Strategies to Minimize Displacement
Tax Abatement
Introduction
Brownelds—or properties with environmental contamination or potentially
contaminated land—are disproportionately located in or near communities of
color and low-income communities. Residents near these properties may face
heightened health hazards and economic disinvestment until the site undergoes
assessment and cleanup, which can be a costly and lengthy process.
Safely reusing a browneld site is an opportunity to improve community health and
bring in new amenities. However, browneld redevelopment can also exacerbate
affordability and displacement concerns. As costs rise and it becomes more
expensive to live in a community, lower income residents and small businesses are
often displaced. Strong, early community engagement in the brownelds reuse
process presents an opportunity for the community to have a meaningful role and
input on how to minimize displacement through the cleanup and reuse process.
Community leaders, stakeholders, and practitioners can be proactive and put
strategies in place to minimize the risk of displacement. These strategies take time,
resources, and political will to implement, and they are most effective if put into
place before displacement is already occurring.
Tool: Tax abatement
Tax abatements are nancial programs designed to ease property taxes for developers and low- and moderate-income
homebuyers, particularly in locations that are experiencing increasing property taxes due to rising property values. Abatement
programs lower taxes for property owners or developers for construction of new homes or rehabilitation projects on existing
homes over a certain number of years.
For long-time residents in areas which have seen signicant growth and development, increased property taxes and increased
monthly costs may present a major barrier to staying in a family home. In order to qualify for a tax abatement, applicants
to the program must t at a certain income threshold, which is determined by the jurisdiction. Tax abatement programs are
administered at the town, city, or county level and vary in the tax percent reduction or abatement time depending on the
jurisdiction that oversees the program.
For tax abatement policies that encourage the rehabilitation of existing homes, homeowners can receive a 100% reduction of tax
from undergoing the rehabilitation project (meaning they only pay the taxed amount of the value of the home pre-restoration),
while other policies reduce this cost by 50% for a certain number of years. For new construction, the property owner would
receive a tax deduction based on the payment made to acquire the property.
New homes in the Glenville neighborhood of
Cleveland, Ohio. Image credit: Ideastream
Public Media.
Developed in partnership with EPA’s Ofce of Brownelds and Land
Revitalization (5105T) EPA 560-F-23-011 | March 2023.
Benet: Maintain housing
aordability for current
residents
Problem addressed: Rising real
estate values, increased
property taxes
Scale of Impact: Individual
homeowners
Administrated by: Jurisdicon’s
oce of community
development or economic
development
Tips for Success
In some jurisdictions, energy efciency and efforts to address the impacts of
climate change have been enveloped into tax abatement programs. For example,
rehabilitation projects or new developments which satisfy LEED or other
environmental certications qualify for extended duration periods of abatement or
even lower tax rates.
Some cities have enveloped tax abatement programs into larger, long-term
programs and initiatives, such as the Community Reinvestment Act (CRA)
in Cincinnati, OH, which aims to build equity and reduce displacement for
homeowners in disadvantaged areas by lowering construction and
development costs.
Tax abatement programs should not be static; they should be revisited and
changed to account for economic shifts or changes in market conditions. Some
cities and towns also introduce tax abatement programs specically for rst-time
homebuyers, veterans, and senior citizens in order to incorporate equity priorities
and expand pathways to homeownership for disadvantaged or economically
vulnerable residents in a community.
Where to start
Tax abatement programs can be supported by a community’s quantitative data on
residential property costs and trends across areas of the community. Determining
if tax abatement programs are a useful and appropriate strategy should include
engaging with local community development and housing ofces to obtain trends
and data on residential home values, transactions, and other models that show
patterns of displacement. With this information, communities can identify which
areas of the community tax abatement programs may be most effective. Capacity-
building and staff bandwidth to undertake such programs is necessary for the
creation and administration of such programs. Learn more about tax abatement with Local Housing Solutions’ resource, which
highlights referential case studies nationally and an important overview of tax abatement programs.
Case Study
The City of Cleveland, OH has a residential tax abatement program which eliminates 100% of tax associated with new
developments and remodeling projects for 15 years. If a homeowner undergoes a rehabilitation or improvement project on
their home and receives tax abatement from the City of Cleveland, they would only pay the amount of taxes attributed to
the home’s value before renovation. Cleveland’s tax abatement program not only encourages homeowners to undergo these
projects, but also preserves affordability by eliminating tax increases they would owe with the increased property value from the
improvements.
Staff from the City of Cleveland’s tax abatement program noted that public education and the awareness of these programs
should be prioritized moving forward. In 2020, the City published a comprehensive study which analyzed the effects of the tax
abatement program and offered recommendations for future improvements of the program, which included linking community
benets agreements with abatement policies, embarking on coordinated initiatives to increase transparency of the program, and
incentivizing green infrastructure through clauses in the tax abatement program. Read the report here.
Links to external, non-EPA resources are provided for informational purposes only. References to external resources do not constitute
an endorsement by EPA, and EPA does not take any responsibility for their content.
Developed in partnership with EPA’s Ofce of Brownelds and Land
Revitalization (5105T) EPA 560-F-23-011 | March 2023.
Questions to
Ask in the
Planning Process
• How has neighborhood change
impacted the monthly costs
for long-term residents in your
community?
• How can the community be
engaged to collect information
about the potential impacts of
tax abatement?
• Are there community or
regional organizations that
track information about tax
burden, increased taxes due
to improvements, or other
relevant information? Do these
groups consider minimizing
displacement as a primary goal?
• What resources or
communication channels does
your government or economic
agency use to raise awareness
about accessing and utilizing
tax abatement programs?
