Articles / 07.09.2015

Ohio Sustainable Development Incentives: Three Cities, Three Strategies

Authored by: David M. Scott

Cincinnati just became the first and only city in Ohio to offer tax incentives for projects that obtain Living Building Challenge certification. This watershed moment inspired Ohio Green Building Law to revisit sustainable development incentives offered by Ohio’s three major cities.

Cincinnati: Queen Green Still Setting the Pace

Back in 2007, Cincinnati passed Ohio’s most comprehensive and aggressive program to incentivize sustainable development. City Ordinance No. 446-2007 allowed for a 100% abatement of taxes for 15 years for new construction of commercial and residential properties that achieve LEED certification, a 100% abatement for 12 years for any renovation of existing commercial space and residential apartment complexes that achieve LEED certification, and a 100% abatement for 10 years for any remodeled 1-3 unit family residential property that achieves LEED certification. The following chart offers a nice snapshot:

Renovation – Residential
(4+ units)
Renovation – Commercial/Industrial/
Mixed Use
New Construction – Residential
(4+ units)
New Construction – Commerical/Industrial/
Mixed Use
Non-LEED 8 years 12 years 8 years 15 years
LEED Certified 8 years 12 years 8 years 15 years
LEED Silver 12 years 12 years 15 years 15 years
LEED Gold 12 years 12 years 15 years 15 years
LEED Platinum 12 years 12 years 15 years 15 years

http://energy.gov/savings/city-cincinnati-property-tax-abatement-green-buildings

Now Cincinnati has raised the bar by offering incentives to projects that are certified by the Living Building Challenge, arguably the world’s most vigorous and comprehensive building certification program. The LBC actually describes itself as a “building certification program, advocacy tool and philosophy,” and it is comprised of seven performance categories called Petals: Place, Water, Energy, Health & Happiness, Materials, Equity and Beauty. Rather than relying on performance models, Projects can only be certified as “Living” if they prove to meet all of the program requirements after twelve months of continued operations and full occupancy.

Passed on May 28, 2015, City of Cincinnati Ordinance No.134-2015 provides that new construction and remodeling projects attaining LBC Net-Zero can receive a 100% tax abatement of up to $562,000 of the market improved value, while those attaining LBC Petal or Full certification have no cap. The new ordinance would not alter existing incentives for LEED projects.

Columbus: The Green Fund

Since September 2010, the Capital City has been incentivizing sustainable development through the Green Columbus Fund. Available to private businesses and non-profits, the GCF is a reimbursement grant program that uses financial incentives to encourage sustainable development and redevelopment in Columbus. The Fund’s purpose is twofold: (1) support brownfield redevelopment; and (2) incentivize LEED certification for buildings, especially those located within the city’s urban core (defined as the 1950 border).

Cleveland: Residential Focus

Cleveland offers sustainable development incentives targeted to residential projects. Its Residential Tax Abatement program is the temporary elimination of 100% of the increase in real estate property tax for eligible projects. Available to stimulate investment in new development or redevelopment in the City of Cleveland, the length or term of abatement varies from 10 to 15 years depending on type of project. Eligible developments may qualify as follows:

  • New construction of single-family homes or multifamily investor-owned properties (15 years);
  • Conversion of nonresidential buildings to residential units (10 years or 12 years for 3 or more units);
  • Rehabilitation of existing one and two-family homes which increases market value (10 years);
  • Rehabilitation of multifamily (three or more units) structures costing over $15,000 per unit or $500,000 total (12 years);
  • Improvements, costing over $2,500, of one and two-family homes that increase the assessed value of the property (10 years).

Residents and developers seeking a tax abatement must meet Cleveland Green Building Standards found in the Cleveland Green Building Standard Handbook. Applicants must select a Compliance Method: Enterprise Green Communities Criteria, National Green Building Standard established by the NAHB, or LEED (Silver) Certification.

Additional information on Ohio’s sustainability and renewable energy incentives, credits, rebates, loans, grants and more are available at Green Building and DSIRE.