There is a smell coming from Cleveland Heights and contrary to what some would like you to believe it’s not from the construction at Oakwood and Cedar Center North. It’s the stench of desperation in the form of Tax Abatements. For those not in the know, that’s when the city grants an exemption on property taxes in hopes the property will sell. Usually such property is new and overpriced. Once the exemption expires the homeowner must start paying property tax. The theory behind this is that people who buy a tax abated property will fall in love with their homes and communities over the years and won’t bail when the tax bill comes. Doesn’t always work that way. Turns out that tax abatement is not a surefire selling tool going by the vacancies at Bluestone, Severance Place, and Courtyards at Severance. Not to mention Cutters Creek in South Euclid.
Fact is if you tax abate housing you are effectively providing city services like trash collection, police and fire, for FREE. We all know in this world NOTHING is free. So you’re really passing on the costs to other residents.
Heights politicians are proposing a new development at Meadowbrook and Lee which will include ground floor business and upper floor condos. All tax abated. Read the article and the comments at Patch. Go ahead. I’ll wait.
http://clevelandheights.patch.com/articles/developer-envisions-modern-apartments-at-meadowbrook-and-lee
Ok, now you better sit down before you read the next sentence. Believe it or not, I agree with Fran Mentch and Garry Kanter on this issue. Although given Garry’s business of reselling old houses which do not receive abatements, it’s possible he’s motivated by self-interest rather than the public good. It is funny to read his comments about “traditional” and “non-traditional” Cleveland Heights renters though. What exactly does he mean by that? Jew vs. Gentile? White vs. Black? As if Cleveland Heights is in a position to be picky about who moves to their town.
Tax abatement is the wrong way to grow cities. It was wrong when South Euclid did it with Cutters Creek and it’s wrong when Cleveland Heights does it with Bluestone, Severance Place and if they get away with it Meadowbrook & Lee.
Cleveland Heights would do much better by its citizens and local business owners if they brought their income and property taxes in line with their surrounding neighbors rather than offering abatements to a few cheapskates who will get buyers’ remorse after their first break-in. Then they wouldn’t have to cry “POACHING” whenever a business leaves for greener pastures.
Cleveland Heights would also make more headway with bringing people to their shopping districts if they cracked down on the crime that has made people so fearful to be there after dusk. Offering free parking on weekends is only gonna get you so far.
While I agree with your concerns that tax abatement can be abused by well-connected developers and politicians, I think your flat-out opposition to all tax abatement is simplistic. Tax abatement, if fairly and equitably applied, can be useful for a city like South Euclid – which is essentially built out and can’t really develop – only redevelop.
ReplyDeleteThat’s why I favor an across the board, five year, 100%, tax abatement for all new construction – commercial and residential – and building improvements.
An abatement on new construction is self-explanatory. Here’s how it would work for improvements: Say you own a home (or commercial building) valued at $100,000. You make improvements that increase the value of that property by, for example, $20,000. Is it really fair to punish someone who has improved his property, particularly when that improvement will not increase the use of city resources, like policy, fire, or trash/recycling removal? For five years after the improvements are completed, you would continue to pay property taxes on that original $100,000 – and the tax on the increased value will only kick in after five years.
Looking at our commercial situation: think of the deteriorating strips on the northeast and southwest corners of Mayfield/Green and the vacancies there. Recently, the city used grant money to improve the streetscape there with planters, stylized bike racks, artwork and benches – but the buildings remain in their unsightly condition. The structures are owned by multiple landlords, and they’ve done the bare minimum to maintain their property. If a tax abatement can be the tool that convinces one owner to improve his portion of the strip, that may encourage owners to improve their own properties. The same principle applies to residents improving their own homes.
No plan is perfect. But if tax abatements can be used to improve our city in the longer term, we should embrace them. But as stated before, they should be applied equally and not merely to favored parties.