CINCINNATI — Cincinnati City Council is considering a new program looking to bring renters into the world of owning property.
Money tends to be the biggest barrier to entering the market, whether it's owning a home or commercial property. A Community Investment Trust would help bridge the gap between renters and owners, especially for those who are considered low to middle-income families.
Here’s how it works: a nonprofit takes out a loan to purchase a property. Then, they set up an investment structure where low-income neighbors can buy shares of the building every month for a low price, between $10 and $100.
"It shows that their credit score is improved, they start using financial planning tools and they get more involved in their neighborhood because they own something there," said Vice Mayor Jan-Michele Kearney. "It's not just like they're renting and thinking about moving, they actually own something, they can live in the building, or they can live in the neighborhood."
Over time, as the neighborhood develops, the tenants in a commercial building might pay more for rent, creating increased short-term profit through yearly dividends to investors. Over the long term, the property value increases as well. The goal is to make real estate investing attainable and local.
"We have lost out on generational wealth building, because over the years, homes have increased in value, and families have had something to pass down, to pass down to their children and grandchildren," Kearney said. "A lot of Black and Brown families have been left out of that opportunity."
Cincinnati's Equitable Growth and Housing Committee on Jan. 17 will potentially move forward with a measure that looks to study this. City leaders looked at Portland, Oregon as an example of how this could work.
"They're motivated to invest in real estate, we put up some pictures in some areas of properties and said what if you could own this collectively, but we knew what their limitations were," said John Haines, executive director of Community Investment Trust.
Investors can cash out at any time. It is a zero-risk program. The whole idea is to help individuals build generational wealth.
Haines gave an example of a return on investment for one property. As of 2024, the share price went up from $10 to $19.65, with an average yearly dividend yield of 7.9%.
"30 commercial retail tenants are doing well, they're doing better, because the neighborhood owns the building, they feel like it's more activated with the space," Haines said. "It's kind of created a community support of the building, and interaction between investors that's made the neighborhood stronger, more active, people vote now regularly when they didn't before."
There are other potential barriers for this program to get off the ground in Cincinnati. Haines said there has to be a nonprofit or a group that takes the lead on a long-term project like this. Neighbors would also have to work with and persuade the banks to help with credit, and identify commercial properties where this could work.
"I think if you have the political will, and the right lead organization, or a coalition of groups working to make it happen, then the funders and the banks are more likely to follow," said Haines. "I think getting the entire community to get its arms around a project helps it succeed."
READ MORE: Cincinnati to study feasibility of 'Community Investment Trust' program for low-income renters
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