Cuyahoga County Planning Commission Weblog: February 2007--I just got done reading through this post and the concomitant links--
28 February 2007
Cleveland tax abatement study A new report (PDF) from the Maxine Goodman Levin College of Urban Affairs at Cleveland State concluded that the City of Cleveland's residential tax abatement program is increasing Cleveland's population and tax base. Dean Mark Rosentraub says that the program is working and should be retained. This morning's edition of The Sound of Ideas on WCPN discussed the subject with Rosentraub, Cleveland Councilman Joe Cimperman, Nate Coffman of the Home Builders Association of Greater Cleveland, and Cuyahoga County Treasurer Jim Rokakis.
Labels: Cleveland, tax policy
I'm nearly speechless. This was not a holistic appraisal of a program and its overall effects on a city, all of its citizens, and the economy overall. Just a few of the flaws:
1. They talked only to the people who benefit from tax abatement. They didn't talk to the people who still pay the property taxes, and whose property value appraisals have risen along with the recording of the new home sales. The increase in revenue, where $1.00 in tax abatement generates $1.50 in new taxes, is made on the backs of those who pay, not those who are abated. (a big "duh" here to Olivera Perkins of the PD, who blithely reports that "For every $1 in abated taxes, a total of $1.50 in new property taxes is generated for the city, the Cleveland public schools, and Cuyahoga County.")
2. They didn't address the fact that subsidizing new-home construction leaves old homes vacant, and everybody is complaining about the vacancies, the imbalance. If we didn't put incentives on the new, easy, and cheap, the old and valuable wouldn't be vacant. It has something to do with supply and demand.
3. Nowhere is there mention of the number of new homes that have never been sold, as up above 55th Street. They are embarrassing vacancies and failed development, but most people don't drive over there, let alone live there.
4. There's no talk of the foreclosures on the new tax-abated properties, where people have been sold way more than they can handle, and where they lose the house, and their credit standing, in short order, and then the house sits vacant, perhaps even along with the older house it replaced. We saw this happen first hand up around Milford School. Take a drive over that way sometime.
I expect a way better community dialogue and a way better study than we got here. We're not done yet. This study is not final, by a long shot.