Policy Considerations for Improving Ohio’s Housing Markets: Cleveland Fed
Ohio's housing markets continue to face a number of challenges. Some are similar to those faced by other states, such as continuing elevated foreclosure rates, while others are distinct to the region, such as a prevalence of vacant, low-value housing. In a newly released white paper, the Federal Reserve Bank of Cleveland has identified five areas where policy interventions are worth considering. They include:
A foreclosure fast track for vacant and abandoned properties: It takes an average of one to two years for mortgage loans to go from delinquency through the foreclosure process in Ohio. When a home is vacant and abandoned, efforts to protect the homeowners may unintentionally create costs with no corresponding benefits. These costs include physical damage to properties, crime, and downward pressure on neighboring property prices.
Elimination of minimum-bid requirements: Ohio law currently requires minimum bids of at least two-thirds of a foreclosed property's appraised value at the first auction. Although this may provide some protection against unhealthy speculation, it may also price some well-meaning property rehabbers out of the market. Eliminating minimum-bid requirements could increase the number of potential purchasers.
Addressing harmful speculation: In extremely low-value housing markets, some entities engage in harmful speculation, purchasing distressed property with no intent to improve it or to pay property taxes. Requiring such entities to register with the Secretary of State and to pay back taxes or correct code violations before a property can be transferred could help local governments tackle this problem.
Expanded access to land banks: Nonprofit land banks have proven to be an effective means of acquiring, remediating, and putting into productive use vacant and abandoned properties. Eliminating the population requirement in land bank legislation would give every Ohio county access to this tool, should they need it.
Improved data collection and access: Understanding Ohio's housing markets is especially difficult because of the dearth of standardized, electronically stored data. With reliable data, policymakers, businesses, and community development practitioners can better identify what works and what doesn't, allowing them to allocate resources more efficiently.
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Federal Reserve Bank of Cleveland
The Federal Reserve Bank of Cleveland is one of 12 regional Reserve Banks that along with the Board of Governors in Washington DC comprise the Federal Reserve System. Part of the US central bank, the Cleveland Fed participates in the formulation of our nation’s monetary policy, supervises banking organizations, provides payment and other services to financial institutions and to the US Treasury, and performs many activities that support Federal Reserve operations System-wide. In addition, the Bank supports the well-being of communities across the Fourth Federal Reserve District through a wide array of research, outreach, and educational activities.
The Cleveland Fed, with branches in Cincinnati and Pittsburgh, serves an area that comprises Ohio, western Pennsylvania, eastern Kentucky, and the northern panhandle of West Virginia.
Doug Campbell, email@example.com, 513.455.4479