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Mayor Pureval answers residents' questions about tax abatement reform

Nathan Ivey (left) asked resident questions to Mayor Aftab Pureval about proposed changes to the city's residential tax abatement program.
City of Cincinnati
/
CitiCable
Nathan Ivey (left) asked resident questions to Mayor Aftab Pureval about proposed changes to the city's residential tax abatement program.

Mayor Aftab Pureval answered questions about his proposed overhaul of residential tax abatements at a town hall event Thursday night.

Pureval described the event as the last public meeting before City Council votes on the legislation next week.

"When I first introduced this a few months ago, I said this is the first draft. We are now on version C because of conversations like this," Pureval said.

Watch the full town hall on the city's Facebook page here.

Independent podcast host Nathan Ivey asked questions submitted by residents prior to the event, as well as during the discussion both in person and online.

First, a few reminders:

  • A residential tax abatement eliminates property tax on new value added to a property for a set amount of time.
  • Residential abatements apply to housing with up to four units but are most commonly used for single-family homes.
  • A separate program regulates commercial tax abatements, which includes housing with five or more units and all other development projects.

RELATED: How Cincinnati's residential tax abatement program works, and how it could soon change

The town hall questions mostly echoed what has been brought up previously, including criticism about abatements in general and about the current system, which is pretty clearly unbalanced.

An external report released last year found the program disproportionately benefits majority-white and higher-income neighborhoods, and an ongoing lawsuit filed by dozens of Black residents alleges the city's policies are racially discriminatory.

Pureval said the proposed changes are aimed at increasing development in neighborhoods that aren't seeing much investment now.

"So now the maximum abatements allowable by state law, which is 15 years, [would] only be available in our poorest neighborhoods," Pureval said. "And the neighborhoods that are the wealthiest, their tax incentives are considerably lower. We are hoping that those reforms will have more equitable results."

RELATED: City's residential tax abatements disproportionately benefit high-income, white neighborhoods

The proposed changes slightly increase abatement value and length in most city neighborhoods, or those deemed in need of most investment according to criteria like average income and new construction activity. The ordinance would also significantly decrease the value and length of abatements in a few select neighborhoods, like Hyde Park, Oakley and Mt. Adams.

Ivey asked Pureval: "Do you believe these proposals will lead to a more equitable city?"

"I do, but not by themselves," Pureval replied.

He says even if the abatement program went away altogether, the city would still have a wealth gap and segregated neighborhoods.

"Because the causes of those wealth gaps and the segregation are multifaceted, right?" he said. "It's institutional racism, systemic racism that led to redlining, the inability for Black families to own homes — which is the primary tool that Americans use to generate wealth — the inability to have access to jobs that have good wages and good benefits."

Pureval says abatement reform needs to be paired with other work, like increased funding for the Affordable Housing Trust Fund, the American Dream Downpayment Initiative, and the HARBOR program for current homeowners who need help making home repairs.

RELATED: What went wrong when council asked for public feedback on abatement reform

Another concern is how tax abatements affect income for public schools, which are funded primarily by property tax revenue.

"This question is from Chris ... he wants to know even if this new version is to pass, how does the city plan on making up the money that Cincinnati Public Schools will continue to lose with these abatements?" Ivey said.

The Cincinnati Federation of Teachers says the program costs CPS $6 million to $7 million a year.

That number, and the question itself, is debatable: does Cincinnati Public Schools lose out on revenue because of residential abatements? In theory, no, because abatements are designed to incentivize development that wouldn't happen otherwise.

Pureval says the proposed changes would be significantly better for CPS than the status quo.

"We have significantly reduced the incentive and significantly reduced the term length," he said. "What we are doing is making more property taxable, particularly in the wealthiest communities."

Timeline

The ordinance is still expected to get an initial vote in City Council's Equitable Growth and Housing Committee Tuesday, March 28, at 1 p.m.

If it passes from committee, it will get a final vote at the full Council meeting March 29.

All council meetings are open to the public for observation or comment.

You can give two minutes of public comment either in person or virtually via Zoom. If you choose the in-person option, you need to sign up with the Clerk's Office at the right side of the dais (as you walk into Chambers, facing the dais).

If you choose the virtual option, you must sign up online no later than 2 p.m. the day before the meeting.

Local Government Reporter with a particular focus on Cincinnati; experienced journalist in public radio and television throughout the Midwest. Enthusiastic about: civic engagement, public libraries, and urban planning.