Jacob Schmidlapp moved from his native Piqua, Ohio, to Memphis, Tennessee shortly after the civil war, where he went in to the tobacco and cigar business. In 1874, he moved to Cincinnati and made his fortune in distilling. He was a self-made man whose fortune rivaled those of established families like the Emerys and the Longworths; he bought a mansion with 50 rooms and nearly 50 acres on Grandin Road and started the Union Savings Bank and Trust. “I do believe,” he declared, “that a man who is allowed to live to the age of sixty, or perhaps between fifty and sixty, … and has accumulated a fortune, does not fully appreciate the value and duty of such an accumulation if he does not administer his estate himself during his life.” Schmidlapp decided to administer his estate for the purpose of “Low-Cost Housing for the Wage Earner.”
Owing to an opportunity to serve as a Trustee for an Industrial School for Negros, Schmidlapp learned “that we could in no way help the Negroes as quickly as by offering them better housing facilities.” He had no experience in housing management, but his project required, he thought, only “average business ability” and a love for the work. He determined to make the venture return a modest profit of 5%. Setting aside another 5% to cover taxes and repairs, and targeting an affordable rent of 50 cents per room per week, he determined he needed to build his housing for $250 per room. To minimize the cost of the exterior walls he decided to make each unit a square. He recognized that “the individual bath is the greatest contribution to the improvement of the moral standard” — this was by no means a required amenity in rental housing in the early years of the twentieth century.
Beginning in 1911, Schmidlapp chose to test his ideas in Walnut Hills. For the investment of $250 per room, using union labor he could produce brick buildings with plaster walls about 135 square feet per room. While most units shared walls with adjacent units, each apartment had a private entrance. His initial construction was on Chapel Street, near Park, just west of the then-new Douglass School building. Another project, still standing, went in a block east of Douglass, on Ashland at Chapel, later named Gordon Terrace. The initial experiment was a modest commercial success, and very good housing for working African American families: “with houses accommodating twelve families we have lost of six days rent in three years. We learned that the colored people appreciated better housing and improved rapidly under such conditions.” He was able to rent these units for $10-$12 per month; given the African American laborer’s wage of $3 per day, he figured that one day’s wage a week paid the month’s rent. (Similar housing Schmidlapp constructed for white laborers, who made a premium of 10 to 15% above the African Americans, were a few dollars more a month, and had small private back yards.)
Schmidlapp hoped that his efforts would be an example for others. He called his plan “Philanthropy plus five per cent,” hoping that wealthy investors might park some of their funds in similar ventures with safe but limited returns for the benefit of the community – although it doesn’t seem that anyone took the idea to another city. While he built much of his housing for African Americans, he was careful not to offend the sensibilities of working whites by pressing for integration.