A proposal to change Cincinnati’s residential tax abatement program faces some criticism as City Council gets closer to a vote. A Council committee will discuss and hear more public comment Tuesday afternoon.
Mayor Aftab Pureval’s ordinance would limit the value of abatements in wealthier neighborhoods and increase value — and, theoretically, increase participation — in lower-income neighborhoods.
"I personally view this as a first draft of this ordinance," Pureval said in late January. "So [public] comments have a lot of weight as we continue to work on this ordinance; improve it, change it."
Learn more about the proposed changes in this presentation from city administration (story continues after):
Council suggestions and timeline
Council's Equitable Growth and Housing Committee will discuss and hear more public comment at its meeting Tuesday, Feb. 14 at 1 p.m.
Committee Chair Jeff Cramerding says the committee will not vote on the ordinance until Feb. 28, but the group could vote on proposed amendments.
Vice Mayor Jan-Michele Lemon Kearney is proposing a few changes to the mayor's ordinance:
- The creation of a new position to assist with public education, applications and monitoring efficacy
- Creation of income criteria to waive the $250 abatement application fee
- A new bonus to abatements for new construction homes that do not use natural gas
- Amendment to the visitability bonus to add more value for increased accessibility
Kearney is also asking for a report to assess the impact of residential tax abatements on Cincinnati Public Schools.
Public feedback so far
Over a dozen people spoke to council in a committee meeting Jan. 31. Many said the changes would be positive, but said tax abatements don't address the actual causes of inequality between neighborhoods.
"We need to find more dollars and resources for low income homeowners and first-generation homeowners with property tax assistance; a fund for forgivable loans or grants for home repairs and home improvements; and then waive the application fees," said Sister Sally Duffy of Price Hill. "Anything we can do to generate equity and passing along generational wealth, rather than generational poverty, I believe is is a goal that we all share."
Duffy is on the city's Housing Advisory Board, which gave the mayor feedback about the external report that formed the foundation for the proposed changes.
RELATED: Cincinnati's residential tax abatement program could get an overhaul under new proposal
Pureval says officials are aware that changing residential abatements won't solve all the problems.
"But that is not all we're doing," he tells WVXU, pointing to increased funding to the Affordable Housing Trust Fund; for lawyers to represent tenants in eviction court; cash assistance for low-income homeowners to make repairs; and down payment assistance for first-time homebuyers.
General consensus is that those increases are good, but still not enough to meet the need. Pureval says that's already part of discussions for the next budget, which will be passed this summer.
"And I would just add that that's more than just rhetoric," Pureval said. "We've been in office for a year and have put a historic amount of dollars into affordable housing strategies ... so we have a proven track record on this issue."
Some are more critical of the proposed changes, including Michelle Dillingham of the Cincinnati Federation of Teachers.
"You guys keep referencing the property tax working group? Well, there was 77 recommendations, not just one, and one of them was to consider the impact of over-inflating values of our neighbors," Dillingham said. "There's lots of good talking points about how this is going to help [reduce] segregation and retain Black and legacy families. I'm just not seeing it in black and white in the ordinance."
It's true the Property Tax Working Group recommended studying the affect of residential tax abatements on neighboring property values, and it's true the HR&A report did not include that evaluation.
Dillingham says the abatement program overall takes money from public schools, and the proposed changes don't do enough to address that. She criticized the mayor's office for not discussing the proposal with Cincinnati Public Schools before introducing it, the way he talked with other community stakeholders.
"Arguably, the schools are one of the biggest stakeholders," Dillingham said.
A CPS spokesperson confirmed to WVXU the city did not reach out for discussion ahead of introducing the measure.
The effect of abatements on CPS revenue is difficult to determine. One goal of abatements (both commercial and residential) is to incentivize construction or improvements that wouldn't take place otherwise. In those cases, CPS doesn't actually lose out on new revenue because if the abatement didn't exist, neither would the new property value.
Another critic of the proposal is Bob Newman, an attorney representing homeowners suing the city over the current abatement program. He says the proposed changes don’t go far enough.
"I don't think Hyde Park needs any more residential tax abatements except for affordable housing," Newman said. "I also think that what has to happen is with respect to the African American neighborhoods, not only are they in need of tax abatements, but also low interest or no interest loans to do improvements to improve the value of their of their property."
The City Solicitor's Office said last month they hope to settle the lawsuit once abatement reform is passed. Newman says a settlement may not be possible if the ordinance passes in its current form.
