In Cleveland, builders interested in infill development can generally purchase a “land-bank lot,” or a parcel of city-owned urban land, for as little as $200. However, the purchase and permitting process for a single lot requires public hearings, discussions with local block clubs and development corporations, and approval from the City Council.
According to Bo Knez, owner of Knez Homes in Northeast Ohio, this process takes an average of 230 days, or just over seven months, for an individual project. However, Knez Homes has been able to develop and sell upward of 50 ready-to-build lots from land-bank holdings over the past year thanks to its partnership with the City of Cleveland and with Ohio City Inc., a local community development nonprofit.
Ohio City Inc. had originally devised the project as the country emerged from the Great Recession, with an aim to spur new development and investment in the neighborhood with both market-rate and affordable units. The nonprofit put out a request for quotes to more than 100 local builders and contractors, of which Knez ended up being the top choice.
“We were looking for people who were well-qualified, who were well-thought of, to invest in the neighborhood,” says Ben Trimble, senior director of real estate and planning at Ohio City Inc. “When we bring someone in we want someone that will match the neighborhood rather than detract from it.”
The partnership began with an infill project of three single-family homes, pulled together from land-bank lots and private land sources—the first of over a dozen infill projects that the partnership would produce. The nonprofit takes care of the land arrangements, while Knez takes care of construction. The infill projects have sold quickly, and one project was named Best Infill Project of the Year in the 2016 Cleveland Choice Awards from the Home Builders Association of Cleveland.
The Knez/Ohio City Inc. homes are designed by Dimit Architects of Cleveland, with some floor plan modifications by Knez. Potential buyers can choose from three façades and floor plans, all pre-approved by the proper review bodies. By the time the ready-to-build lots are sold to potential residents, bureaucratic issues are taken care of, and any home features chosen are already approved for construction.
Most of the homes are priced from $269,000 to $289,000, according to Cleveland.com, and range in size from 1,600 square feet to 2,000 square feet with two to three bedrooms. Ohio City Inc. has placed an income cap on roughly 20% of the homes built through the program, which means that they will be priced no higher than $199,000. Potential buyers of these homes must have a household income of no more than 80% of the area’s median income. In Cuyahoga County, where the median household income was $66,100 last year, a qualifying household would earn less than $53,000 a year.
These urban single-family homes appeal to young professionals, empty nesters, and families.
All of the homes in the Ohio City program also carry a 15-year property tax abatement granted by the city for meeting its green energy standard. The homes are Energy Star rated, and a typical Knez home has an average HERS score of 50.
Knez, once a largely suburban home builder, has shifted its market focus based on the demand for urban single-family housing with easy access to amenities, public transportation, and employers. In addition to the company’s work in Ohio City, it also builds single-family infill projects in Cleveland’s Midtown, Old Brooklyn, Tremont, University Circle, and Detroit Shoreway neighborhoods. It also has small-scale townhome projects in the works, such as The Nina and West Nineteen in Duck Island.
“When we first started in the city there wasn’t much residential construction going on,” says Knez. “Now, that has obviously changed. We have a very, very vibrant downtown. We have the Great Lakes, we have the river, we have the arts district, we have a ton of museums, we have the theater district, and we have one of the best hospital systems in the United States. So there are easy and obvious draws, and all of that is accompanied by a very low cost of housing.”
While many of downtown Cleveland’s newest residents are young professionals or empty nesters, Knez is surprised by the number of families with children that are moving into the city. “Most of the people that are moving into these units are not from the core of Cleveland,” Knez says. “They are from the suburbs, looking for a different type of lifestyle.”
Both Knez and Ohio City Inc. consider the project a success, both in terms of sales and in the synergy of the organizations involved. The city’s outdated building and zoning codes still make new-home construction difficult, but Knez is hopeful for future change.
“The city of Cleveland is taking strides to alleviate some of those roadblocks,” he says. “They have a very aggressive planning department that is in tune with how they would like the city to look. And they’re trying to move barriers, but as we know that’s always difficult to do.”
