ASHLAND — A recent amendment to the city’s main tool for attracting housing developers strips away guaranteed property tax abatements and leans more on negotiating powers.
Ashland City Council on July 15 unanimously approved changing its ordinance regulating Community Reinvestment Areas, or CRAs, by adding language that no longer guarantees 100% and 75% property tax abatements.
Essentially, Ashland City Council’s move gives city leaders more negotiation powers that could spell positive implications for Ashland City Schools, an entity that relies on property tax assessments for some operational funds.
“This was an incentive that we created to try and lure these developers to our community,” Ashland Mayor Matt Miller said.
Ashland first established its CRA ordinance in 2010, under Mayor Glen Stewart.
At the time, the law provided housing developers a way to avoid paying 75% of property taxes on single-family homes and multi-family homes for a period of 10 years.
When Miller got elected as mayor in 2016, the tax incentive wasn’t working the way city leaders had hoped.
“One of the biggest challenges was trying to lure developers to our area to build housing,” Miller said, adding investors would regularly say it didn’t make financial sense to build in Ashland.
So city leaders went to work, he said.
In November 2019, Ashland’s CRA ordinance received a facelift. That’s when city council approved new language, which essentially guaranteed 100% property tax abatements for 10 years, or 75% property tax abatements for 15 years. (Read below.)
Compare the laws
The document on the left is the full language of the updated CRA ordinance, passed July 15. The document on the right is the full language of the 2019 version of the law.
It worked.
Miller said days after passing the updated CRA language he received a call that eventually led to the 192-unit apartment complex dubbed “The District” on George Road. After that, Arrows Landing.
Today, Miller said the city is working with several housing developers.
CRAs affect local school districts
But aggressive property tax incentives come at a cost. Ashland County Auditor Cindy Funk has said the biggest loser is the school district.
The state funds schools, in part, by property valuations. Tax abatements, like the ones passed for Arrows Landing and The District, aren’t considered in state funding formulas for schools, thus creating a false impression of increased “local capacity.”
“With increases in income in our community and also the large property tax valuation increase in tax year 2023, our local capacity percentage has increased significantly and the state share per student and percentage will continue to go down,” said Kyle Klingler, the treasurer for Ashland City Schools.
In other words, there are more people making more money in Ashland. But that doesn’t necessarily mean they’re paying more in property taxes, right now anyway.
Klingler praised city council’s move. Anything to address changing public school funding models will help, he said — especially in the coming years.
Klingler said funding for Ashland schools is decreasing over the next two years.
In 2025, the school expects to receive $13.7 million from the state. In 2026, that number goes down to $13.2 million, a 3.8% decrease.
In 2027, Ashland expects another 0.3% decrease.
Ashland City Councilman Jason Chio applauded the CRA change.
“I appreciate this language change. Now it’s a negotiation, not a boilerplate giveaway. We don’t need to give away anymore right now,” he said.