Members may recall last year’s SB235, which as introduced would have provided an automatic freeze on the value of real property slated for commercial development until certain triggers occurred. HB 371, introduced in the House October 4, is surprisingly similar to last year’s SB 235 but instead applies to property slated for residential development.
The bill would change the way residential development property is valued by exempting any increase in taxable value on land slated for residential development from the year before it is subdivided until the earlier of either: 1. construction of a residential building begins or 2. title to the property is transferred for consideration. The exemption would apply to any subdivided, unimproved parcel on which construction of residential buildings is planned but has not yet started. The bills specifies that residential construction is not deemed to have begun solely because streets, sidewalks, curbs, driveways or water, sewer or other utility lines were constructed or installed. If a parcel is transferred without payment, the exemption continues. Like last year’s as-introduced SB 235, the bill does not contain any provision for local government input or approval. Concerns have been expressed regarding the expected loss of tax revenues to school districts and other local taxing entities.
A second hearing with proponent testimony on the bill occurred October 31. The Ohio Home Builders Association testified that new housing starts in Ohio have declined over a 20 year period and that the bill will provide incentives for home-building. The Building Industry Association of Central Ohio testified that the current taxing system adds cost to residential structures which increases the challenge of housing affordability.
OEDA members are encouraged to review the legislation to learn more about HB 371. The Legislative Service Commission also has a Bill Analysis and a Fiscal Note and Local Impact Statement that may be helpful. Concerns can be discussed with your local legislator. Members wishing to submit written testimony or testify in person regarding the bill should contact OEDA Executive Director Jennifer Price at jprice@ohioeda.com for more information.