Earlier this week, the Ohio Senate introduced its substitute budget bill (HB33). It makes changes to the Ohio Brownfield Remediation and Building Demolition & Site Revitalization Programs, and how communities may use residential tax abatement in the future. 

These changes will make it more difficult to undertake redevelopment projects in Ohio.  If you desire to reach out to your Senator and Senators you have relationships with, do so on June 8 or 9.  The next version of the budget, the Senate’s omnibus bill, will come out early the week of June 12 and be voted on by the end of that week.

Below is information ULI Cincinnati has received from the Greater Ohio Policy Center and the Ohio Housing Council.

From the Greater Ohio Policy Center:

Changes to Brownfield Remediation + Building Demolition and Site Revitalization Programs

The Senate changed the brownfields grant program so that only county commissioners can submit project applications.  Under the program that has operated since 2021, anyone could apply to the program, as long as they had a county cooperative agreement.  This shift to designating counties as the only eligible applicants will create burdens on county staff and disadvantage rural and smaller counties with limited staff.

The other significant change to the program is that private sector entities are not named in a newly established list of eligible sub-recipients. GOPC interprets this omission as meaning private sector-led projects will need to create an agreement with a eligible sub-recipient first, before the application then goes to the commissioners.

These changes create inefficiencies and introduce unnecessary risk. The net result will likely be fewer brownfield redevelopment projects.

Here are talking points provided by the Greater Ohio Policy Center you can use when you call your Senator to express your concerns.

Changes to Residential Tax Abatement 

The Senate has specified that *newly created* Community Reinvestment Areas, Urban Renewal Areas, and TIF districts, cannot offer “tax incentives” (e.g. abatements) to residential rental projects for the next five years. Nor can rental projects in Opportunity Zones apply for the state Opportunity Zone tax credit until 2028.

New rental housing in converted buildings or new builds on vacant lots has led the successful revitalization of most downtowns and neighborhoods in Ohio.  Tax abatement has been the only way these projects “pencil out” in untested or modest markets.

The Senate’s changes will significantly slow efforts to reinvent Ohio’s communities and put further pressure on already tight local housing markets by reducing the production of new housing.

The Greater Ohio Policy Center, encourages you to tell your Senator how these changes will negatively impact needed and desired development in your community.

From the Ohio Housing Council:

Below are highlights (not an exhaustive list), that the Ohio Housing Council is looking at regarding the substitute budget bill (HB33).  The Ohio Housing Council will be working with their partners to understand the many changes and how best to approach:

• As expected by the OHC, the Senate removed language creating a state Low-Income Housing Tax Credit Program. The OHC will push to revive this in conference.
• As expected by the OHC, the Senate removed language standardizing real estate valuation/income method for affordable housing properties.  The OHC plans to push to revive this in conference.

Items proposed by the Senate that had not been discussed with the OHC:

• Creates the Governor’s Office on Housing Transformation within the Department of Development and “moves” the Ohio Housing Finance Agency under this new office. Additionally the Tax Credit Authority must approve funding for multi-family rental housing.
• Effectively eliminates the use (for 5 years after creation) of CRA’s for all multifamily development. Similar limitations on multifamily tax exemptions in TIF Districts.
• Prohibits for a period of time rental housing from qualifying for opportunity zone investment credits.
• Expands existing prohibition on LIHTC property receiving state historic credits to any other federally subsidized rental property.
• Requires OHFA to provide an annual list of federally subsidized rental properties to multiple other agencies/county auditors. Requires the Ohio Auditor’s office to audit LIHTC developments.

The OHC is continuing to gather information and will send updates. There are particular items that the OHC will prioritize with advocacy around other items being led by other impacted groups.

The OHC will continue to walk forward with clarity on their two primary goals they believe are worthy of the Council’s time, effort and collective advocacy:  1) that a state low-income housing tax credit program will be transformational for families and seniors served; approximately 26,000 new units created by state low-income housing tax credit program; 2) the fixing/standardizing the RE valuation is of paramount importance to the long term stability of communities throughout the State.