Relatively low-cost housing combined with cultural amenities such as arts institutions and regional parks in and around Cuyahoga County, Ohio, as well as broader affordability and livability compared with other cities, are helping spark a wave of millennial migration to northeast Ohio. In addition, two aging malls in the region are being recast as distribution centers for Amazon, said speakers at a ULI Cleveland event in February.

Though the future is not rosy in all regards, some panelists see a light at the end of the tunnel for the region. “Cleveland is often seen as a flyover city, and we need to do a better job at telling our story,” said Tracey Nichols, director of financial services for Project Management Consultants.

“We need to get the word out about all the assets we have,” said Nichols, who spent nine years as Cleveland’s director of economic development. “Things can be created here, but they can also be built here, too. There are not many other places like that.”

The event was held at the City Club of Cleveland, a group that since 1912 has hosted forums focused on national political and cultural issues, as well as local city issues. Every sitting U.S. president since Ronald Reagan has addressed the City Club, as have such speakers as Franklin Roosevelt, Robert F. Kennedy, Archbishop Desmond Tutu, Rosa Parks, Eliot Ness, W.E.B. Du Bois, Babe Ruth, and Shirley MacLaine.

Andrew Warren, a director of real estate research at PricewaterhouseCoopers, set the stage for the Real Estate Trends forum with a presentation on where Cleveland stands now economically and where it needs to go. One issue facing the city is excess housing relative to the city’s population.

“The big question is whether the quality of the existing excess housing is a viable alternative to building new housing, and, more than likely, the market will sort that out,” Warren said. “Sometimes it is about buzz, and sometimes you have to create the buzz about what others aren’t seeing.

“I believe, in Cleveland, the focus is no longer what could go bad in the real estate markets,” he said. “There is a lot of optimism, but like the rest of the country, people are still slightly cautious and measured.”

The Emerging Trends in Real Estate® 2018 report on the Americas, published by ULI and PwC, reflects that cautious optimism regarding Cleveland. The city ranks 56th in “overall real estate prospects” among 78 U.S. cities in the survey, behind other Ohio cities Cincinnati (24th) and Columbus (44th). But Cleveland ranks in the top half among cities for homebuilding prospects and is in the middle of the pack among midwestern cities in terms of local outlook.

As home of the Cleveland Clinic and strong university medical research, “Cleveland continues to see growth around the medical and health services industry that is already established in the market,” the Emerging Trends reports says.

That growth has benefited the city’s University Circle neighborhood, home of the Cleveland Clinic, University Hospitals, and Case Western Reserve University. Likewise, the downtown area has experienced a great deal of population growth as a result of office buildings being converted to provide rental housing.

But some caveats were expressed in the fourth edition of a ULI Cleveland study released at the event. “The general view is that most of the markets are currently moving from a growth/recovery stage to growth-stage potential, while retail continues on a declining trend, with regional malls in advanced decline,” the study says.

“Compared with last year’s survey, it is evident that respondents agree that the apartment sector and the residential for-sale sector have been growing. However, respondents expressed concern that there has been too much focus on high-end rental units.”

An issue facing Cleveland is how the population decline affects the office, industrial, and housing markets. Since 1970, the city’s population has declined by about half (to 385,000 from 750,000), while the population of the five-county metropolitan statistical area has dropped to 2.0 million from 2.3 million. In comparison, U.S. population has grown by more than 50 percent over the same period.

The big question is when the new single-family housing market turns in terms of investment potential for lenders in city neighborhoods and inner-ring suburbs. “We haven’t had a lot of housing starts; [they’re] going up in some areas, but still not gangbusters,” said Robert Simons, urban studies professor at Cleveland State University. “But troubled mortgages are going away, and that is a good thing to see.”

A key discussion point at the event was the role state politics plays in urban issues for large cities. In many states across the country, the needs of cities are being ignored in favor of rural and outlying exurban interests, Nichols said.

“There is a national groundswell against any government-sponsored incentives for economic growth in our cities,” she said. “But our market needs incentives, and elected officials need to know this because killing these incentive programs will kill our ability to compete.”

Christopher Semarjian, owner of Industrial Commercial Properties, which has specialized in converting older properties for new uses, agreed with Nichols. Since 1996, his company has purchased and developed about 65 properties offering more than 40 million square feet (3.7 million sq m) of space in Ohio, Michigan, and Pennsylvania. One project is conversion of the Randall Square Mall for reuse by Amazon and other businesses.

“Cleveland is an old manufacturing town in some respects, but the things we are doing now are not old greasy, oily manufacturing stuff,” Semarjian said. “What we need to do is to streamline the government regulations … Sometimes we are missing opportunities to meet the market because of that process.”