Real Estate Blog

In 1972, the average home price in the United States was approximately $30,000. Fifty years later, that number broke $500,000, an increase that is, no doubt, aggravated by a 4.5 million-unit deficit in supply. State and local governments have largely failed to respond and continue erecting regulatory barriers to new residential construction. But, in 2023 the Ohio General Assembly adopted a new tax abatement program that combats the shortage with an incentive for more housing development.

Ohio law empowers real property owners, acting collectively, to petition their local board of county commissioners to annex real property out of a township and into a municipality. If the subject property is less than 500 acres, shares at least 5% of its border with the annexing municipality, and does not contain an “island” of property that would remain within the township’s jurisdiction, the board of commissioners may not reject the annexation.

On September 13, 2022 the Securities and Exchange Commission filed litigation against four separate municipal securities underwriters for failing to comply with municipal bond offering disclosure requirements.  

The Ohio House of Representatives are considering a new law to create an economic tool to assist on Ohio economic development projects.  Ohio House Bill 740, introduced in October and referred to the State and Local Government Committee in November (where it received its third hearing in December), seeks to create a state bond bank called the Economic Development Bond Bank (the “Bond Bank”). 

Ohio General Assembly House Bill 727 (“HB 727”), introduced on August 29^th, seeks to capitalize on the newly created “Opportunity Zone” program by adding a state tax incentive component.

On December 31, 2017, new Internal Revenue Code (“Code”) Sections 1400Z-1 and 1400Z-2, passed as part of the Tax Cuts and Jobs Act of 2017, became effective. These two Code sections establish the framework for the new Opportunity Zone (“O-Zone”) incentives. Generally, a gain realized from the sale or exchange of property with an unrelated person can be deferred if invested in a Qualified Opportunity Fund (an “O-Fund”) within 180 days of the sale or exchange.

The One Hundred and Thirty Second General Assembly of the Ohio Legislature has seen a number of bills introduced that innovate state and local governments’ engagement in economic development activity. In particular, three bills have been introduced that, if eventually passed, would have fairly significant impact on the Ohio economic development landscape. Those are House Bill 469, House Bill 668, and House Bill 525.

Introduction:
On December 8, 2016, the Ohio legislature passed Senate Bill 235 ("SB 235") which, among other things, adds Section 5709.52 to the Ohio Revised Code (“ORC”). Effective March 28, 2017, this section authorizes local governments to approve property tax exemptions for the increase in property value for property that is either “newly developable property” or “redevelopment property.”  These terms essentially mean that as to a parcel of property, no commercial, industrial or agricultural operations are currently taking place on the property and that construction or reconstruction of a commercial or industrial building(s) is planned, but a certificate of occupancy has not yet been issued.

During this pre-development phase, the property tax exemption provided by SB 235 effectively freezes the taxable value in place during the exemption term until a certificate of occupancy is issued or upon the occurrence of other circumstances, as discussed below.

On December 8, 2016 the Ohio Senate passed House Bill (“HB”) 463. HB 463 in part amends Ohio Revised Code (“ORC”) Chapter 3735, which governs Community Reinvestment Area tax exemptions (a “CRA”).