REAL ESTATE. The history of real estate development in Cleveland is the story of property owners who speculated on the economic future of the city and anticipated the effect of growth upon property values in different locations. They attempted to subdivide, or allot, the land into the best configuration of building lots, to supply these lots with the necessary improvements, and to promote the project to potential buyers; all in competition with one another and with the threat of periodic bank panics looming over them. Whenever possible they endeavored to get a governmental entity to pay the costs of new roads, bridges, canals, railroads, parks, industries, or public buildings and sometimes held public office to ensure the success of their ventures. During the two centuries of Cleveland's history the opportunities for real estate profits changed and as a response there were changes in the kinds of allotments that were brought to the market and an increasing professionalism of the real estate profession. But the ability to anticipate or manipulate events to increase real estate values has been constant throughout the various periods of Cleveland's growth. Real Estate
The first major period of real estate development was the creation of Cleveland and the Western Reserve by the proprietors of the CONNECTICUT LAND CO. at the close of the 18th century. Cleveland and the Connecticut Western Reserve have, from their inception, been parts of a gigantic speculation in land; first by King Charles II, who gave all the lands extending to the Pacific Ocean to the first settlers of Connecticut in exchange for a firmer foothold for his Empire; and later by the Connecticut Land Co. proprietors, who invested $1,200,000 in the expectation that the lands along Lake Erie's southern shore would make them all fortunes. Such fortunes would have to come from the cutting up of the Reserve's 3 million acres into smaller parcels that could be sold at a profit to the land-hungry settlers flooding the Trans-Appalachian frontier now that the British restrictions had been lifted by American independence.
There were many competing areas of settlement, however, in the Northwest Territory, and to attract settlers to the Western Reserve the Connecticut Land Co. proprietors had to offer assurances that the settlers' investments would be protected from legal problems, economic stagnation, or military harm. They wanted prospective eastern settlers viewing a map to feel that the Reserve was a proper Yankee village surrounded by a good system of roads and agricultural lands. Therefore, the original surveys and maps of Cleveland were a marketing tool for the land speculators in Connecticut.
These speculators, however, were not a unified body, nor were they long-term investment partners. Rather they were a group of competing speculators who were forced into a temporary alliance by the size of the purchase and the State of Connecticut's insistence that the Reserve be sold as a single entity. Once the company acquired title to the Reserve, immediate steps were taken to make a fair and proportionate distribution of the 3 million acres to the dozens of investors, leaving them free to begin selling lots to settlers in competition with one another.
The first summer after purchasing the Reserve, the company dispatched its general agent, MOSES CLEAVELAND, and a party of surveyors to the Reserve. Part of his team began surveying the township lines, beginning at the Pennsylvania border and working west. Meanwhile, he took the rest of the party to the mouth of the Cuyahoga and began laying out Cleveland. Beginning with a traditional New England village green--today's PUBLIC SQUARE--they mapped out streets running at right angles in a gridiron pattern and of blocks divided into lots of 2 acres each. The following summer, 1797, another surveying party was sent to the Reserve and added to the emerging pattern of roads and property lines.
The effect of these two summers of work was to create a town that contained 3 categories of lots, by size, and a radial street plan leading into the gridiron environs of today's downtown area. In the area surrounding the village center at Public Square were the "In Lots" or "Two Acre Lots," which were the realm of residential and commercial life in traditional New England villages. Bordering them were the "Out Lots" or "Ten Acre Lots" which were primarily for more rural, agrarian uses and which increased in size with distance from Public Square. Finally, the "Hundred Acre Lots" were left available for further splitting into farms or satellite villages, similar to the larger townships. The reason for this elaborate pattern of streets and lots was because Cleveland, unlike most of the townships, was slated for immediate sale to settlers to help defray the costs of the surveys. However, sales were slow as the malarial conditions near the river, the high prices set on Cleveland lots, and the availability of significantly cheaper lands in the eastern part of the Reserve combined to delay settlement. During the early decades of the 19th century, growth proceeded at a faster pace in some of the surrounding villages, such as NEWBURGH, and in Rockport two groups of proprietors failed in their attempts to establish speculative town sites on opposite banks of the Rocky River. For many years the Reserve suffered from too much available land and a weak local economy. Cash was scarce and the proprietors found that their costs of holding land were rising faster than land values.
