Cincinnati has a $1.9bn infrastructure fund – why can’t it spend it to fix its housing crisis?

Cincinnati, Ohio’s City of Seven Hills, has been drawing residents in from its suburbs – and, increasingly, other large cities – for years now. The only flat thing in sight is the housing supply.

“Our city’s growing,” Aftab Pureval, Cincinnati’s mayor, said in an interview. “For the first time in a generation, our population is growing.”

Many have come to see the city as an escape from high housing costs. That might not be true for long.

“You have more people living here over the last 10 years,” said Pureval, a Democrat. “But you would expect our housing stock to keep up with that growth, or at least stay flat.”

It has not. “It’s the worst-case scenario for us,” he told the Guardian. “Because we’re such an old city, we’re losing housing stock and not building housing fast enough, so we actually have less housing.”

Resolving such problems can cost many millions – billions, even – of dollars. Imagine a city had such a fund at its disposal.

Aftab Pureval, the mayor of Cincinnati. Photograph: Bloomberg/Getty Images

Cincinnati does, in fact, have a $1.9bn fund: the legacy of what Pureval described as a “really difficult decision” to sell off a railway line connecting it to Chattanooga, Tennessee, to Norfolk Southern in 2024.

The decision was controversial. There was “a lot of skepticism” from Republican state legislators, Pureval said. After a protracted public argument, and a narrow referendum, the line was sold.

The deal showed what is possible when the interests of Republicans and Democrats align. But strict restrictions imposed on the fund – preventing the city’s leaders from spending it on new housing – also underline the limits of possibility when political partisanship collides with governance.

Conflicts between red states and blue cities – between conservative legislators and state governments interposing their will on progressive municipal governments – are playing out nationwide, from Missouri to Arizona. Such tensions can be particularly sharp in Ohio.

Across the state, guns have been a flashpoint: cities such as Cleveland, Clyde and Cincinnati tried to pass local ordinances regulating firearms, only for a Republican-supported state law to ban local gun ordinances. Other battles have covered the minimum wage, plastic bags at supermarkets, and the availability of vapes.

Some of this stems from ideological differences. “There’s the hot-button issues on which there will be no compromise,” said Bill Seitz, a former Republican lawmaker who retired in 2025 after more than two decades in the legislature.

But there is also a fundamental mistrust by Republicans of how Democratic governments spend money. “I mean, it’s a little hard to argue with the fiscal mismanagement that plagues Chicago and and plagues California and plagues New York,” Seitz said.

While Cincinnati has had fiscal problems for a generation, it’s hard to argue that the city’s leaders caused that problem.

Its population peaked in the 1950s. As white flight shifted population into the suburbs and the Rust belt de-industrialized, the city’s population spent 50 years in slow decline, shedding 40% of its residents.

The Xplorer train, introduced by the New York Central railway to run between Cleveland and Cincinnati in the 1950s. Photograph: Bettmann/Bettmann Archive

Cincinnati was stuck with the bill for expensive infrastructure, built for a bigger community – with fewer people to pay for it.

Fast forward to 2025. “We sold the railroad because we were facing a $400m deferred capital maintenance bill, and were very concerned that we didn’t have the money to maintain the infrastructure that we had, much less build new infrastructure,” Pureval said.

Norfolk Southern had offered $500m for the rail line in 2009. City leaders said they were being low-balled. By the time Pureval came into office, in 2022, the city and the railroad were locked in a bitter argument about terms for renewing the lease. Norfolk Southern had been paying $25m a year. The city wanted $65m. Rather than turn to arbitration, they negotiated a sale.

Here, however, the interests of the progressive city and the conservative state aligned.

“All of our state representatives and senators from Hamilton county, the one county that was affected the most, were for it,” said Seitz, who was instrumental in getting the legislation passed. “Republican and Democrat, there was no there was no dissension there at all. They were all on board.”

The sale became a political football for other reasons.

In February 2023, a Norfolk Southern train derailed in East Palestine, Ohio – about 240 miles away, on the other side of the state. Railcars burned for two days. Fumes from the giant black cloud of smoke could be smelled in the air three months later.

A black plume rises over East Palestine, Ohio, after the railroad crash. Photograph: Gene J Puskar/AP

The toxic fire fueled an argument among Republicans that the state shouldn’t keep the liability of a railroad on its books.

State senator Louis Blessing was an opponent of the sale, at first. An iconoclast among Ohio Republicans, the Cincinnati-area lawmaker instinctively believed that government should be fighting monopoly power where it can.

“We had a famous Ohio mayor from Cleveland, Tom Johnson, who had the famous line that if you privatize a lot of these things like water and electricity, you won’t own them; they’ll own you,” Blessing said. “And he’s right.”

Blessing thought the city was being taken for a ride – but ultimately came around when it was clear he was outnumbered.

Cincinnati voters still had to approve the sale. Norfolk Southern spent more than $4m on marketing in support of the referendum. It passed 52% to 48%.

As Republicans were writing new requirements for rail staffing and safety measures into state law after the East Palestine disaster, they also put limits on how Cincinnati could, and could not, use a billion-dollar fund. They required the trust fund’s revenue only be used to repair or replace existing infrastructure like streets, sidewalks and parks.

Safeguards were embedded into the trust fund “to make it very, very clear that future mayors and future councils couldn’t use that as a political slush fund”, said Pureval.

Even though the sale has nearly unanimous support in the legislature – the final state senate vote was 30-1 in favor – a deal had to address Republican mistrust of a Democratic mayor, and a city council without a single conservative.

“Many people, both in the city and outside the city, had a dim view of whether the current city council would responsibly spend the money, and not just fritter it away on boondoggles,” Seitz said. “So we limited it to the traditional infrastructure improvement, of which any ageing city like ours needs plenty.”

Republicans view such cities “as very blue liberal havens”, said Blessing. “And there’s a kind of an ethos that they need to be saved from themselves. They’ll say that they’re overspending. They’ll say that they’re riddled with crime. So on and so forth. You know, it’s antagonistic.”

The upshot, for Cincinnati, is a growing housing crisis – and a $1.9bn fund the city can’t use to meaningfully address it.

Pureval worked as an antitrust attorney in Washington, before returning to Ohio to work as a corporate lawyer for Procter and Gamble. A few years later, he won election as the county’s clerk of courts, and caught the eye of the Democratic party. He was elected in 2021 as Cincinnati’s first Asian American mayor, on a progressive platform of housing affordability.

Cincinnati had the highest percentage increase in average rental costs in the US in 2025. “You would expect that to be New York or Miami or San Francisco,” said Pureval. “Cincinnati regularly is in the top five, if not the number one city in the country, for percentage of rent increases.”

The Cincinnati Southern Railway Trust created by the sale represents about $5,000 for every one of Cincinnati’s 315,000 residents. The $56m to $58m a year it generates in revenue, via investment growth, offsets about $388 in taxes for every household in the city.

But the mistrust of state Republican lawmakers of the city’s leaders today dictates how the profits can be used. Housing is not an option.

Pureval at a campaign event in November 2018. Photograph: John Minchillo/AP

For a mayor like Pureval, who knows his political opponents well, it must be frustrating. His first job in politics was an intern for Mike DeWine, Ohio’s current Republican governor, when he was a US senator in Washington.

“That was a really important experience for me,” he said. “Because it solidified my progressive values, while also showing me that the folks on the other side of the aisle were, to a large degree, just trying to do what they thought was right, even though I disagreed with how.”