OHIO NEEDS TO ADDRESS HOUSING CRISIS Dave Robinson, Principal, Montrose Group, LLC
Housing is a major policy issue in 2024 as rising interest rates impact the development of housing that has struggled to keep pace with increasing economic investment. Recently, the Montrose Group developed an Ohio Housing Policy White Paper on behalf of the Business & Industry Association (BIA) of Central Ohio to define the challenges and opportunities for how state government can spur housing investments and hosted a housing roundtable discussion at the Ohio Chamber of Commerce on January 31, 2024. Ohio, like many other states suffers from a lack of housing supply that is driving up costs for residents across the state. Growing markets like Cen- tral Ohio need 18,000 new houses but are only creating 13,000 new homes annually, driving up housing costs with listing price increases higher than Austin, Nashville, and Charlotte. Rural Ohio counties are experiencing a -2.4% population decline creating challenges in recruiting housing even though they lead the state in manu- facturing jobs. Central Ohio is driving Ohio’s economic growth with a 17% population growth rate but is not keeping up with Southern competi- tors and their population growth has slowed in recent years due to a lack of housing supply. Ohio’s GDP grow- th over the last decade is over 10% behind Tennessee, North Carolina, and Texas. From a demographic and economic standpoint, Ohio is growing but battling Southern states for econo- mic supremacy. Ohio lacks a strong regulatory fra- mework to encourage housing invest- ment. Ohio’s property tax rates are almost double the rates of Indiana, North Carolina, and Tennessee, and Columbus’s effective property tax rate is higher than in Indianapolis, Nash- ville, and Charlotte. Ohio is among a minority of states to have townships and permit them to regulate zoning and permit zoning referendums. Ohio has local economic development in- centives for housing and created new housing programs to spur housing development.
As part of a BIA of Central Ohio Foundation study, the Montrose Group created a recommended state of Ohio public policy agenda. Ohio needs to continue to engage state leadership in the housing de- bate. Ohio should establish the Go- vernor’s Housing Council consisting of housing developers, local govern- ment, business, and community lea- ders to advise the Governor on how Ohio can meet the current housing crisis, establish housing is a matter of statewide concern, adopt a com- prehensive strategy for the develop- ment of housing in rural, suburban and urban communities, and host an annual Governor’s Housing Summit. Continued state funding is a part of the solution for the development of additional housing. Money is not the total answer to spur more housing development, but it cannot hurt. • Ohio should renew the Transfor- mational Mixed Use District Program and increase the tax credit spending cap to $400 M annually. • Ohio should expand the Ohio New Markets Tax Credit Program to $50 M and focus it on residential develop- ment to compete with Indiana which has a $100 M NMTC program. • Ohio should expand the Ohio His- toric Preservation Tax Credit Program to $50 M and focus the benefits of this program on residential development. • Ohio should create a $50M Ohio Rural Residential Development Loan program to provide forgivable loans to developers creating housing deve- lopment in rural Ohio counties. Local housing tax incentive reform is needed to spur housing growth. Ohio should create a 100%, 15-year property residential tax abatement program without requiring local school board approval as done in Indiana, expand the authority of local Tax Increment Financing programs to directly fund housing development, and not require school board appro- val as done in Indiana. Reforming local land use regula- tions is essential for growing the Ohio
housing supply. Ohio should permit residential development as a matter of right that meets density, setback, parking, and other restrictions to be located with only an architectural review by local governments for sites that are currently zoned for commer- cial, office, retail, and industrial to transform dead strip malls into resi- dential development as done in Cali- fornia and Florida. Ohio should get non-Limited Home Rule townships out of the zoning business but regula- te zoning standards at the state go- vernment or county level for land in small townships and eliminate zoning referendums to build a predictable land use model as is done in Indiana, North Carolina, Texas, and twenty- -two total U.S. states. Ohio should create a state Zoning Density Bonus Infrastructure Program to fund public infrastructure for local governmen- ts for residential developments that meet zoning density and multi-family requirements. Continuing to build a predictable property tax appraisal process im- pacts housing investments. high rate of property tax and unpredictable property tax appraisal process need to be reformed. Ohio needs to conti- nue efforts to streamline the property value appraisal process to build a more predictable process to encoura- ge economic investment by limiting property tax appeals to only property owners, not disclosing the value of the land purchase, and exempting from property tax the value of unim- proved land subdivided for residen- tial development more than the fair market value of the property for up to eight years or until construction begins or the land is sold. Dave Robinson is a former member Ohio Chamber of Commerce Gene- ral Counsel, a member of the Ohio Chamber of Commerce Board of Di- rectors, and a former member of the Ohio House of Representatives, and, for fifteen years has led the Montrose Group, LLC, a Columbus, Ohio based economic development and public policy advocacy firm.
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