Keaton PetersCleveland is partnering with the private sector to stem the tide of the rising cost of living. The Cleveland Housing Investment Fund (CHIF) recently announced $18 million from the city with an initial $20 million private investment from KeyBank to finance affordable housing developments that could create up to 3,000 new units across the city. The initial investment is intended to kickstart a $100 million fund, and city leaders are working to attract more partners to help address one of the nation’s fastest-rising rental markets.
The fund will be managed by LISC Fund Management, an affiliate of the Local Initiatives Support Corporation. LISC has managed similar affordable housing funds in Dallas, Charlotte and Detroit. The initiative intends to leverage public dollars with private capital to provide flexible term debt, primarily for mixed-income rental housing preservation and new construction, with a specific focus on middle market and opportunity neighborhoods.
Cleveland’s housing market has reached a tipping point for many residents. According to Redfin data, the city experienced the largest year-over-year rent increase among the nation’s 50 most populated metropolitan areas, with average rents jumping 10.6% in 2024. This surge has created an urgent need for housing solutions that serve low-income, working-class and middle-class residents alike.
CHIF plans to provide loans averaging between $1 million and $5 million per project, primarily targeting housing affordable for residents earning less than 80% of the area median income — $54,450 or less annually as of December 2024. The fund expects to support a wide range of projects, from neighborhood-scale rehabilitation to new construction, with a minimum goal of creating 100 for-sale affordable homes among the 2,500-3,000 total units.
“By creating the Cleveland Housing Investment Fund, we are not just addressing a pressing need; we are investing in the future of our neighborhoods,” said Cleveland Mayor Justin Bibb in the announcement. “Together, we will increase access to affordable housing for Clevelanders, regenerating vibrancy and quality of life throughout the city.”
The fund will aim to support emerging developers and community-based enterprises that typically struggle to access capital. These developers will receive guidance and technical assistance to help them successfully compete for funding—a model designed to build local capacity while addressing immediate housing needs.
With $20 million in private dollars from KeyBank, the fund structure aims to deliver significantly more impact per dollar than traditional financing approaches. City officials project that for every $6 invested through CHIF, there will be a $100 impact—a substantial improvement over typical financing arrangements where $12.50 must be invested to achieve the same $100 impact, according to the city’s announcement.
To ensure accountability, LISC representatives will meet monthly with city administration and council representatives to track community benefits and outreach commitments. This oversight structure aims to maintain transparency while ensuring the fund remains focused on addressing the needs of Cleveland residents.
The city and LISC Cleveland are actively seeking additional mission-aligned partners to reach the $100 million fundraising goal. An information session for developers interested in learning about new funding options through CHIF is scheduled for April 10, 2025.
Image by Russell Holden from Pixabay
