Five-suburb vacancy survey

Avryonna Robinson, a surveyor for the Western Reserve Land Conservancy, uses a tablet to photograph a home in Euclid in July. The five participating inner-ring suburbs received parcel-level data about property uses and conditions within their borders. City building inspectors and other employees can update the database as homes are built, sold, rented, demolished, renovated or otherwise modified.

(Gus Chan/The Plain Dealer)

SOUTH EUCLID, Ohio -- This inner-ring suburb of 22,000 people has brought close to 1,200 once-vacant homes back into habitable shape over the last seven years.

But South Euclid's aggressive push to fight blight hasn't been enough to drive home prices back to their pre-recession levels. And this East Side bedroom community isn't alone.

More than a decade after the foreclosure crisis, South Euclid and its neighbors still struggle with depressing property values and other legacies of the housing bust. A report on housing conditions in five suburbs east and southeast of Cleveland shows the complex and nuanced challenges of Northeast Ohio's patchy real estate recovery.

About 38 percent of Cuyahoga County's residents live in inner-ring suburbs, very close to an urban center and more densely populated than more distant suburban areas. The five suburbs in the report -- Euclid, Garfield Heights, Maple Heights, South Euclid and Warrensville Heights -- collectively are home to an estimated 133,000 people. That's roughly 10 percent of the county's population.

Last summer, at least 98 percent of homes in each community received a rating of good or excellent from surveyors deployed by the urban-focused arm of the Western Reserve Land Conservancy. Those are better results than even the mayors of the suburbs expected.

Foreclosures are down. So are vacancies. Aided by the county, the Cuyahoga Land Bank and federal money, the suburbs have razed hundreds of dilapidated houses. With buyers and developers, they've worked to rehabilitate a similar number of properties.

And that effort is paying dividends, boosting the value of surrounding real estate.

But prices in some of the suburbs -- and certain neighborhoods in every suburb -- remain strikingly low.

The median, or middle, sale price in South Euclid is approaching $90,000 but was closer to $130,000 before the recession. In Maple Heights, buyers paid less than $50,000 each last year for more than half of the houses that changed hands, according to public records and listing-service data. Garfield Heights and Warrensville Heights recently surpassed that $50,000 median price.

Buyers are spending in the mid-$60,000s for a typical home in Euclid, by far the largest city in the study and the only one with access to the Lake Erie shoreline. But houses sell for tens of thousands of dollars less than they did at the top of the market in 2006.

There are other trouble spots. The number of homeowners who are behind on property-tax payments has skyrocketed since 2009, according to an analysis by Frank Ford, senior policy adviser at the land conservancy.

With pricing so low, "leaders in these communities are concerned that a process of 'filtering' will ensue, whereby landlords and homeowners spend less on the upkeep of their properties for fear they will not see a return on their investment," Jim Rokakis, director of the land conservancy's urban program, wrote in the report. "The decline in upkeep and standards keeps property values down, thereby reducing property-tax revenues and further stressing the economies of these communities.

"This begins a process of decline that is self-fulfilling and costly to reverse," he said. "The importance of developing a strategy of early intervention is critical, as it will be far more cost-effective to deal with this problem now than later."

Suburbs expect data to shape strategies

The five suburbs joined forces last year and secured a nearly $200,000 grant from the Cleveland Foundation to pay for the survey, the report and related technology.

The result is a mix of on-the-ground reviews of every piece of real estate within their borders; a database of detailed property information; and digital tools, including interactive maps, that will help guide public officials' decisions about demolition, rehabilitation and attempts to boost ownership.

For the foundation, the project was an unusual foray outside Cleveland's borders. But the inner-ring "experiment," as some of the participants described it, might become a template for a much bigger data-collection and analysis effort, spanning all of the county.

"This investment was also just to test this approach and really see if it can be adopted countywide," said Stephen Caviness, the foundation program officer who oversaw the grant.

Annette Blackwell, mayor of Maple Heights, views the survey as a "myth-buster."

She bristles at outside perceptions of her city, with a population of just over 22,000, as a rental community dominated by tenants relying on federal housing vouchers. The homeownership rate in Maple Heights did fall by almost 20 percent from 2000 to 2015, based on U.S. Census data. But 64 percent of homes there still are owner-occupied.

