Confused in Cleveland! Is gentrification a thing?

Question

I've been back in Cleveland for about a month after spending 12 years in Chicago. I'm back here for a variety of reasons but a big one is to invest in small multi. What has me confused is that any "gentrification" happening here seems to be sporadic and spread out. I'n Chicago there is a pretty defined "path of progress" along the "L" lines and when a neighborhood starts to turn the investors and developers seems to swarm like locusts. I just don't see that kind of neighborhood shift happening here. For example the Ohio City/GordonSquare area (I'm currently living in the area) to the west of 25th between Detroit and Lorain, the housing stock there still seems to be a hodgepodge of dumps with a smattering of new construction and a few rehabs/flips but I'm not sure I can point to a single block that has completely "arrived." I just read an article about a neighborhood effort to avert gentrification in the Clark-Fulton Neighborhood with MetroHealth development, after spending some time over there in the last couple of days I'm not sure they have much to worry about.

I lived here for the better part of 30 years, down in the Akron area when I was younger and then in Slavic Village, Tremont and Shaker Square during/after college before moving to Chicago and those neighborhoods seem to either have stagnated or declined in the time I was gone. I'm fine if this type of neighborhood shift just doesn't happen here, I still see some good cashflow opportunities in some decent C/B neighborhoods, I'm just wondering if I'm missing something. Are the millennials and Gen-Z populations choosing to live outside of the city. Any insight is appreciated.

Andrew Weiner · Answer

Welcome back to Cleveland. Your observation is very interesting and I'm sure that some academics will write papers about this one day. What I have seen in other metro areas is a demand for much higher end units and in neighborhoods that were significantly run down. I think what is different in Cleveland is that there is not enough demand for the brand new construction and fully rehabbed units. There is still strong demand for partially updated units which keeps the prices high enough that demoing existing housing stock is not profitable. Also the school situation is one of the drivers for some of my millennial peers, as they start to have children they are moving to suburbs with better school districts. I don't know about Chicago or what is happening there but I would assume that there are some magnet schools in Chicago public that offer a better education so people don't have to move out to the suburbs.

Bilal Muhammad · Answer

@Jason...... I know this is an older post. I'm from Cleveland's Eastside & have spent time not living but frequenting the lower Westside & some in the Westpatk area & in between. If you want to see gentrification you'd have to visit Atlanta. Chicago & Cleveland mirror 🪞 each other immensely. In order to tackle this subject a discussion of somewhat taboo subjects have to come to forefront & spoken on.... ⭐......such as Education, Race, Crime, Poor & Corrupt Political Arena...... For instance in on Cleveland's Lower Westside you'll see Gentrification even if hit & miss while on Cleveland s Lower Eastside you don't & won't for awhile & the contributing factor is poverty, to degree race relations & emphatically crime. This must be pointed out because in Atlanta you have the very same issues but it unequivocally haven't stopped Whites from moving into predominantly Black Areas, at all. Based on The Socioeconomic & Educational Demographic of both Gentrified & Gentrifiers, this will lead you to who will inhabit the area once turned around. ⭐⭐⭐......If you don't & won't have this Demographic moving in based on a higher Median Income Household, it may not go over well at all based on Housing Price Point after Renovating a Neighborhood. In Atlanta you have economic thriving Younger to Mid-age Black, White, Asian, Indian & up & coming Hispanic Demographic. In Cleveland you don't have such. You only have a burgeoning White, Arab & some Indian population & many flock to the upper East & Westside Suburbs based on fear of Crime, Race Relations & BETTER SCHOOLS. ⭐....In Atlanta you have a lot of "NON VOUCHER) Private Schools to offset poorly managed, somewhat dangerous & underfunded PUBLIC SCHOOLS.

Nicholas Salman · Answer

In my personal opinion yes. It’s actually pretty crazy to watch as I have grown up in Cleveland. You are starting to see nice buildings go up or get renovated in areas you weren’t allowed to go to as a kid. Also Cleveland clinic announced the plan for putting up multiple buildings. It’s crazy

Geoffrey Rucinski · Answer

Hello @Jason Dalka, lived in Cleveland all my life and the Ohio City area for the last 5+ years. I agree with @Andrew Weiner in that the schools are a big factor in the longevity of people staying. Ohio City, Gordon Square and Tremont seem to attract millennials (I'm one of them) that are willing to buy new construction (I did) or fully rehabbed homes, but the timeline between being able to afford that and starting a family is typically only a few years..at which time off to the suburbs (Lakewood, Rocky River, Bay Village, Avon/Avon Lake, etc.). My assumption (as a lifetime interested party in real estate but just starting to invest) is that since they move out only a few years after buying, a new, well-paid millennial, moves in and the demand for additional new construction/full rehab remains a slow climb.

James Wise · Answer

Gentrification is happening in areas where the billions are being pumped in. Not in others though. Look at Ohio City, Tremont, Gordon Square as the 3 biggest examples.

Jason Dalka · Answer

@Brandon Sturgill That's a pretty fancy map, I'm not aware of one but I'm going to try to find one for this area. As far as what I mean by gentrification, think the Short North area in Columbus. Trendy restaurants and cafes, interesting boutique retail with some national tenants mixed in, housing stock is mostly new or fully renovated. Basically, the area would be pretty solidly populated with recent college grads, yuppies and dinks. In Chicago, we have numerous areas that fit this description. These aren't areas that I think of as being great appreciation plays but they usually make sense for buy and hold, while the next neighborhood in the path of progress tends to have greater upside but you're pretty confident the neighborhood will reach the same level of gentrification in the foreseeable future. The areas here in Cleveland that seems to be on this path look like they could backslide at any moment and they aren't really anchored by an already established neighborhood.

Bilal Muhammad · Answer

@James.......& that's good. I believe the money depending on the source should be spread equitably. As an investor I'd want my money to go where I see growth & longevity.Also the realm where I invest I'd like for it to be conducive to my investment dollars. Turning around an area isn't impossible but those in that area have to be onboard & if not what I build they'll destroy. And if such is the case as history has shown til today is that ....... ⭐...... Investors simply won't invest in that area & it'll look the same in 30 more years if bad...... ⭐...... Potential will be seen in that area & property will be bought & the area refurbished & the people will be priced out who were there. There's no other way. Growth will or won't happen.

Bilal Muhammad · Answer

Brandon Sturgill · Answer

@Jason Dalka Interesting that you mention Short North...I just saw an anniversary article about how the Short North Posse was the last gang with a stronghold in the area...the cops smoked them out and it was a 2-year effort to arrest them all after they relocated to Italian Village/Weinland Park.I hear you on the Cleveland front...I am pulling for the city to make a recovery (same with Dayton), but the driver for sustainable transition is yet to be discovered. It's hard to not speculate without knowing what's driving the transition.It may be worse in locations here like Southern Orchards...the driver for property prices tripling has been a hospital giving grants to poor people to fix up their properties...and building homes for low income folks to live in...nothing wrong with that, but at the end of the day its a neighborhood full of poor people with nice looking houses they can't afford to maintain.Does your MLS have access to RPR?...fantastic data source...on the commercial side you can drill down pretty accurately on specific neighborhoods.Best of luck

Brandon Sturgill · Answer

@Jason Dalka Define gentrification......wondering if your city has a comparable map: https://columbus.maps.arcgis.c...Ohio City is a pretty hip place...good walkability from Saucy to 2 other breweries and some cool spots in between.