The opening of the OHIO AND ERIE CANAL in 1827, which established a vigorous commercial economy and accelerated land values locally, marked the beginning of the second major period in Cleveland's real estate history, which extended until the Civil War. By 1827 the original city lots, east of the Cuyahoga, had passed into private hands and were being developed on a piecemeal basis by individual owners. One notable development was an attempt to establish a luxurious residential community along Lake St. east of Erie St. (East Ninth St.). In 1835 Lee Canfield and Sheldon Pease donated a small park, Clinton Park, to be the centerpiece of their new Clinton Square real estate development. This is the first attempt in Cleveland to support land values in a residential subdivision project by donating a park--at least since the Connecticut Land Co. did something similar with Public Square. The project failed in the Panic of 1837 and the arrival of the Cleveland and Erie Railroad destroyed the bucolic ambiance of the area.
This modest attempt to create a community and anchor values to public improvements paled beside what was occurring on the west side of the river. Here groups of investors were bringing nearly 2,000 new building lots onto the market, supported by a massive public works program, in an effort to attract industry and residents. The centerpiece of the movement was the incorporation of the village of OHIO CITY in 1836 and the attempt to extend the canal to a new terminus nearby. The old bed of the Cuyahoga River, which forms WHISKEY ISLAND, would be again connected to the river, and with the canal traffic would make Ohio City a harbor town, complete with a new hotel.
The first plans for building lots appeared in 1831, following the purchase of the Carter farm by investors from Buffalo and Brooklyn, and the unsurveyed lots sold for good prices. Immediately to the south, in 1836, the real estate firm of Lord and Barber developed a new residential subdivision of nearly 1,000 building lots centering on their beautiful Franklin Circle park. Their Wooster Turnpike--in 1824 the first toll road in Cuyahoga County--fed traffic up to their development along today's Rte. 42, and in 1840 they donated land for a farmers' market. They also created the Cuyahoga Steam Furnace Co. to provide jobs. JOSIAH BARBER and RICHARD LORD were both mayors of Ohio City and were in a position to shape development on this side of the river.
The village of Cleveland did not ignore the challenge from the Ohio City promoters and responded by trying to hinder their economic vitality. In the early 1830s a group of Cleveland boosters--which included a recent village president, RICHARD HILLIARD, and Cleveland's soon-to-be first city mayor, JOHN W. WILLEY, as well as businessmen John S. Clark and Edmund Clark--created 2 new subdivisions. In 1835 they created Cleveland Centre (placed in the first big bend of the river, southwest of Public Square), noteworthy for its radial design evoking L'Enfant's plan for Washington, DC. Immediately to the south, across the river, the group created WILLEYVILLE in 1836, and connected it with the Wooster Turnpike to the south and Cleveland Centre to the north with a bridge at Columbus St. The Willey administration also closed the floating bridge across the river further north. The net result was to drain off north-bound traffic before it reached Ohio City and direct it through Willeyville, over the Columbus St. bridge, through Cleveland Centre and on to their market at the foot of Superior St. before reaching Cleveland. This resulted in the "Bridge War" between the two cities and a rivalry that lasted until Ohio City was annexed by Cleveland in 1854.
AHAZ MERCHANT, the Cuyahoga County Surveyor, surveyed most of these new subdivisions and drew a "Map of Cleveland and Its Environs" (p. 844) that shows the land subdivisions in place by 1836, just before the Panic ruined things. It includes, appropriately, a drawing of the COLUMBUS ST. BRIDGE as well as the various new banks, churches and industries, but omits any reference to Ohio City. This map was an important piece of civic boosterism in its time, showing the outside world that Cleveland was growing rapidly into an important port city.
