Residential propety

Cleveland City Council’s changes to home tax abatement plan aim to encourage more home renovations

CLEVELAND, Ohio — Members of the Cleveland City Council on Tuesday recalled part of Mayor Justin Bibb’s proposed overhaul of the residential tax abatement, particularly as it relates to remodeling existing homes.

The changes approved by the council’s Development, Planning and Sustainability Committee would provide greater property tax relief than that proposed by Bibb for the renovation of single-, two- and three-family homes.

Bibb’s proposal sought to abandon the city’s longstanding one-size-fits-all approach to tax abatement, which for years allowed homeowners to pay no additional property taxes for new home construction and substantial renovations to existing houses.

To replace this approach, Bibb sought to provide different levels of property tax relief for one-, two-, and three-family buildings, depending on their location. Under Bibb’s plan, homes in neighborhoods with strong housing markets would receive an 85% abatement on taxes resulting from renovation, homes in “middle” market neighborhoods would receive 90%, and homes in neighborhoods with weaker housing markets would still have been eligible for a 100% abatement.

Bibb’s plan also capped allowances, in which the tax relief would only apply to a maximum of $350,000 of home value. Above this mark, owners would have to pay their entire tax bill.

But council members abandoned that methodology on Tuesday, opting instead for a 100% rebate for renovating single-family, two-family and three-family homes, regardless of location. They also removed the ceiling for renovated houses.

The changes made by the council were intended to further encourage rehabilitation of the city’s aging housing stock, a more affordable and environmentally friendly option than building new homes. They have also sought to discourage developers from demolishing existing homes and building new ones in search of tax advantages, Councilman Kerry McCormack said.

The committee also made other changes to the plan, and the board expects more changes in the coming days.

This story will be updated.