Residential Property Tax Abatement

Community Challenge

Map of Ohio showing the location of Akron.

Akron, Ohio, does not have an affordable housing shortage. Rather the challenge for that city is housing values that are too low to attract new investment. This has deterred both new housing construction and rehabilitation as homeowners and landowners recognize they will not see a return on their investment.

Much of Akron's existing housing stock is in such disrepair that replacing existing units with new, safe, and code-compliant housing makes much more financial sense than extensive rehabilitation. The city's shrinking population, compounded by widespread sprawl and population loss in the Northeast Ohio region, has also dampened demand for housing in Akron for many decades.

Planning Solution

In April 2017 the Akron City Council adopted a citywide 15-year, 100 percent residential property tax abatement. The program was the top implementation item in the city's Planning to Grow Akron Housing Strategy report, also adopted in 2017.

The report reiterates Akron Mayor Dan Horrigan's bold goal to increase the city's current population of 198,000 to more than 200,000 by 2020 and 250,000 by 2050. (The city population peaked with the 1960 census at 290,000, when Akron was the world leader in automobile tire manufacturing.)

In his January 2018 State of the City speech, Mayor Horrigan asserted his rejection of the status quo in Akron: "I don't know about you, but I refuse to manage this city's or my own decline."

The tax abatement program is a key part of that new planning strategy and has had immediate and encouraging success.

Homes in Akron, Ohio. Photo courtesy Dpavlish.

Jason Segedy, Akron's director of Planning and Urban Development (DPUD), says the tax incentive works because it bridges the gap between the cost of new housing construction and the sale price of the homes. "What we're doing with tax abatement is unlocking latent demand for urban living, by increasing the supply of marketable housing in Akron neighborhoods," notes Segedy. "We believe that the new interest in building urban housing here is directly tied to the tax abatement program — it is helping builders and developers have projects that pencil-out in our extremely low-cost housing market."

The tax abatement application process is very straightforward: A developer or owner pulls a building permit with the county building department (Akron does not administer its own building permits). A copy of the permit and a completed City of Akron Community Reinvestment Area Tax Abatement-Residential Application must then be provided to the Akron DPUD by the developer or owner. The department reviews the application for completeness. If it meets the requirements, it is forwarded to the county auditor where the property is recorded as eligible for the 15-year, 100 percent tax abatement. The auditor's office conducts a field inspection to verify the new construction or rehabilitation after which the owner's tax abatement status is noted.

The tax abatement goes into effect once the project is completed. And if the property is sold during the 15-year abatement period, the new owner receives the abatement benefit. All new housing construction and rehabilitation must meet the city's zoning requirements and must be properly maintained per city standards. The housing portion of any mixed-use project is also eligible for tax abatement.

Akron's DUPD has posted on its website all necessary information for program participants, including the tax abatement enabling ordinance, a fact sheet, which includes a very helpful list of the types of housing improvements that may qualify for a tax abatement, and a second list of improvements that are unlikely to add increase the assessed value of a house.

Akron, Ohio

Current Results

As of late 2018 there are more than 1,000 units of new housing in some stage of the development review process. The new units include single-family homes dispersed throughout the city's neighborhoods as well as multifamily buildings with one project topping 150 units. These figures are in stark contrast to the trend prior to the program's launch. In 2015 fewer than 10 houses were built in Akron while more than 500 were demolished. (There are approximately 96,000 housing units in the city.)

Further Reading

Jason Segedy. "Housing First: Rejecting Managed Decline in the Rust Belt." Notes from the Underground (blog). July 19, 2018.