Point of sale: an indispensable tool

Last month, we described how and why Cleveland Heights came to adopt point of sale (POS) inspections and later added an escrow requirement to fund code-violation repairs. 

On Jan. 28, seven area realtors, all but one Cleveland Heights residents, met with CH City Council’s Housing and Building Committee Chair Jim Petras, Vice Chair Gail Larson, and Council Member Craig Cobb. Committee member Anthony Mattox Jr. was absent. The realtors identified themselves as members of Akron Cleveland Association of Realtors (ACAR) but did not mention (let alone assume responsibility for) ACAR's recent mailer attacking POS.

Spokesperson Helen Hertz, longtime CH resident and civic booster, recommended replacing POS interior and exterior inspections of residential properties with more frequent exterior-only inspections. Hertz noted that Lakewood, where sales and housing values have boomed over the past decade, ended POS for owner-occupied homes four years ago.

Both Lakewood (2020 population: 50,942) and Cleveland Heights (45,312) are large inner-ring suburbs with distinctive historic homes. Housing policies that work for Lakewood might very well benefit Cleveland Heights, said Hertz.

Finding the comparison to Lakewood incomplete and misleading, we contacted CH resident and housing professional Mike Bier, who helped us assemble a group of leading housing advocates to meet with the committee on Feb. 11. Bier served as facilitator. Three of the five panelists are long-term Cleveland Heights residents. Together, they made the case that Lakewood is not a useful model for our city, and that POS with escrow is still an essential tool for housing preservation here. This meeting also was attended by Petras and Larson, along with CH Council President Tony Cuda, but not Mattox.

Lakewood never experienced the racial steering and block-busting that threatened east side neighborhoods and suburbs 50 to 60 years ago. While today Lakewood is 82 percent white, Cleveland Heights is the proud home of roughly equal percentages of Black and white residents, with a small number of Latinos, Asians and other ethnicities.

At the Feb. 11 meeting, resident Diana Woodbridge, former director of the Home Repair Resource Center, recalled that in 1995 she began to see African American families "caught in the web of predatory lending." During the 2007–15 national foreclosure crisis, cities were disproportionately affected based on their racial composition. Frank Ford, Fair Housing Center senior policy advisor, confirmed that, from 2006 to 2020, Cleveland Heights suffered 4,989 foreclosures, while Lakewood experienced 3,124, a difference of 1,865 or 37 percent.

Recovery from the housing crisis by the two cities is scarcely comparable, Ford stressed. In 2000, the median home sale price in both was approximately $120,000. By 2024, however, Lakewood's median price had rebounded to $306,000, while Cleveland Heights' lagged at $195,000.

Hertz and colleagues had noted that Lakewood continues interior and exterior inspection of rental properties, and that Cleveland Heights should do the same. Rates of home ownership in both cities declined between 2000 and 2024—by 4.5 percent in Lakewood, but by 18 percent in Cleveland Heights, where investor ownership of single-family homes is much more prevalent.

CH resident Tom Bier, retired from Cleveland State University's Maxine Goodman Levin School of Urban Affairs, pointed out that federal and state policies favor newer municipalities: "The deck is stacked against a community once it starts to get old. . . . [For bedroom suburbs like Cleveland Heights] the only significant tool is maintenance of real estate."

Judith Miles, long-standing Noble area homeowner and an attorney who deals professionally with foreclosed properties, agreed:"Ohio statutes do not offer adequate protection for communities with older housing stock."

Similarly, demographic diversity, while it enriches life and serves the common good, does not benefit home values in the United States' market-driven environment. According to both Woodbridge and Tom Bier, there is a relatively small pool of white homebuyers who both want to live in a multiracial neighborhood and are willing to undertake maintaining an older home.

Bier researched changes in real estate values from 1960 to 2018 across a seven-county region. Correcting for inflation, he found that property in 22 out of 226 communities lost value. Of those, he noted, "Ten were Cuyahoga County's most integrated suburbs," including Cleveland Heights and Shaker Heights. Lakewood's property values, meanwhile, increased about 20 percent in real terms.

Thus, the very qualities of diversity and historic character we prize in our city make it vulnerable to unscrupulous actors in real estate and banking.

"History will repeat itself," observed Sally Martin-O'Toole, Cleveland’s director of housing and building. "Lending is a little bit more responsible than . . . in the aughts, but the [housing] market is still insane." She foresees another big crash areawide.

"Old homes take a lot of work," she concluded. "The role of code enforcement cannot be overstated." 

Mike Bier and the five panelists agreed that a rigorously enforced POS ordinance with escrow to cover repairs gives both the city and homebuyers leverage that is not otherwise available. Bier pointed out that in his case, $25,000 placed in escrow by the seller was what made the purchase of his house possible.