Dayton extends tax break for downtown housing rehab despite some opposition

The city of Dayton’s elected leaders have approved extending the tax abatement on downtown residential rehab projects to 15 years — a move opposed by a couple of school board members.

Previously, property taxes on improvements made to existing housing in Ohio’s community reinvestment areas, including the one downtown, could be exempted for 10 or 12 years.

But state lawmakers have extended the allowable abatement period, with the goal of stimulating investment.

“We have data that shows that these abatement programs attract and grow investment,” said Dayton City Manager Shelley Dickstein.

Dayton Board of Education member Joe Lacey opposed the expanded tax break, saying downtown is doing just fine at attracting investment without an additional giveaway.

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“If economic development will happen with or without the abatement, then there’s really no reason for the abatement,” he said at last week’s school board meeting.

RELATED: Tax changes could mean more upgrades for Dayton properties

The Dayton City Commission last week unanimously approved an ordinance amending its rules on property tax exemptions in the downtown community reinvestment area.

Under the new rules, housing with one or two units that undergo rehabilitation work of more than $5,000 are eligible for a 15-year tax abatement.

For housing containing more than two units, rehab work of at least $10,000 makes a project eligible for a 15-year abatement.

Under the program, 100 percent of the increased value of the properties because of the improvements are exempted from property taxes during the abatement period.

Rehab projects downtown are now eligible for the same length of abatement as new construction projects.

MORE: 1,000 and counting: Dayton’s home fixer-upper program grows

The investments that people and developers make to their homes and apartment buildings will be around a lot longer than 15 years, and the abatements provide an extra incentive to invest, said Dickstein.

The abatements will encourage improving the existing housing stock and will help make renovation projects financially feasible, she said.

“Usually the savings they are experiencing goes into the property,” she said.

Last year, Dayton had 359 residential properties that received abatements under the community reinvestment program citywide, including medium and large-scale developments like the Sixth Street Lofts, the Water Street flats, the Brownstones at 2nd and the First Place Luxury Apartments.

But Lacey said the downtown reinvestment area is one of the most economically attractive parts of the Dayton metro area and its hot residential real estate will remain that way without new tax breaks.

He said the abatement is just “giving money away,” and the city seems eager to grant abatements. He said he supports property tax exemptions but only when they truly spur investment that wouldn’t happen otherwise.

“The increased abatement period is an unnecessary tax break that benefits downtown at the expense of other neighborhoods and the expense of the school district,” he said.

MORE: Dayton considers a new reinvestment area

Lacey asked the board to join him in sending a letter in opposition to the city’s ordinance. He and board member Ronald Lee voted to oppose the city’s ordinance.

They were in the minority and other board members declined to support the request.


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