More upgrades likely with change in law
359 residential projects in Dayton received tax abatements last year
Changes to state law will give greater tax relief to some property owners who invest in their homes and buildings.
House Bill 463, which Gov. John Kasich signed in January, extends the maximum amount of time remodeled properties in Community Reinvestment Areas can receive tax abatements.
Dayton had 359 residential properties that received abatements under the program last year, including medium and largescale developments like the Sixth Street Lofts, the Water Street flats, the Brownstones at 2nd and the First Place Luxury Apartments.
“The way this program has worked in Montgomery County has been very successful, and cities like Dayton and others in the county have used this to target neighborhoods where there had been some blight and decay,” said Montgomery County Auditor Karl Keith.
Scores of individual apartments and homes across the city also have received tax relief for rehabilitation and renovation projects as well. Last year, the total residential value of properties in the program was $56 million, city officials said.
Reinvestment areas help renew and rebuild neighborhoods — especially struggling ones — by incentivizing property improvements, and the expanded program encourages more people to upgrade their homes, condos and apartment buildings, according to some local officials.
Of the 46,560 residential properties in Dayton, less than 1 percent receive abatements through the program.
The Community Reinvestment Area program lets cities and counties designate areas where investment has been discouraged to offer property tax breaks for revitalization of the existing housing stock and the construction of new structures, according to state officials.
Since the mid-1990s, residential remodeling projects in reinvestment areas have been eligible to receive property tax abatements up to 10 years for housing with two or fewer units and up to 12 years for buildings with three or more units.
Commercial and industrial remodeling projects in reinvestment areas also could receive abatements for up to 12 years.
But HB 463 extends the abatement periods for eligible remodeling projects to 15 years, which is the same time limits for new construction projects.
About 15 percent of the city of Dayton is located in Community Reinvestment Areas, which includes Webster Station, the Oregon Historic District, parts of downtown and the College Hill, Innerwest and Twin Towers areas.
The city processed 22 Community Reinvestment Area applications in 2016, and 54 properties’ tax abatements expired and were removed from the program, said Peter Thornburgh, senior development specialist with the city of Dayton.
Dayton used the program strategically, targeting certain areas of the city that could use some assistance to bounce back, said Keith, the auditor.
Encouraging people to renovate their properties will build up neighborhoods, increasing local property values, and expanding the abatement period could trigger higher levels of investment, Keith said.
Residential remodeling projects eligible for the program must have investments of at least $2,500 for housing with two units or less and $5,000 for housing with three or more units. Commercial and industrial remodeling projects must invest at least $5,000 to qualify.
Another change to state law also could lead to greater property tax relief for people who invest in their properties.
Previously, people would get a tax break on the increased value of their properties tied with remodeling projects.
But the state has changed how abatements are calculated.
Soon, all of the increased value on a property after a remodeling project will be tax exempt, not just the part attributable to renovations. County auditors used to have to “parse what increase in value was attributable to renovation and what was not,” according to a post on the law firm Keating Muething & Klekamp’s website.