Frequently Asked Questions

A Community Reinvestment Area (CRA) is a common economic development tool that provides an incentive for property owners to improve their property through an addition or building a new home. The incentive works by giving an abatement (reduction) of the taxes owed on the improvements made to the property. Simply put, the owner would have less taxes to pay. For example, if a property owner adds a $20,000 addition to their house, that would typically add about $300 in property taxes annually, but with a CRA, that amount can be abated, saving the homeowner money. These savings make improvements more affordable and provide an incentive to do projects that otherwise would not have happened.

Important Considerations:

• The owner will always pay the original tax value. The only reduced value is on the value of the improvements.
• CRAs aren't permanent and can be written to be re-evaluated at regular intervals.

Mount Vernon has a severe shortage of housing for all income levels. The lack of available, affordable, quality housing hinders growth and impacts workforce availability and government tax receipts. This issue has infiltrated many aspects of life in Mount Vernon and needs a proactive solution. This shortage mostly likely affects the schools as well. Without quality affordable housing, employees will find a residence in other towns, preventing the putting down of roots, paying local taxes, and becoming more invested in the local community. In addition, rising costs of labor and materials have priced many potential property owners out of the market. CRAs encourage more home building while maintaining affordability. This is crucial when trying to attract more residents.  It can also encourage improvements to the current aging housing stock, which increase property values of the home and neighborhood.

While cities can use a CRA to incentivize many different construction projects, the proposed program is built only to incentivize the development that fits the community’s needs. For example, Mount Vernon needs multifamily developments, single-family homes on infill lots, renovations or additions on existing residential buildings, and renovation of historic homes. In addition, the program is scaled based on census block data, so the neighborhoods with the lowest income get the highest abatement rates.

A CRA was created by city ordinance and can be revoked at any time.  The vision for this program is that it would be evaluated and reauthorized every five years by the City Council.  Using five-year increments will allow enough time to judge the program’s effectiveness and make necessary adjustments.

At least 23 other communities in Ohio offer large city-wide CRA programs.  A survey was sent to all of the communities, and the overwhelming response was that the program did move the needle on addressing the housing shortage and aging housing stock. In addition, the responses indicated that the CRA achieved the goals without adding significant extra work.

Based on the survey results from the other communities with similar programs, Mount Vernon should anticipate between 4-8 projects a year. The CRA is not a silver bullet, but it is one tool that can help encourage new growth.  At that rate of progress, the program will more than double the three-year average of new homes in Mount Vernon without having an enormous impact on agencies that benefit from the property tax collection.