A) Property Tax Abatement 101
1) What is property tax abatement?
- Property tax abatement is the exemption of all or part of property taxes for a period of time.
- In Ohio, property owners in approved property tax abatement districts (Community Reinvestment Area) are exempted from paying the additional taxes that result from the increased taxable value of major improvement projects or new construction.
- Property tax abatement is meant to encourage property improvement projects and new construction.
- Under Shaker’s current proposal, only residential properties qualify for property tax abatement.
2) How does property tax abatement work?
- By State Law, properties within Community Reinvestment Area (CRA) districts are eligible for property tax abatement for improvements and/or new construction.
- Property owners who make eligible improvements to their homes or construct a new house can apply for property tax abatement on the increased value of their property.
- Owners still pay property taxes on the original value of the property, but not on the increase in value from the improvement. If there is no increase in value, there is no property tax abatement. For example, if an owner adds a new room that increases the value by $10,000, the owner does not pay taxes on the $10,000.
- In projects that involve demolition of existing structures, the abatement is on the difference between the land value and the value of the new development.
3) How do I benefit as a resident from property tax abatement?
The City hopes to grow its long-term tax base through new investments encouraged by property tax abatement. New property and income taxes will help the City and schools to continue to provide superior services to all Shaker residents.
4) For more information:
5) Why is the City offering property tax abatement?
- 5)n both the City’s Housing Preservation Plan and its Strategic Investment Plan, the community identified the need to develop new housing to attract new market niche buyers, stimulate reinvestment in neighborhoods, and to spark catalytic change. Property tax abatement, like infrastructure enhancement, is a key way in which a city can stimulate private reinvestment in a neighborhood.
- One of the main barriers to the creation of new housing in a fully built out city with a strong housing market, is the high cost of redevelopment. This typically creates a financing gap that makes these projects unprofitable to the private investor.
- Tax abatement provides an alternative to using cash on hand or borrowing funds for a project.
B) Property Tax Abatement and Your Home
1) What types of improvements qualify for tax abatement?
- According to the Cuyahoga County Auditor’s Office, acceptable improvements that increase the property value for tax abatement purposes are an increase to the footprint of a property, addition of new amenities, or increasing the effective age.
- Currently, improvements such as updating kitchens and bathrooms do not qualify.
2) Will my kitchen or bath remodel qualify for property tax abatement?
No. The Cuyahoga County Auditor’s Office does not consider remodeled kitchens or baths to be improvements that increase the taxable value of the home.
3) How is the amount of tax abatement that a property receives determined?
- The County Auditor determines if the project has increased the value of the home, which dictates the level of tax abatement. The City does not determine the actual amount of eligible improvements, however, a City designated Housing Officer must certify that the improvements were made.
- All eligible housing projects in a residential CRA automatically qualify for abatement, and the same terms apply across the board.
4) If I made improvements to my property last year, do they qualify for property tax abatement?
To qualify for property tax abatement, the property improvement must have been started after the State approved the City’s CRA application. Therefore, the City would not be able to offer property tax abatement for a project completed before November 22, 2006.
5) Should I be concerned about living in a tax abatement district (Community Reinvestment Area)?
- No, property tax abatement generally encourages new investment in communities and attracts new homebuyers, strengthening an area.
- Many communities in Cuyahoga County offer property tax abatement i.e., Solon, Strongsville, Cleveland Heights, Berea, Fairview Park, Parma, et al.
C) Property Tax Abatement and Your Community
1) Are other cities using property tax abatement?
Yes, many communities in Cuyahoga County offer property tax abatement i.e., Solon, Strongsville, Cleveland Heights, Berea, Fairview Park, Parma, etc.
2) Has the City used property tax abatement before?
Yes, in 1992, the City established a CRA district to entice OfficeMax to locate its headquarters in Shaker Heights. OfficeMax received property tax abatement as part of its incentive package. This district is no longer a Community Reinvestment Area.
3) How long will the program be offered?
The City's ordinance includes a two-year sunset clause. Therefore, City Council will review the effectiveness of property tax abatement after two years and decide whether to continue the program.
4) Will the property tax abatement for the 5 approved areas be available for only residential properties or commercial properties too?
The City only approved property tax abatement for single- and two-family residential structures.
5) Why did the City designate more than one Community Reinvestment Area?
The advantage of designating more than one CRA is that the community can tailor the tax incentives directly to the needs of a target area i.e., incentives for new construction in an area with vacant lots; incentives for rehabbing homes in an historic district, etc.
6) How will property tax abatement affect our schools?
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Tax abatement encourages new investment, and can build the long-term tax base for City, schools, and library without an outlay of dollars in the short-term.
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To minimize the short term reduction in revenue to the City, schools, and library, relatively short tax abatement periods (5-8 years) are being recommended.
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In that short period of time, a project can increase in value, producing a long term tax revenue benefit to the schools. For successful projects, the short term sacrifice of revenue is ultimately worthwhile. A project that fails provides neither short term nor long term benefits, regardless of tax abatement.
Certified Shaker
How can I become certified?
Call the housing specialist at 216-491-1333 to make an appointment for a preview of your property.
How can I view current Certified Shaker listings?
Click to see what is currently available for rent.