Ownership declines are one notable trend in the report, but they're far from unique to the county. The national homeownership rate peaked at 69 percent in 2004 and then slid in the wake of the financial collapse. It has been hovering below 64 percent.

Among the communities in the survey, Warrensville Heights experienced the smallest decline but has the lowest overall homeownership rate, at 43.8 percent. South Euclid has the largest share of owner-occupied housing, at 77.9 percent based on census estimates.

"We have more people who want to stay in our communities," South Euclid Mayor Georgine Welo said. "But they might want a first-floor bedroom. They might want an attached garage. We need the lending and the partners. ... Young people are buying. We're seeing this whole resurgence. But for us, it's the holes."

Unpaid property taxes are a worrisome gap

Between 2009 and 2016, the number of residential parcels with tax delinquencies in the five suburbs went up by 60 percent, Ford found. The collective tab rose 341 percent, from $7.4 million to $32.8 million.

Some of that growth is due to long-delinquent properties piling up more bills, penalties and fees. But the increase in delinquent parcels shows that many more homeowners have fallen behind.

The mayors attributed the jump to the recession, unemployment and underemployment and demographic shifts. Staffing cutbacks at the county also hurt, reducing the number of people available to reach out to homeowners, discuss payment options and process tax foreclosures, the mayors said.

The dollar figures -- that 341 percent jump -- make the delinquency issue seem worse than it is, said Kenneth Surratt, the county's deputy director of housing. The county's collection rate tops 90 percent. Over the past two years, the treasurer's office has hired more people and amped up efforts to inform residents about tax-payment options and speed up foreclosures.

"Was there a reduction in staff? Yes," Surratt said of the period between 2010 and 2015. "Did that team call every single person that was out there? Probably not. And if people don't have the money, they're not paying. It doesn't matter how much outreach you do."

Jesse Krislov enters information about a house in Euclid into a tablet computer in July. A 14-member team assembled by the Western Reserve Land Conservancy answered 28 questions about each property. The survey included a series of queries, about everything from for-sale signs to stuffed mailboxes, designed to identify vacant homes.

Suburban officials can -- and do -- write letters to residents who are delinquent, said Euclid Mayor Kirsten Holzheimer Gail. But that outreach only goes so far.

In Maple Heights, where the average residential delinquency is $9,058, some owners are frustrated and apathetic after watching home values plummet and their financial security evaporate, Blackwell said.

On occasion, elderly homeowners forget about their tax bills once they've paid off a mortgage. Other residents can't get loans to fix up their properties, with values so low. They let the taxes slip, betting they'll catch up before the county catches on.

"The county has, in many cases, partnered up very well with us to address this crisis," Garfield Heights Mayor Vic Collova said. "This is one of the problems that we're all having, and we could certainly use a little more assistance."

Lending and appraisals still vex suburbs

The conservancy's report, titled "Communities at the Crossroads," also raises questions about lending in the suburbs.

Based on 2015 data, Ford found that only 23 percent of purchases in Maple Heights involved a new mortgage. In Warrensville Heights, Garfield Heights and Euclid, the share of sales with a purchase loan was between 28 and 35 percent. In South Euclid, buyers obtained mortgages for 52 percent of purchases.

"No one is really lending to the pre-2007 level in these areas," said Warrensville Heights Mayor Brad Sellers. "No one is really willing."

It's unclear whether that lack of lending is due more to reluctant banks, meager demand from buyers, or an influx of investors paying cash.

In neighborhoods where median house prices are less than $65,000, buyers need small loans of under $50,000. Some lenders won't make such modest mortgages, on the grounds that they're as costly and time-consuming as larger loans but less profitable -- or not profitable at all.

Federal data show that the ratio of approved loans to applications is lower in the five inner-ring suburbs than for the county as a whole, but the difference isn't dramatic in every community.

Requests for home-purchase loans haven't really bounced back from their crisis lows across low- to middle-income areas of the county, said Lisa Nelson, a community development adviser at the Federal Reserve Bank of Cleveland.

