000; in Ohio City, the median sale price is only $55,200. In contrast, the median sale price of a house in Euclid, Cleveland’s cheapest suburb, is $80,000.
86% of single-family houses sold in Ohio City in the period of 1997-2002 went for less than $100,000. Less than 1% of housing is targeted at the upper income market. Yet some claim that they have to move out of the neighborhood because they cannot afford a house here. Perhaps the drawback of a stable neighborhood is that housing doesn’t turn over so rapidly, so less is actually available at any given time.
Perhaps not knowing what you can afford is another issue. The old rule of paying no more than twice your gross income for a house doesn’t apply since the 1970s, when it became common to include carpeting, landscaping, garage, appliances, and other amenities in the mortgage. Changes in financing have added more complications along with more opportunities. Finally, shopping for a house usually takes time, maybe months, if you are interested in a specific location.
So how do you find that house you dream of buying? Your first stop should be the Living In Cleveland Center (LICC), located on Euclid Avenue (781-5422). This office was created by the City under the Mike White administration to foster home ownership in Cleveland. It is an information clearinghouse. Not a lending institution in itself, people there can help you evaluate just how much you can afford to buy and what to expect when you go talk to a banker. Knowing how much you can afford saves you time in the shopping phase – you won’t waste time looking at things you clearly can’t afford, and you’ll focus your attention on what is being offered in your price bracket. You’ll also approach the banks as an educated consumer.
According to LICC Director, Jeff Kipp, there is absolutely no reason why a low-to moderate–income person with good credit cannot buy a house in Cleveland. There are some 25 different financing packages offered by several lending institutions that enable low- and moderate-income people to purchase and rehab a home. Most of these packages include no down payment and very low interest rates. The best part, and the major reason to buy rather than lease: the buyer gets all the equity that he has earned when he sells the house. As a wise man said, “If you’re not earning all the equity out of your house, somebody else is, and you’re just paying rent.”