In 1851 a group of prominent Clevelanders founded CLEVELAND UNIV., and one of the founders was William Slade, Jr., who platted the surrounding area into a subdivision with streets bearing such intellectual-sounding names as Literary St., Univ. St., College St., and one that would become Professor St. Next to Slade's allotment, John G. Jennings created the Univ. Hts. allotment, and donated its Pelton Park to the city. This area is now known as TREMONT. Other major subdivisions on the south and west sides during this period were two huge plattings by SILAS S. STONE (1849 and 1853), and allotments by GEORGE BENEDICT and Elias Root (1851), by Taylor and Hoyt (1852), and by H. Stone (1853), altogether totaling several thousand lots.
Following the Civil War, the eastward growth of land subdividing activity moved from the radiating plan of the Ten Acre Lots and moved into the Hundred Acre Lots where gridiron allotment patterns re-emerged. By the 1860s, street horsecars permitted a greater separation between workplace and residence, and lines reached downtown from East Cleveland. The pressures of industrial pollution and large-scale immigration caused many to seek homes in the periphery, where the environment was deemed physically and spiritually healthy. Capitalizing on the demand for natural surroundings and the availability of rudimentary public transportation, subdividers were creating home sites as far out as DOAN'S CORNERS (now E. 105th) by the 1870s. Few middle class buyers could afford the time or fares to commute via horsecar from this distance. The wealthy could, however, and large tracts of land near the lake were obtained for summer retreats by men like WILLIAM J. GORDON, LIBERTY E. HOLDEN, JEPTHA H. WADE and JOHN D. ROCKEFELLER also invested in suburban lands, anticipating growth there. Coupled with the bucolic splendor of the new LAKE VIEW CEMETERY in 1869, the Doan's Corners area became a series of private estates, resorts, and speculative holdings, all having a park-like ambiance.
By the 1880s the Doan's Corners area was developing into an alternative community for the Millionaires Row culture that was being pushed eastward out Euclid Ave. by encroaching commercial land uses. The location of Western Reserve College, the Case School of Applied Science, the CLEVELAND MUSEUM OF ART and other cultural institutions began to transform this area into a new elite center. After Wade donated part of his estate for WADE PARK in 1882, and the Gordon estate was deeded as a public park in 1893, real estate developers began creating large allotments in this, Cleveland's "East End." Wade himself created the Wade Park Allotment as the logical extension of EUCLID AVE. living, while other promoters began creating luxurious residential communities up on the heights. A group headed by Atlanta railroad attorney Patrick Calhoun platted the Euclid Hts. Allotment in 1892 to take advantage of the new speed and hill-climbing power of the electric streetcars. Calhoun donated some of the land that became UNIV. CIRCLE in 1896 to serve as the gateway to both his elite development and the new park system.
Investment syndicates from Virginia and Buffalo had begun developing SHAKER HTS., farther south on the heights, and donated the SHAKER LAKES for public parks that same year. By such donations, developers were able to turn rugged terrain that could not be developed into scenic parks that the public would maintain, while the city received park lands that it could not afford to purchase. The developers of the Brooklyn Park and Clifton Park Allotments at the mouth of the Rocky River also tied their developments to the desirable ambiance of public parks. The availability of dependable public transportation and public utilities also dictated the success of subdivision projects.
Having increased the value of their properties by tying them to park and infrastructure improvements, developers wanted to be able to assure prospective buyers that their investments, in turn, would retain value. One device developers turned to for this were restrictions placed on the property deeds, prohibiting certain land uses, regulating external appearance, setting minimum standards for new homes, and barring members of ethnic minorities. The idea was to create the kind of stability, values, and homogeneity in the new neighborhood that would inspire the confidence of middle- and upper-class buyers. With millions of dollars at stake and thousands of lots to sell, developers tried many marketing devices to promote their version of ideal suburban living. The management of such large projects was getting increasingly difficult and the size of Cleveland's real estate market was increasing after the Civil War. As a result, the real estate industry developed specialized professions to help develop and market property.