People are staying put in their houses longer. Some onetime owners have become renters. And much of the growth in loan applications is related to refinancing, she said, most of it in higher-income areas.

Surveyor Avryonna Robinson enters information about the condition of a house in Euclid into a database system on a tablet computer in July. The survey team cataloged more than 56,000 parcels across five suburbs last year to give the communities a better understanding of vacancies, upkeep issues and neighborhood health. The vast majority of the homes appeared to be in good or excellent shape.

The five mayors are talking about strategies to get lenders' attention, though they won't discuss what they're considering.

"We're watching which banking institutions are lending in our communities," Welo said. "We appreciate those banks. We're looking at that."

They're also watching the county's reappraisal process and what the new valuations will mean for their tax base.

The county conducts more detailed, drive-by appraisals every six years. Those evaluations started late last year and will run through the summer. New taxable values for properties will be available in late 2018, affecting payments starting in 2020.

Though a homeowner might be pleased with a low property-tax bill, the suburbs see low valuations as a threat to their financial prospects and another barrier to elevating home prices.

"We need to share this data," Sally Martin, South Euclid's housing manager, said of the survey findings. "We need to make sure this reappraisal goes well, because it's hurting our market."

Communities consider elements of success

Going forward, each suburb will be able to update its database of property conditions to reflect changes, such as demolitions or improvements to a house.

The data are linked to a much more detailed, interactive portal created by Dynamo Metrics, a Detroit-based tech firm that mines data to measure the economic impact of demolition and rehabilitation. That Internet tool will let officials quickly map areas of growth, decline, potential and concern.

A version of the Dynamo Metrics maps for each suburb, layered with data about rental properties, homeownership, incomes and other details from the massive NEO CANDO property database housed at Case Western Reserve University, will be publicly accessible. The data runs from early 2009 through July of last year.

Euclid: Interactive property map

Garfield Heights: Interactive property map

Maple Heights: Interactive property map

South Euclid: Interactive property map

Warrensville Heights: Interactive property map

In Warrensville Heights, Sellers expects to use the data to reinforce his efforts to attract new construction. In recent years, he's pursued homebuilding as an avenue to push up median sale prices -- and appraisals.

Development also addresses a major challenge for inner-ring suburbs, where many houses were built in the 1950s and '60s and are aging at the same pace. "New housing and values bring me new families, bring me sustainability, keep me viable," Sellers said. "We'll pool our resources there."

He's anxiously awaiting the giant Amazon fulfillment center being built in neighboring North Randall, on the former Randall Park Mall site. That building, an e-commerce distribution hub set to open this year, will employ more than 2,000 full-time workers. Some of them, Sellers believes, will turn to Warrensville Heights as a place to live.

In Euclid, where Amazon is planning a second fulfillment center on a former mall site and companies including Lincoln Electric have made major investments recently, Gail hopes the survey results will make residents, home buyers and businesses feel more secure investing in the city.

She highlighted Euclid's plans to play up its waterfront, with projects including a public trail traversing a stretch of shoreline.

Along with approaches to increasing homeownership and preventing blight, the land conservancy recommended that inner-ring suburbs better showcase their existing high points, from recreation and green space to public transportation, and build around them with better trails, streets, sidewalks, bike lanes and parks.

"We all have master plans. We all have small budgets," Welo said. "We all have to go to our councils to prove that where we want to put our money is the best choice. ... For me, personally, everything is data-driven."

With investment prospects finally stirring at long-dormant retail sites flanking I-480 and Transportation Boulevard in Garfield Heights and a related road revamp getting underway, Collova feels more optimistic than in years. Armed with data showing that the housing stock is largely in good shape, he wants to meet with real estate agents to attempt to change their views of the community.

As for Maple Heights, the most troubled suburb in the report based on many measures?

Blackwell hopes to use data for a public relations campaign to win hearts and minds -- and raise the odds of a financial recovery.

"Income tax and property tax are the two solutions," she said. "The fiscal situation was directly related to the foreclosure crisis for the city of Maple Heights. ... Opening the pool again, continuing to renovate parks, road repairs, shoveling and snowplows, being able to add fire engines, police cars. We need property values to come up."