Economic Revitalization (How Bob Drake will encourage economic revitalization of economically "stagnant" areas)

By Bob M. Drake

By accepting a lower interest rate on some of its own bank deposits, Hamilton County can motivate lending institutions to make low-interest loans to qualified homeowners. That money, in turn, can be used to improve property and, thus, revitalize economically "stagnant" communit

I propose that a program be implemented in Hamilton County to enable many citizens to obtain low-interest loans for the purpose of home improvement that, in turn, will help to revitalize many of the older neighborhoods throughout Hamilton County. This will be accomplished with the creation of a "linked deposit program."

Under the Ohio Revised Code Section 135.80, Hamilton County has the ability to create such a program, which would authorize the treasurer to place deposits in banks or lending institutions at up to 3% below the market rate. This money is deposited, in dollar-for-dollar amounts, in banks that have loaned money at a similarly discounted rate to eligible borrowers.

The borrowers must meet certain criteria determined by the county commissioners, and the loans are available to property owners whose property values have increased only marginally during the past 15 years. In Cleveland, as an example, the program has targeted middle-income families earning more than $40,000 a year. Some families are using the cash to upgrade homes by adding family rooms, bathrooms, or garages. Most are using the loans to repair driveways, sidewalks, or roofs. Others are replacing outdated electrical wiring, windows, and painting.

There are other ways these loans are used. In Summit County, the program is used to develop and assist small businesses. This investment program unites Summit County's small businesses and lending institutions in an effort to create and retain jobs. Linked Deposit is intended to provide countywide availability of low interest funding for lending purposes. A Linked Loan reduces the interest rate on business loans by 3% for up to two years upon lender approval of a loan request.

Restoring the inner cores of built-up places encourages residents of these neighborhoods to remain rather than move out to newly built suburbs. Similarly, older suburbs can also be revitalized and made more attractive to residents and businesses. These are primary goals of the program.

Note the long-range thinking here. In Cuyahoga County, the reduced interest on county investments will cost taxpayers $1.2 million a year. Looking a few years ahead, however, the increased values of all these homes will add to the tax base. Also think of the 1,400 people - and growing - who are now more committed than ever to a life in Cleveland and its inner suburbs.

Why hasn't this happened in Hamilton County? The current county commissioners are keenly aware of the county's steady loss of population After reaching its highest population in 1970, in the following eighteen years Hamilton County lost
8.3% of its population.

"From 1980 to 1985, a large proportion of the migration losses to Hamilton County was due to people moving entirely out of the metropolitan region to other parts of the U.S. This pattern changed after 1985, and Hamilton County is now losing population principally through a process of metropolitan sprawl." (Research Report of the Hamilton County Regional Planning Commission, "Spreading Out: The March To The Suburbs,"October 1999)

I believe that a linked deposit program for Hamilton County residents would be a constructive response to this population (and tax base) loss to neighboring counties!

The key issue is one of political vision and will. Are the commissioners and treasurer of Hamilton County ready to put revitalization high enough on their priorities so as to subsidize owners of older homes and revitalize aging neighborhoods? In the face of other competing claims on this county's budget and in the maelstrom of competing political forces, it all boils down to leadership.

I propose that a Linked Deposit Program be created in Hamilton County, and I will work to assure that it happens. Under my plan, preference will be given to proposals that demonstrate the potential to strengthen our overall economic competitiveness, retain a