Inner-city blight means greater tax burden on Cuyahoga County suburbs, study claims

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Inner-city blight means greater tax burden on Cuyahoga County suburbs, study claims

March 25, 2014 [Leila Atassi,]

CLEVELAND, Ohio — A study released this week by the non-profit Thriving Communities Institute concludes that the epidemic of foreclosure, abandonment and blight in Cleveland and five inner-ring suburbs is responsible for a nearly $45 million shift in the tax burden to Cuyahoga County’s other 53 communities.

The study, which will be the subject of discussion at Cleveland City Council’s Development, Planning and Sustainability Committee hearing this morning, is based on an examination of assessed valuations on residential property since 2000, as well as tax rates. (See the full report in the document viewer below.)

According to the analysis of data from the Ohio Department of Taxation, the assessed value for residential property in Cleveland and five inner-ring suburbs considered to be “distressed”  — East Cleveland, Maple Heights, Garfield Heights, Euclid and Newburgh Heights — fell 33 percent between 2006 and 2012.

Values declined about 12 percent in the rest of Cuyahoga County.

Yet, suburban residents paid a disproportionately higher percentage of countywide taxes for the general fund, bond issues and social programs, as well as for the Cleveland Metroparks, Cuyahoga Community College and the Cleveland-Cuyahoga County Port Authority, the study states.

As property values rose before the recession, revenues from the countywide levies rose 63 percent. Conversely, when values dropped between 2006 and 2012, charges from countywide levies dropped four percent, too.

But voters continued to pass requests for new property tax increases to support countywide services — as thousands of properties in Cleveland and the inner-ring suburbs became abandoned.

As a result, according to the report’s analysis of tax records, charges assessed to property owners in Cleveland and the distressed inner-ring dropped 24 percent, while the outer-ring experienced a one percent increase.

The study goes on to project that in the future, requests for new countywide levies likely will be at a higher millage, as one mill generates less revenue than it used to. Currently, it would take a 1.13-mill levy to bring in the same tax revenue that could be generated by one mill in 2006, the study asserts.

Jim Rokakis, director of the Thriving Communities Institute said in an interview Monday that the study proves that abandonment and vacant properties affect every property owner in Cuyahoga County.

“This study confirms the fact that depressed property values in the City of Cleveland and certain inner-ring suburbs have shifted additional costs to more stable communities in Cuyahoga County, since countywide agencies are forced to seek larger levies to support their activities,” Rokakis said. “If you think because you live in Westlake or Solon that vacant properties are not your problem, you are mistaken.”

The report goes on to advocate for demolition as the solution to the problem, citing another recently released study that demonstrated that razing blighted houses boosts property values in all but the most devastated Cleveland neighborhoods.

Demolition has a profound stabilizing affect on declining neighborhoods and is a central component to any strategy to combat urban decay, the new report states.

Since 2006, Cleveland has spent nearly $59 million to demolish about 6,000 abandoned and condemned residential structures. The Cuyahoga Land Bank has committed another $27 million to demolish more than 2,400 houses in Cleveland, East Cleveland and other communities.

Cuyahoga County Executive Ed FitzGerald, at his state of the county address last month, announced that he would seek the ability to borrow up to $50 million to demolish abandoned property. But County Council is yet to vote on the initiative.

Joel Ratner, president and CEO of Cleveland Neighborhood Progress, which helped fund the study, said in an interview Monday that he hopes its findings will help “connect the dots” for any county council members who might be unconvinced that blight in the inner city affects their suburban constituents.

“I think too many people have said, ‘This is an urban problem,’” Ratner said. “We now know that it’s not at all. Anyone who uses the county library system or the Metroparks or any service that is connected with a countywide levy needs to understand that, unless we deal with this, we’re going to have more challenge in funding those institutions.”

Cleveland City Councilman Tony Brancatelli, who also is board chairman of the Cuyahoga Land Bank, said the analysis has the power to motivate public officials countywide to help lobby for state and federal funding for demolition. And he hopes it will urge the county to issue more bonds than the $50 million FitzGerald offered up last month.

“As a first step, I certainly love it and am appreciative,” Brancatelli said. “But doing this slowly and in small amounts is not going to keep up with this ever-growing problem. We have to be very aggressive.”

Stay tuned to the comments section below for live coverage of the Development, Planning and Sustainability Committee hearing, beginning at 9:30 a.m.