The small village of Newburgh Heights covers less than one square mile. It lies adjacent to the Slavic Village neighborhood – the so-called epicenter of the nation’s foreclosure crisis. Harvard Avenue, the town’s main drag, is mostly industrial.
Interstate 77 runs right through town, and the highway gives Newburgh Heights its main draw: proximity to other places. A 10-minute drive gets you to downtown Cleveland, or the trendy Tremont neighborhood.
The city, home to just over 2,000 residents, has seen its population and home values decline through the years, so Mayor Trevor Elkins wanted to bring attention—and new residents—to Newburgh Heights.
“I’ve tried to, in my time here as mayor, use my local, home-rule power to address more global issues that are national issues in a way that impacts us locally,” Elkins said.
Elkins created the Student Loan Assistance Program, which he says is a win all around. Graduates receive help paying back their loans, and he creates buzz about his city.
The program will provide student loan assistance for people buying homes in Newburgh Heights. To be eligible, you have to buy the home within five years of graduating and live there 10-15 years. If you do, the city will pay 50 percent of your college loans, up to $50,000.
You have to live there 15 years to get the full amount. So, if you have a $20,000 loan after graduating, you get half of that, or $10,000. If you live there 10 years, you get 80 percent of that amount. In this example, that would be $8,000. If you leave before 10 years, you don’t get anything.
“Our view, and I think the view of somebody buying a home is, ‘You know what, I didn’t lose anything either. I got a nice home. I had a potential for a return on the end, circumstances have changed. And that’s all fine, I had a nice home while I lived here,’” Elkins said.
After 10-15 years, many people may have already paid off their loans, but the city will still rebate the full amount.
Elkins says the city will pay for the program through property taxes, which he hopes go up. For city officials, the ideal situation is increased demand for homes in Newburgh Heights will drive up property values, which in turn brings in more money for the city.
According to the U.S. Census, there are just over 1,000 housing units in the city, and about 150 of those are vacant. The median home value of owner-occupied homes is $65,400.
On the housing website Zillow, there are five houses for sale in Newburgh Heights listed over $50,000, which is one of the requirements to be eligible for the program. That number has gone up since the new year. The U.S. Census says there aren’t any owner-occupied homes valued at more than $200,000, although that could soon change. There are three more homes currently being built on vacant lots, and they’re listed at $250,000. Mayor Elkins says the city hopes to build about 20-25 houses in the next few years.
Realtors with homes listed in Newburgh Heights say they’ve seen more interest than usual in their homes, but it’s hard to say whether that’s due to the program.
“My response for this home has been phenomenal. I’ve had buyers calling me, I’ve had people emailing me, even from other states inquiring about the home,” said Denise Franklin, a Century 21 Homestar realtor representing a client selling a home in Newburgh Heights.
A realtor selling the three new construction homes says he’s also received calls from out-of-state buyers. One person said he was from Memphis, Tennessee, and was considering either a home in Newburgh Heights or a home in a different city that offered a similar incentive.
Daniel Shoag, an economics professor at Case Western Reserve University, studies cities that offer incentive programs. He says it will be interesting to see the impact this program might have, both positive and negative. If it works, and property values go up, longtime residents might be upset to see their taxes go up with it.
“Other issues may involve equity concerns,” Shoag said. “You’re offering two households in the same area different benefits based on educational choices that may reflect all kinds of things that don’t seem fair to some of the residents.”
He says normally, he studies cities that give incentives to businesses, which makes this program more unusual.
“We looked at, so often, these economic incentives are provided to businesses. They’re not typically provided directly to the public,” Elkins said. “And what I watched happen time and time again—it was very, very frustrating--is you would see how governments would give money to private businesses for job creation or to move to their community. And there were all these promises of, it’s going to generate this much revenue, it’s going to generate this many jobs, and then it just felt like it never delivered. The businesses never delivered, or they only delivered part of what they promised, and then they would move within four or five years to the next highest bidder.”
Erin Figueira is ready to make a commitment to Newburgh Heights. The village wasn’t on her radar at all until she saw news articles about the Student Loan Assistance Program.
“It interests me because unfortunately, I’m 33 and I still have student loans that date back to when I received my undergraduate degree,” Figueira said. I actually graduated with my undergrad in 2007, so I’m working on paying it off, I’d like to buy a home.”
Figueira estimates that at the rate she’s paying off her loan, she could have another 10 years of paying off her student loans.
Denise Franklin, who has worked in real estate since 2007, has seen the impact student loan debt can have on potential homebuyers.
“It’s a very big problem. Because we have people, we have our students going to college, we always say go to college, get your education, and they do and they come out and they want to buy a home, but guess what? That debt is against you, and that pulls a lot of people down. That stops a lot of students from getting homes,” Franklin said.
Figueira isn’t eligible for the program, since she graduated more than 5 years ago. But she remains interested in homes in Newburgh Heights, due to the city’s location and affordability.
“I’m interested in the Newburgh Heights area because it’s just very up-and-coming. Everybody I speak to is like, oh the Slavic Village area, Newburgh Heights, it’s almost like the next Lakewood,” Figueira said. “It’s just really going to take off.”
Potential homebuyers considering Newburgh Heights, even if they’re not eligible for the program, could make the program a success. Despite no official marketing campaign, the village has received national attention, which could be exactly the boost it needs to grow its population and expand its tax base.
“Move to Newburgh,” Elkins said. “It’s going to be the next community that I really believe people are going to see as a place to have a family and… put your roots down and grow up in.”