I want to correct housing code violations before setting up an appointment for a Certified Shaker preview. How do I know if my property has housing code violations?
Call Housing Inspection at 216-491-1470 to check the status of your property or to schedule an inspection.
If apartments can be Certified, why aren't condominiums included?
Condominiums are excluded because the owner cannot regulate all areas of the property. they are only able to control the maintenance and condition of their percentage of ownership. Apartment owners regulate and are responsible for all areas.
Is there a cost associated with becoming Certified or renting a Certified Shaker property?
There is no cost to either a landlord or tenant.
Once my property is Certified, will prospective tenants be shown the property?
Out-of-town prospects will be escorted to your property; others can view it from our website.
What if my property has housing code violations?
All housing code violations must be corrected before a certification appointment can be made.
Who is eligible to participate in the Certified Shaker program?
All property owners within the Shaker Heights City School District who want to improve their rental property. All neighborhoods, styles and price points. Condominiums are the exception.
Will you screen prospects prior to bringing them to see the rental property?
No. It is the responsibility of the landlord or property manager to conduct professional tenant screening. However, the City does offer a discounted tenant screening service. For more information, call 216-491-1333.
Energy Efficiency Programs
I own a two-family home. Can I use the program to make the unit(s) more efficient for my tenants?
Yes. While you may only receive a rebate if you are an owner-occupant, we encourage you to take advantage of the free technical assistance and the discounted energy audits to make your property more energy efficient. Click here for more information.
If I made energy efficiency improvements to my home last year, will these qualify for a rebate?
No. To be eligible for a rebate, work must be done after your application is approved and you have received the energy audit. Click here for more information.
What if I want to make my apartment building or commercial structure more energy efficient?
The City is happy to provide technical assistance to owners of apartment and commercial buildings. You will need to work directly with an energy auditing firm, however, to get a quote for testing your structure. Pricing will vary based on size, number of units, etc. Click here for more information.
Neighborhoods
Are there volunteer opportunities with your department?
Yes. The department has unpaid college internships each year for students interested in housing, architecture, urban planning and research. For more information, call 216-491-1373 or click here.
Does the City have a list of recommended contractors?
No, the City does not recommend specific contractors. The Building Department maintains a list of contractors approved to do business in the City. The webpage list is updated monthly.
Does the City have financial incentive programs for residents interested in making home improvements?
Yes, the City has a number of programs, including several that are designed specifically for income eligible seniors City-wide. Two rehab specialists are also available to provide free technical assistance. You can schedule an appointment weekdays 9:00-11:00 AM or 2:00-4:00 PM by calling 216-491-1370, or click here.
Does the City have programs to encourage apartment building owners to maintain their properties?
Currently the only financial incentive available is through the County’s Rental Rehabilitation Program. However, the City also offers marketing assistance to owners of high quality rental units. For further information on either of these programs, or to make suggestions on what you think might be needed, please call 216-491-1333.
Does the City help find rentals?
The City maintains a list of Certified Shaker properties which meet quality standards set by the City. To see vacancies in Certified properties, click here. You may also obtain a hard copy at City Hall and the Community Building. For more information, click here.
How do I find out about my Neighborhood Association?
Contact information for neighborhood associations (also known as Community Associations) is listed on this website.
How does the City help seniors maintain their homes?
Income eligible seniors citywide can access grants of up to $2,000 to help fix exterior violations, and free paint through the City's paint program. There are also County loan programs aimed specifically at seniors. For more information, call 216-491-1370.
I’m thinking about buying a rental property. What can you do to help me?
The City's Housing Specialist can assist you in better understanding the rental market, and introduce you to City programs aimed at helping landlords maximize their property's potential. For further information, please call us at 216-491-1333.
What assistance is there to help pay for fixing code violations?
The City operates a number of financial incentive programs which can be used to address housing code violations. Depending on your income and where you live, you may be eligible for low interest loans, grants or both. Call 216-491-1370 for details.
What does the Housing Preservation Plan address?
The Housing Preservation Plan was drafted in Fall of 2001 by Hunter Morrison as a consultant for the City. It outlines recommendations on how the City can address housing issues to ensure that the City remains competitive in the marketplace in the future. Key recommendations include strengthening our code enforcement efforts, improving the quality of the housing stock, aggressively marketing the City and its neighborhoods, and re-establishing the City’s garden-city landscape setting. If you want further information on the Housing Preservation Plan, call 216-491-1370. Click here to view a draft of the Executive Summary report.
What is the Fund for the Future of Shaker Heights?
The Fund for the Future is a private non-profit group which offers secondary mortgage financing to encourage people to make home purchases in areas within the Shaker Heights School District where their race is under represented. Low-interest down payment assistance loans of up to 10% of the purchase price are offered to a maximum of $12,000. For further information, call 216-491-1457.
What is the Heritage Home Program?
This is a 3.5% ten year term loan for exterior and interior home improvements in older (over 50 years) or historic homes valued at or below $500,000. Call the Cleveland Restoration Society, 216-426-3106, for further information.
What is the Paint Program?
This is a free paint program for income eligible owner occupied single- and two-family properties located south of Van Aken Blvd. or for income eligible seniors anywhere in the City. To find out if you qualify, call 216-491-1370.
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