On Development: The Great Abatement Debate

Tax abatements can be one tool for addressing affordable housing, but Columbus should look beyond abatements to ideas being implemented in places such as Montgomery County, Maryland.
Makley Place
Makley PlaceBrian Williams

One point that combatants in the Great Abatement Debate may agree on is that the city’s generous dispensing of tax abatements to housing developers is just one tool among many that are needed to address a critical need for affordable housing.

Even those who support the dozens of 15-year, 100-percent property tax abatements to apartment developers say we need an “everything-and-the-kitchen-sink approach.”  Unfortunately, the city does not emphasize – and/or most news outlets don’t delve into – the other tools.

And so, we learn that, in 2022, tax abatements were granted in Franklin County on $5.82 billion worth of property – more than Cuyahoga and Hamilton counties combined. Developers must ensure that at least 30 percent of all homes developed on those properties are reserved for households earning no more than 80 percent of the area median income (AMI). Another option for developers is 10 percent of homes affordable to those at 60 percent AMI, plus another 10 percent at 80 percent AMI. 

I discussed this with a national housing expert who runs a New York think tank called the Center for Public Enterprise, and who formerly worked as a policy analyst at the Chicago Department of Housing. (Full disclosure: He’s also my son.)

“There’s not a place in the U.S. that needs abatements less than Ohio, which is expected to have through-the-roof growth through 2030,” said Paul Williams, who grew up attending Columbus City Schools. “If you do [tax abatements] without getting a ton of affordability out of it, you’re wasting taxpayer money.”

Supporters of abatements, however, point out that the obvious market demand for scarce housing in a booming region does not guarantee that large, national developers will flock here. For one thing, even as housing prices in Columbus rise, they’re not as high as in, say, Austin, and thus – amid rising cost of building materials and high interest rates – developers say they have trouble making ends meet. The tax abatements are intended to address that shortfall.

Carlie Boos, executive director at the Affordable Housing Alliance of Central Ohio, said the abatements are an important tool – but not an ultimate solution. She cited the bond program as another important tool.

Voters in 2019 approved $50 million in affordable housing bonds – expanded to $200 million as part of a multifaceted $1.5 billion bond package approved by 68 percent of voters in 2022. It helps attract additional state and federal funds, and includes:

  • $80 million to build affordable apartments

  • $50 million for affordable homeownership through the Central Ohio Community Land Trust

  • $40 million to preserve housing affordability in targeted areas (Near East Side, Linden and Franklinton) that have seen home prices skyrocket

  • $30 million to help and house people without homes

Boos added that it’s important for Columbus and the region to keep looking for additional tools.

She said one touted by Williams at the Center for Public Enterprise sounds worth studying: Montgomery County, Maryland, created a $100 million fund to invest directly in new projects – helping some developers close the gap on funding so they can build the housing. (The same kind of gap that abatements are intended to fill in Columbus.) As a result, the county, through its Housing Opportunities Commission, is controlling-owner of the buildings, with 30 percent of units set aside as affordable – many of them available to people below 50 percent AMI. The model was featured both in The New York Times and on a recent Bloomberg News podcast.

Fifty years ago this month, Montgomery County was the first place in the country to require that new apartment complexes and housing developments with more than 50 units set aside 15 homes for low- and moderate-income residents. The Moderately Priced Dwelling Unit law became a model for communities around the country, but it was just one tool in the county’s affordable housing toolbox. The county’s broad policy also emphasized identifying and protecting “naturally occurring” affordable homes, which often are older homes in good repair and fully functional, but without granite countertops – and therefore not so expensive. Rule No. 1 was to preserve those buildings and keep them affordable.

The county also sought to identify property it owned that might be suitable for housing, and to ensure any development included a substantial number of affordable units. The policy expressly said the goal for county land was not to make a profit, but to ensure affordable housing.

Such tools in Montgomery County – especially the Housing Opportunities Commission – show “what taking an active approach is about,” Williams said. “So now we have cities all over that are starting to do this.” He cited the Atlanta Urban Development Corp., along with Atlanta's public-housing agency, and he said Chicago is also exploring the model. In addition, he’s worked with legislators in Rhode Island and Massachusetts.

Boos noted that the multi-tool approach in Columbus has itself become a model for some cities. But she also said Columbus can continue learning from others.

Brian Williams is a consultant and freelance writer. A former Columbus Dispatch reporter, he is retired from the Mid-Ohio Regional Planning Commission.

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