City of Cincinnati property-tax payers, I’d like to thank-you. In 2010 my husband and I moved downtown to one of the first condo conversions in the Central Business District and even though our new home was much more expensive than the one we left behind, our property tax bill was cut in half. Part of the purchase package included six more years of a ten year abatement that the city provided as an incentive to get people to move downtown before it was the thing to do and you’ll be paying our fair share to cover basic services and school funding until 2017.
Turns out, as far as income is concerned I’m pretty typical of the 5% of homeowners who benefit from these arrangements. As Enquirer reporter, Cindi Andrews pointed out in her excellent article City tax breaks benefit well-off neighborhoods from last March
a disproportionate amount of the investment is occurring in the city’s wealthiest areas – Hyde Park, Mount Lookout, Columbia Tusculum and Mount Adams – the four neighborhoods with the highest household income – were all in the top 10 for abatements. Hyde Park, whose median income of $125,000 is Cincinnati’s highest, according to U.S. Census data, also has the most abatements: 434, with a total abated value of $65.9 million. The four neighborhoods combined hold 7 percent of the city population, but account for 26 percent of the residential abated value.
She calculates the program is costing Cincinnati Public Schools the equivalent of 104 teachers, the city the equivalent of 17 police officers, and Hamilton County the equivalent of 400 days of care for abused or abandoned children, among other costs.
The truth is my husband and I would have moved to our building without the abatement. By the time we arrived on the scene, all 114 units had sold out in the first year and it was easy to imagine ourselves enjoying the central location, a well-equipped gym and rooftop terrace with a beautiful river view. But for the pioneers who toured a shell with the proposed walls marked in chalk on bare concrete floors, the abatement was an important incentive, especially when all their friends told them they were crazy to move downtown in 2005.
And if we look at the abatement on our building as an investment, it’s been a damn good one for the city. Prior to the conversion the building was underutilized, probably valued around $2,000,000. When the residents start to pay full-boat in 2017, we’ll be paying on improved values of over $50,000,000. Ten years is a reasonable amount of time to wait for that kind of potential, not to mention the fact that developers converted several other buildings in the Central Business District after the amazing success of the old Polk Building.
As Cindi’s research shows, Cincinnati’s abatement program is more extensive than many similar sized cities in the region. Indianapolis doesn’t have one at all. In Columbus, about a dozen neighborhoods qualify. In Pittsburgh, the abatement period is much shorter. Maybe the very success of our program means it’s time to reexamine how we use abatement and ask the wealthiest among us to pay our fair share.