Could Investors Help Clean Up Lead Paint in Cleveland? Cuyahoga County Wants to Know
Cleaning up lead paint from contaminated homes takes a lot of money. By one estimate from the Cleveland Foundation, it could cost $50 million to make some of the city’s most distressed neighborhoods safe from the toxin.
So who’s going to pay for that? Cuyahoga County and philanthropic leaders think private investors might be swayed to put up the cash. This financial model is called “pay for success,” and it’s becoming more popular with local governments.
Cuyahoga County and a lead contamination working group received $100,000 from the Cleveland Foundation to study whether such a plan could work in Northeast Ohio.
Under this model, investors would provide capital for lead remediation work. They would be repaid over time by government or another institution.
“You raise the capital up front to do the work quickly,” the Cleveland Foundation’s Lillian Kuri said in an interview. “And when there are cost savings, you set up a financial model by which you are paid back from those savings, which occur over time.”
The savings could include reduced treatment and testing costs to Medicaid, Kuri said, as well as lower educational or criminal justice expenses.
Kuri said that the city, the county, local hospitals, Case Western Reserve University and Neighborhood Connections have been talking for more than a year about how to clear lead hazards.
The Centers for Disease Control and Deloitte released a report in April laying out a blueprint for building a pay for success model in Northeast Ohio.
Now, the study funded by the Cleveland Foundation will examine who might pay back investors, and how. At the end of six months, the group will decide whether to put the idea into practice.
Most housing units in Cuyahoga County were built before 1978, when a ban on lead-based paint went into effect. Federal grants for lead remediation chip away at just a part of the problem, Cuyahoga County Health Commissioner Terry Allan said.
“We may be thinking more on the order of 100,000 to 200,000 units in our community that do have lead hazards in various stages of repair,” he said. “And so we need to think bigger.”