Study Shows Short North Developers Don't Need Generous Tax Incentives

Jul 20, 2017

Earlier this year, the city of Columbus commissioned a study on the use of tax incentives in four different neighborhoods: the Short North, Linden, Near Eastside, and the Hilltop. Researchers found that in the Short North, generous tax abatements were not necessary to spur certain types of residential development.

On the flip side, the study found that the Hilltop, Near Eastside and Linden required abatements plus additional subsidies. Slow economic growth and the low cost of rent in these areas makes it harder to attract market rate developments.

Department of Development director Steve Schoeny says once the research is complete, it will be used to create more effective tax incentives policy.

Schoeny says they want a system that’s strategic and designed to spur economic development in all neighborhoods. Their current system has evolved over many years to solve individual problems.   

While the Short North may not require as many tax incentives as previously thought, Schoeny says more economically robust areas may still require assistance to maintain progress.

“The balancing act is, how do we keep the momentum and the strength of those areas that are doing well, while making it more attractive to do projects in these other areas?” Schoeny says.  

Clarence Mingo, Franklin County's auditor, commissioned an independent study earlier this year that also looked at tax incentives. What that study found, Mingo says, is it’s unclear whether tax abatements—like the $68 million recently granted for development at Easton Town Center—benefit Columbus residents.   

“There’s not, to date, evidence of significant gain or significant benefits on behalf of tax payers because these abatements have been allowed,” Mingo says.  

Mingo says the city has taken a step in the right direction to objectively study how they use tax incentives.