In the 1850s, for example, Jay A. Odell formed the first title abstracting business to help lawyers ensure that their clients' purchases were free of title problems. Justus L. Cozad created a competing firm in 1870, and in 1890 a third firm, the Ohio Abstracting Co., was established. In 1898, with the passage of new state enabling legislation, all 3 firms were purchased and merged into the Guarantee Title and Trust Co., to issue title insurance, underwrite mortgages and manage property. In 1902 James E. Church incorporated the Land Title and Trust Co. and created the present geographically based "Unit System" of organizing title records. He purchased the Guarantee Title during the Depression and in 1972 Land Title was acquired by today's Chicago Title.
Real estate sales agencies underwent a big change in the 1890s as well. Until then the sale of real estate had been performed by a variety of people. In the first days of the Connecticut Land Co. it had been done by the original proprietors and their agents in the Western Reserve, particularly Turhand Kirtland, General Simon Perkins and LEONARD CASE. All through the 19th century, owners of property or their attorneys sold property, or they relied upon real estate agents. As the size of Cleveland increased and real estate transactions became more complex, the need for skilled, ethical agents increased. The number of men advertising themselves as real estate agents had grown from 37 in 1871 to 175 by 1890, and some real estate men felt the need to distance themselves from the sharp practices of others in the business. Other professional and trade groups were being created then, and in 1892 12 local agents formed the Cleveland Board of Realtors, with DANIEL TAYLOR as its first president. Stressing cooperation between members, the board set standards for real estate contracts and commission splits between agencies. By 1911 the board had 54 members and admitted its first woman member in 1927.
Not all real estate sales were handled by real estate agents, nor were they all in wealthy neighborhoods. Subdivisions catering to the upper strata of business and professional men and socially prominent families may have set the fashion for new allotments, but the majority of people owned or rented older homes in more modest neighborhoods. And the way in which they found housing did not necessarily employ the services of the realty board members. In the latter half of the 19th century, Cleveland witnessed a massive immigration of people from Eastern and Souther Europe. Newly arrived CZECHS, POLES, SLOVAKS, JEWS, ITALIANS, GREEKS and other ethnic peoples settled into ethnic enclaves within Cleveland and turned to other members of their culture for assistance in finding work, homes, and financing. Polish immigrants often found such help from community leader MICHAEL KNIOLA, for example. Others might seek help from the parish or temple officials or from local merchants, neighbors, and established relatives. "LITTLE ITALY," near Univ. Circle, is an example of the type of ethnic enclave that was formed by the tendency of new immigrants to settle near others from their former villages overseas.
In at least one case locally, help in finding housing was provided by an employer. In the 1890s a subsidiary of the National Carbon Co., the Pleasant Hill Land Co., created an allotment of 484 small parcels bordering 8 streets next to the company's plant on the west side. Five of the streets were whimsically named for birds--Thrush, Plover, Robin, Lark, and Quail--and gave the community its nickname of "The BIRD'S NEST." The Slovaks who moved here built and expanded 1 or 2 houses on each of these small lots into multifamily boarding houses and created a tight-knit community.
During the decades after the turn of the century, development was reaching the edges of Cuyahoga County. From GLENVILLE and COLLINWOOD on the east, to LAKEWOOD on the west, men like Mars Wagar were turning farms and orchards into residential allotments. A complex web of streetcar lines linked these allotments to jobs downtown and interurban lines connected Cleveland with surrounding counties. Annexations ceased with the acquisition of BROOKLYN HTS. village in 1927, but developers had already begun taking an interest in the affairs of the suburban cities that were springing up on Cleveland's periphery. In 1901, for instance, the first CLEVELAND HTS. hamlet's Board of Trustees included Rockefeller's realtor, John G. W. Cowles, who was involved with the creation of the Euclid Hts. allotment within the hamlet. Real estate men were developing entire communities and sat on governing boards to help preserve the ambiance they were trying to create.
