Current News

/

ArcaMax

Desperate for affordable housing, some cities sweeten tax breaks for developers

Robbie Sequeira, Stateline.org on

Published in News & Features

Last month, city council members in Fort Worth, Texas, decided developers that received massive tax breaks to build affordable housing would no longer be able to buy their way out of the obligation by paying a $200 annual fee in lieu of each unbuilt low-income unit.

In Columbus, Ohio, leaders voted in December to expand the city’s tax break program for affordable housing. And in Cincinnati, builders can now get an automatic property tax exemption for some affordable housing projects, rather than having to apply.

Tax abatements have long been a tool cities use to encourage developers to build homes low-income residents can afford. Developers pay lower property taxes in return for setting aside homes or apartments for potential residents with lower incomes. Cities lose that tax revenue, but they gain affordable housing.

As the nation’s housing crisis continues, many cities are altering their policies. Some are making the programs stricter; some are offering more money or extending tax breaks for more years. No matter the approach, municipal leaders say they’re trying to figure out how to get more of their residents safely housed.

“As a city, we can’t force developers to make housing affordable. But we have tools,” said Sarah Odle, neighborhood development coordinator for the city of Fort Worth.

“The name of the game for a developer is to make money,” Odle said. “And the name of the game for us is if we’re going to give you incentives, then we want something substantial in return — and that’s housing that is truly affordable.”

 

Expanded tax breaks

In Fort Worth — which attracted nearly 50,000 new residents from 2020 to 2023, the most of any city in Texas — tax abatements have driven affordable housing for years. Developers can receive a five-year tax break if they build in designated zones and set aside 20% of their units as affordable housing.

Last month, however, the Fort Worth City Council removed the option that allows developers to pay a n annual$200 fee per unit in lieu of building affordable homes. Developers are now required to set aside affordable housing if they want the tax breaks.

In December, the Columbus City Council in Ohio expanded the tax abatement program beyond certain neighborhoods to include the entire city, granting developers a 100% tax break for 15 years.

...continued

swipe to next page

©2024 States Newsroom. Visit at stateline.org. Distributed by Tribune Content Agency, LLC.

Comments

blog comments powered by Disqus