Tax Abatement Condos in Cleveland Ohio
Cleveland Crain’s Article:
Cleveland’s abatements a plus
By JAY MILLER
3:54 pm, February 27, 2007
Though it’s a program that reduces taxes for property owners, the city of Cleveland’s 20-year-old residential tax abatement program eventually will generate new property tax revenue for the city and the county, according to a study released by Cleveland State University.
Mark S. Rosentraub, dean of CSU’s Maxine Goodman Levin College of Urban Affairs, told Cleveland City Council this morning that the increased tax revenue can be attributed to the city’s tax abatement policy largely because 60% of Cleveland home buyers chose the city due to the availability of the abatement.
The Cleveland State study says the city, the Cleveland Municipal School District and Cuyahoga County will receive $53.8 million in new property taxes between 2007 and 2020 from properties that have already been built but that would not have gone up without tax abatement.
That figure is based on responses to a survey of 400 recent Cleveland home buyers. CSU found that 60% of the respondents said they would not have purchased homes in the city were it not for tax abatement.
“The city was attractive because it allows (the home buyers) to get more house for the money,” Mr. Rosentraub said.
While the homes themselves do not immediately increase tax revenue because they are abated, the study found that the homes’ land value, which is not abated, is increasing, as is the values of nearby properties that do not have tax abatement. Residents also pay payroll taxes to the city.
The city of Cleveland offers 100% tax abatement for 15 years for any new or rehabbed housing in the city. City Council must decide this year whether to continue the existing policy, eliminate tax abatement altogether or modify it.