I am writing today to express the significant misgivings which Greater Ohio Policy Center shares with a number of other groups concerning House Bill 371. If enacted, House Bill 371 would authorize a tax exemption – or freeze—in the value of land in the pre-residential development stage and reduce property taxes for land purchased for a residential development purpose.
As currently written, HB371 proposed a property tax exemption from increases in the value of unimproved land subdivided for residential development from the time that the land is subdivided to the time that either residential construction begins, or the land is sold. The bill specifies that residential construction is not deemed to have begun even if streets, sidewalks, curbs, driveways or water, sewer, or other utility lines have been constructed or installed. While this is intended to create an incentive for developers to retain and develop land and promote an increase in residential development, the fiscal impacts on local government will negatively impact local governments and school districts.
While the House Ways and Means committee did modestly improve the legislation by limiting the exemptions to 8 years and ensuring that the freeze is based on fair market valuation (and excluded CAUV), Greater Ohio remains concerned about the impact this bill will have on the state of Ohio. Specifically, it is our belief that House Bill 371 essentially subsidizes sprawl. The bill further incentivizes and promotes economically and environmentally unsustainable development across the state.
Ohio’s population growth has flat lined. The United States Census Bureau estimates that Ohio’s population has grown by only 0.7% since 2010, the lowest rate of growth since the 0.4% growth three decades ago. That same census data reports that Ohio currently has a vacant housing rate of 10.6%. These data shows that Ohio currently has in place an abundance of available housing infrastructure. This is not to suggest that there are not growing communities that might need new housing development. However, it is our firm belief the financial risk of building-up an undeveloped area must be carried by the developer, not the local government in which the development is proposed to occur.
At a time when the state has an abundant supply of available residential infrastructure and the lowest rate of population growth in thirty years, it simply does not make sense to make local governments carry the risks and costs of new greenfield development. This one-size-fits-all mandate is an unnecessary incentive; please allow the markets to dictate where growth is needed.
At this time, Greater Ohio respectfully requests that you oppose advancement of House Bill 371 towards a full vote by the Ohio House of Representatives.
Alison D. Goebel
Manager of Government Affairs