Ohio Bank Invests in More Affordable Housing
July 14, 2017
Over the last seven years, Huntington Bank of Columbus has been involved in a financial effort to expand the range of affordable housing options in the Buckeye State. The latest investment was announced by Huntington Bank in March 2017: $150 million to be invested in collaboration with the Ohio Capital Corporation for Housing. The goal is to help fund affordable residential construction projects for working class families.
This investment is expected to benefit more than 5,000 Ohio residents who are in danger of being priced out of the housing market. Many of these residents are members of middle class families who do not qualify for Section 8 housing and whose earnings are not sufficient to make mortgage or rent payments in many Ohio communities.
Although the issue of affordable housing in Ohio is not as troublesome as in other parts of the United States, Huntington Bank executives are concerned that development of affordable homes has grown stagnant in the state due to federal taxation amendments. The investments made by the bank towards affordable housing since 2010 amount to more than $500 million in federal tax credits granted by the state agency in charge of housing.
Current Housing Market Conditions in Ohio
Although real estate activity in Ohio is not as busy as in Arizona, California and Florida, some local markets are ripe for speculation. Cleveland and Cincinnati are two examples in this regard: home developers are under pressure to complete new residential projects due to high demand from buyers. These two cities can be described as seller's markets in 2017, which means that quite a few prospective buyers are being priced out.
To get an idea of the challenges faced by Ohio renters, a 40-unit multifamily construction project in Columbus and scheduled to be completed in 2018 is expected to offer one-bedroom apartments at $628 per month. For a worker earning minimum wage, this affordable housing solution would consume more than half of her gross monthly income.
Why Affordable Housing Matters
Huntington Bank and other enterprises investing in tax credits realize that affordable housing is an essential component in terms of fostering quality of life, which in turn ensures that development and prosperity can be properly stimulated. Without quality of life, the financial activity of Huntington Bank's customer base would suffer considerably.
The investments made by the bank this year can result in more than 3,500 new affordable housing units, mostly rental apartments and smaller single-family homes. The Through the Ohio Housing Finance Agency, the construction projects will obtain subsidies in exchange for guaranteeing that lease contracts will be offered at reasonable prices for working class tenants.
Although most of the funds provided by Huntington Bank will be destined towards new residential projects, the Ohio Capital Corporation for Housing may also choose to invest in the conversion of existing properties to affordable housing. Some units can be reserved for homeless veterans and other individuals who need emergency shelters.
At a time when the Trump administration is considering minimizing the scope of the Consumer Financial Protection Bureau, the considerate investments made by Huntington Bank are certainly welcome. Americans can no longer rely on the government to solve the problems created by capitalistic endeavors such as real estate speculation; for this reason, it is up to the private sector to come up with sensible solutions.