17
TAX
ABATEMENTS
AND MORTGAGE
PERFORMANCE
A Cleveland-based study by the
Reinvestment Fund, an equity real estate
data and investment firm, has found that
foreclosures do not increase after tax
abatements end. According to Crain's
Cleveland Business, the foreclosure rate for
non-abated city properties from 2008 to 2018
was 5%, while the abated property foreclosure
rate was 3%.
"You can see that tax abatement is not
the driving force of resident displacement,
and it has been an important part of bringing
development into the community," Tania
Manesse, community development director,
said at a Cleveland City Council committee
meeting on Tuesday, February 4, Crain's
reports.
Crain's study found that the tax abatement
program has declined since a peak in 2006.
And abatements make up only a fraction of
Cleveland's property overall, according to the
study. e share of abated parcels has gone
from a high of 4.6% in 2008 to 2.5% in 2018.
ere was no strong evidence that a
spike in sales follows the expiration of an
abatement. Of the 3,858 tax abatements that
ended from 2008 to 2015.
Among city parcels with an expired
abatement, 19% sold at the end of up to three
years after an abatement, while citywide, 48%
of Cleveland households have moved within
the last four years.
ough the study indicates abated tax
abatements are having a positive impact on
the city's housing market, Cleveland still has
some of the highest rates of foreclosure in the
country, as well as a high volume of vacant
and zombie homes.
Counties with a notably high percentage
of vacant homes included Ashtabula County,
located northeast of Cleveland. According
to Stacker, 23.3% of total homes are vacant
in this country, and Ohio holds one of
the highest rates of zombie homes in the
country, with a total of around 891 in the
state. Around half of these vacant homes
are in the Cleveland-Elyria metro area, with
431 homes. Additionally, the top two ZIP
codes nationwide with the highest number
of zombie properties (with at least 100
properties in pre-foreclosure) are Cleveland
ZIP codes 44105 (57) and 44108 (54).
Journal
