Columbus eyes revolving loan fund to boost housing

• Meanwhile, Columbus has a new $500 million pool of bond funds specifically to invest into housing projects.

State of play: It's rare for a developer to get a bank loan covering an entire building project.

• Typically, they secure around 60% from the bank before gathering additional funding from investors demanding a return — adding to the project's overall expense.
• Developers often come to the city to ask for subsidies, grants or other money to help make the project profitable.

How it works: Instead of handing out subsidies or grants in one-directional transactions, a revolving loan fund would be replenished as developers pay it back.

• It would be used for mixed-income housing.

In February, city council approved a $30,000 contract with the Center for Public Enterprise to assess how Columbus might establish such a fund.

What they're saying: "Typically, the way we do affordable housing investment is we get a bucket of subsidy, give it to a building, the building is then affordable and it goes off into the world," says CPE executive director Paul Williams.

• "The way we've seen some cities and states start to innovate … is can you revolve that capital so that you get your bucket of subsidy, put it into a project, get it back and put it into another project?"

Council President Shannon Hardin says this type of program could ensure the city is "participating" in local growth rather than just responding when developers approach with an open hand.

• "This is about cutting folks in on the deal, making sure that folks who are here are getting some of the benefits out of this growth."

What's next: Williams and CPE will deliver recommendations in September to council and Mayor Andrew Ginther.

• A fund would likely pull from $500 million in bonds earmarked for housing, which Columbus is expected to begin dipping into by mid-2027.

The bottom line: Hardin tells Axios it's time for the city to start taking bigger swings to tackle affordable housing shortages.

• "Let's try some shit."

A growing trend

Revolving loan funds are becoming more commonplace through help from think tanks like CPE.

Between the lines: But why has it taken so long to embrace such a straightforward concept?

• For years, so much money was available from the federal Low-Income Housing Tax Credit program that it simply wasn't necessary to bring other ideas to the table.

Yes, but: Federal and state programs are stretched thin and overwhelmed with requests.

• "Now that their affordability problem has gotten worse across the country and those tax credits are all oversubscribed … cities are saying, 'My bucket is empty. I need some additional strategies,'" Williams says.

Zoom out: Cities, counties and states nationwide are beginning to establish their own programs.

• Columbus is looking to projects in Montgomery County, Maryland and Atlanta for inspiration.

Fun fact: Now based in New York City, Williams is a Columbus export who grew up in Clintonville.

• "It's exciting to have him home with this level of talent to help us hopefully be as innovative here in Columbus as he has helped cities across the country be," Hardin says.