Zoning laws began to make their appearance in the 1920s--supplementing the deed restrictions that had formerly been the only means of regulating land use and preserving values--and were upheld by the U.S. Supreme Court in 1926 in the case of VILLAGE OF EUCLID V. AMBLER REALTY CO. Earlier attempts to preserve real estate values were usually overrun by the rapid growth of Cleveland. Clinton Park and Euclid Hts. were predicated on particular urban dimensions and transportation methods, but rapid population increases and technological changes pushed their intended luxury markets farther away from the expanding urban core. Only with Shaker Hts. was a luxury community planned which had the size to retain its identity amid growth, and which took into account the emergence of the automobile. Based upon the original work done by the Shaker Hts. Land Co., Shaker Hts. realized its successful form under the inspired marketing of the Van Sweringen brothers (see ORIS P. AND MANTIS J. VAN SWERINGEN) during the period between the World Wars. The true heir to the legacy of Millionaires Row on Euclid Ave., it became one of America's premier planned communities and grew eastward toward GATES MILLS.
The postwar period of real estate in Cleveland has been characterized by 2 themes: the accelerated outward pressure on growth as the Baby Boom began and the issue of racial discrimination. The new surge in family size and the emerging pattern of consumer materialism accelerated demand for new homes for young families. Automobiles permitted longer commutes to the downtown and greater demand for homes in more distant SUBURBS. With the coming of the interstate highways in the 1950s and 1960s, the evolution of a multi-core city was accelerated.
Another cause of rapid suburbanization was racially motivated. Since the Civil War and the advent of public transportation, there has been a noticeable tendency of people to move, mostly by economic class, away from urban centers; with each generation of wealthier citizens seeking residences farther out and being replaced, in turn, by waves of successively less-affluent people. But in the 1960s this process accelerated into a phenomenon called "white flight," as the attempt of AFRICAN AMERICANS to find better homes, schools and neighborhoods led to white residents fleeing out of fear of eroding property values. The purpose of deed restrictions had been to reinforce homogeneity within neighborhoods and reinforce values. Restrictive covenants against selling homes to African Americans and other minorities were predicated on this principle of homogeneity, but in 1948 the U.S. Supreme Court declared that racially exclusive covenants were unenforceable in court. Fair housing laws (see FAIR HOUSING PROGRAMS) would help achieve integrated neighborhoods in areas like Cleveland Hts. and Shaker Hts., but area-wide integration remains elusive. The Cleveland Assn. of Real Estate Brokers was formed in 1948 to promote "Democracy in Housing," when African Americans found that they could not join the Cleveland Board of Realtors. The realtor's board accepted their first minority member, J. Howard Battle, in 1968 (see CLEVELAND AREA BOARD OF REALTORS).
The 1970s were marked by a nationwide attack on anti-competitiveness of real estate boards and their multiple listing services. An area-wide multiple listing service had been first established in 1912, but it died out during the Depression. In the place of a comprehensive multiple system, local systems began springing up after 1949. A board-operated MLS was authorized in 1968, but generated heated protests from the established local system members and died in 1970. The present county-wide MLS was formed in 1975, which finally succeeded in merging the local systems and was incorporated as NORMLS in 1986. Many argued--and still argue--that the existence of a board-owned multiple listing service, and the cooperative agreements that supported it, served to hinder the ability of people to buy and sell homes without the services of a realtor and to fix costs unnaturally high.
Costs and competition have been a part of real estate speculation since the founding of Cleveland 200 years ago. The size of the metropolitan area has grown far beyond what its founder expected, new technologies have made many innovations possible in real estate development, and the profession has evolved into a large, specialized industry since 1796. But the basic principle remains: to anticipate future changes in the real estate market and to create projects that increase land values.
William C. Barrow
See also CLEVELAND AREA BOARD OF REALTORS.