Madeira officials juggling pros and cons of tearing down old homes to make way for new ones

MADEIRA, Ohio -- While Madeira city officials consider new zoning regulations to contain the effect of teardowns -- the demolition of older, smaller homes to make way for big, new ones -- on their neighborhoods, Blue Ash officials are encouraging the phenomenon.

The Community Reinvestment Area created by Blue Ash in 2014 offers an eight-year tax abatement program to property owners who tear down and replace, or significantly renovate, existing homes. The tax abatement means property owners pay taxes only on the value of the lot in the case of new construction, or on the original home in the case of renovation. It's available in the "downtown" area surrounding the intersection of Kenwood and Cooper, which encompasses about half of the city's 3,500 single-family units.

Twenty-four homeowners have taken up Blue Ash's offer. Typically, the program has meant replacing a a small, mid-century home -- worth $60,000 and comprising about 1,000 square feet -- with a 2,000-square-foot house valued around $300,000, assistant city manager Kelly Harrington said. Blue Ash requires abatement properties be owner-occupied, code-compliant and inspected annually.

The new and renovated houses are generally in ideal condition, Harrington said. While the city won't see a tax increase for eight years, property values are increasing, and community response to the program has been positive.

"I had one gentleman, with teardowns on either side, who came to us and said he'd wanted to renovate for years, but didn't feel he'd get a good return on his investment until the new construction happened," Harrington said.

Ten minutes south in Madeira, teardowns are sparking conversations about zoning regulations and the character of a community.

Madeira has seen about 130 homes demolished and replaced with new construction since 2010, said city manager Tom Moeller. That's about 4 percent of the city's 3,500 residential units.

"It's a great school district. The community is a great location," Moeller said. "And because we don't have much, if any, open developable land, the best way to accomplish new housing is to buy property that is small, that can be bought for a reasonable price, and demolish and rebuild."

Most of the teardowns are happening in the northeast section of Madeira, where lots are roughly one-sixth of an acre and the ranch or Cape Cod homes are small, less than 1,500 square feet. Most are built between the 1930s and '50s. These homes, valued between $120,000 and $170,000, are torn down and replaced with two-story homes that are between 2,500 and 2,900 square feet. The values increase, too, up to $400,000 and $500,000.

Increased property value means increased property taxes for the city, county and school district. And some of the demolished homes were too deteriorated -- with crumbling basements, asbestos or mold -- to make saving them financially reasonable, said Paul Friesz, owner of Buckhead Homes, the building company that has handled more than half of Madeira's teardowns.

"Sometimes housing needs to be recycled," Moeller said.

Some residents have had concerns, Moeller added, about the homes being too large and the increased valued pricing people, particularly first-time buyers and retirees, out of the community.

"It's a double-edged sword. It's great for the community, but it's also bad because we're pushing some people out, in my estimation," said Madeira city councilman Chris Hilberg, a lifelong resident who also serves on the planning commission. "We don't want to stop progress in Madeira, but we want to have respect to the people who live here."

Responding to residents' concerns that the new homes were too large, looming over other homes in the neighborhood, Madeira changed zoning regulations several years ago. Homes on Residence B lots, the ones that most teardowns have been on, can cover just 28 percent of the property, down from 35 percent.

"That was a good idea," Friesz said. "We want our houses to fit into the neighborhood, too."

But community complaints have continued, and Madeira council members are discussing further zoning changes, including lowering the lot coverage to 25 percent. Friesz does not support this change, which he said could mean decreased property values if investors turn the small, deteriorating homes into rentals, or less attractive new construction.

However the zoning discussion ends, Hilberg said the teardowns already have affected Madeira.

"It's a striking difference, going from a Cape Cod to a two-story, four-bedroom home," Hilberg said. "It is changing the character of our neighborhoods."