MOUNT VERNON — A Knox Pages reader wants to know how to determine which census block your house is in and who to contact to find out about eligibility for the city's Community Reinvestment Area (CRA).
The CRA covers everything within the city limits. That means that all homes are in the CRA and are eligible.
However, the amount of tax reduction property owners receive for improving their property is different based on location. That's where the census blocks come into play.
There are six census blocks. Each block is rated based on the percentage of low- to mid-income residents. The higher the rating, the higher number of LMI residents, and thus the higher abatement.
To find out which census block your home falls under, you need to contact Sam Filkins of the Knox County Area Development Foundation at 740-393-3806. For now, at least.
The city and ADF created a Google map layer that shows in which census block a home is located.
“As soon as the state gives final approval of the CRA, the overlay will be on the city's website,” Filkins, ADF vice president, said.
The CRA does not cover all home improvements. For example, interior renovations, painting, and repairing gutters do not qualify for a tax reduction. However, significant rehab work such as building a garage or room addition or building a new home does qualify.
The work must improve your property value by at least $15,000. Improvement value is not necessarily the amount you spend on the improvements.
Filing the CRA
There is no separate process to apply for the CRA. It is included in the steps you will follow for any project that requires a building (zoning) permit.
“Property owners will simply need to complete the standard zoning permit process. Eligible projects will be flagged when sent to the Knox County auditor each year,” Lacie Blankenhorn, the city's development services manager, explained via email.
The zoning application is on the city's website under Online Services, Engineering Permits.
When applying for the permit, you must include specific information:
•Plans drawn to scale showing the dimension and shape of the lot you are building on
•The exact size and location of existing buildings on the lot, if any
•The location and dimensions of the proposed building(s) or alterations
•Setback distances from the improvement(s) to the property line
The city calculates the permit fee based on the estimated cost of the improvement(s); the fee is payable upon approval. There is no additional fee for the CRA.
Blankenhorn sends the permit information to the county auditor at the end of the year. Both Blankenhorn and Filkins will review the permits.
“The abatement is based off of the increased value, and the auditor sets the increased value,” Filkins explained. “We'll flag the ones above the minimum investment that we anticipate meeting that threshold to put them on the auditor's radar.
“The auditor does not see what's inside the house,” he added. “The auditor sees square footage, not necessarily the quality of the work.”
The appraisal process
The Knox County auditor's office will receive data from 2022 zoning permits in January 2023. Data will be flagged as tax year 2023. Because property taxes are paid a year behind, you will not see the reduction on your tax bill until 2024.
“We'll send a licensed appraiser out to the property,” County Auditor Jonette Curry said. “When we get the information, we'll flag it as a CRA.
“We do not go inside,” she continued. “We look at the square footage, type of house, whether it's new construction, deconstruction, and sales data. Construction material, whether it's moveable, what kind of base it has, and whether it has utilities, plumbing, electric — that all plays a role [in determining its value].”
As an example, Curry cited the rehab of a 1950's home.
“If you put on new siding, roofing, and windows, you're remodeling it to a 2022 market value,” she said. “It's no longer sitting there as a 1950 dwelling.”
The address determines the percentage of the abatement. Census blocks 1 through 3 (fewer low- to moderate-income residents) receive a lower abatement than projects in census blocks 6 through 10 (higher percentage of LMI).
To be considered for the CRA, the project has to be at least 50% complete.
“We will pick it up at 50% and flag it for a recheck the following year,” Curry said.
A few caveats
Curry noted that the quality of products used — such as cabinetry — does not play a role in the appraisal process. She echoed Filkins' caution that what you pay upfront for the project might not equate to what it is worth.
“[Property owners] have to understand that they might be paying X amount of dollars for the upgrade, but that's not necessarily what it will be worth,” she said. “They will still get a tax savings, but it might not be the magnitude of what they're thinking.”
Noting that property owners tend to complete improvement projects over multiple years, Filkins said they should consider timing.
“If [property owners] are doing multiple small additions to their property, they may miss out on the benefits of a CRA because if the project individually isn't above the threshold, it would not qualify,” he explained.
Filkins also pointed out that the scores for the abatement levels might adjust over time as the low- to moderate-income population changes.
“As new census data from the state trickles down, those census blocks may change color,” he said. “If the abatement level is at the highest now, it may be worth it to go ahead with planned improvements versus waiting a few years.”
Per the Ohio Revised Code, CRA legislation creates a housing council to oversee the abatements. The council is also charged with annually inspecting the property.
Any property owner who believes they should receive an abatement but is not granted one can appeal the decision to the housing council. Members of the council include:
•Two members appointed by the mayor
•Two members appointed by city council
•One member appointed by the Municipal Planning Commission
•Two members appointed collectively by the group above
The property owner can appeal the housing council's decision to the Knox County Court of Common Pleas.