CINCINNATI — Big changes could be coming for Cincinnati’s residential tax abatement program.
The tax abatements are temporary tax breaks for some homeowners who remodel or rebuild residential properties with up to four units.
“Right now, the vast majority of these incentives go to our wealthiest neighborhoods,” Cincinnati Mayor Aftab Pureval said. “Many residents, particularly lower-income residents, aren't aware of the opportunity of abatements.”
On Thursday, the mayor, alongside council member Reggie Harris, announced a proposal to overhaul the program.
If passed by city council, the new system would designate neighborhoods into one of three tiers based on need.
Neighborhoods would be categorized based on their average household income, poverty rate, housing values, mortgage applications approved and originated, market change value and new construction permit activity. Neighborhoods with the greatest need for incentives will be able to receive more generous incentives. Those already attracting strong investments will receive less generous incentives.
During the five-year period ending in 2021, Hyde Park received the highest amount of incentives, worth more than $43 million, according to city data. South Cumminsville received the least, worth just over $14,000. Explore the data below.
“We can help expand growth to communities that have been historically underinvested while making sure others are paying their fair share,” Harris said.
Te'Airea Powell with the East Westwood Improvement Association said the discrepancy between neighborhoods shows the abatement may not have been communicated in some places.
“You can't apply for something that you don't know about,” Powell said.
The city announced administrative updates to help. The city plans to launch a streamlined online application and focus targeted outreach directly to communities.
In 2020, a group sued the city arguing the program was racially discriminatory. Read the complaint here.
On Thursday, the city solicitor said she was hopeful the changes would resolve the lawsuit.
“While we continue to disagree with the legal substance of the lawsuits claims, I think what this shows is that we have a common goal with the plaintiffs, which is to have a more equitable tax incentive program,” said City Solicitor Emily Smart Woerner.
If the proposal is passed, it would take effect in September. Read the full ordinance here.
