Tucked between the Little Cuyahoga River and scenic cliff, a sign beckons Akronites to come home.
“A great place to live along the Towpath Trail,” it reads. Beyond it, two houses stand like lonely sentinels at the frontier of a development off Hickory Street. White flowers blossom on rows of dogwood trees. A winding road connects fire hydrants and electrical boxes, each with an address but no mailbox.
Hickory Ridge, as it’s called, has everything a family might want. Fresh air. Kempt lawns. Level sidewalks. Stonework setting off a nearby bike and hike trail. Akron’s only dog park across the street.
But there’s one thing missing: homes. The only two were built by a developer in 2005. No one bought them. And no builder cared to finish the development.
“But we’re not afraid to go where other builders are not,” said Lisa Saffle, sales and marketing director with Zaremba Homes.
What’s emboldened this Cleveland home builder are big tax breaks for new homes, a plan Mayor Dan Horrigan’s city planners and developers will detail before council on Monday.
Saffle, who lives in Highland Square, calls herself a “cheerleader” for making Akron a marketable place for housing builders and buyers. Her company has no track record in Akron. But with the promise of tax incentives and a city-guided tour, Zaremba Homes would like to finish Hickory Ridge, build homes where old Simon Perkins Middle School now stands and maybe flats with rear-access garages on South Portage Street.
Saffle considers whether her colleagues would have toured Akron without the prospect of tax abatements. “Probably not,” she said. “And the reason being that we are somewhat experts on doing this in Cleveland, and the single most effective tool in growing population is through that tax abatement — exclamation point times three.”
Full-throttle incentives
An effort to boost the marketability of Akron’s depressed housing stock, the tax abatements would forgive property taxes on new home construction and residential improvements.
Other cities, including Cleveland, have deployed these development-spurring incentives, but not as robustly as Akron is planning. Like Cleveland, Akron must stay within the limits the state has set. But in the three areas where Horrigan can step on the gas, he has.
His proposal, which council will debate over the next week or two, calls for abatements that cover the entire city (not just targeted areas) and last 15 years (the maximum allowed) and forgive taxes on 100 percent of the increased value (as opposed to a smaller portion in other communities).
Horrigan initially said he was leaning toward 10-year abatements. He’s since heeded the advice of his planning department, which advocated for the 15-year forgiveness.
“Akron’s housing market needs a jolt to the system,” Horrigan said. “If we are truly serious about growing Akron’s population again — and believe me, I am — we have to be willing to take bold, meaningful action.
“This is not a time to be timid or reserved.”
Early success
The tax incentives have attracted big developers.
Joel Testa and David Brennan, among Akron’s biggest names in real estate, are remodeling and reopening the Akron City Center Hotel, calling the abatements “a big reason” for the project.
Zaremba Homes has used Cleveland’s tax breaks to build more than 600 homes, often in ungated developments that blend with the surrounding community.
Saffle said Zaremba Homes could break ground on the shovel-ready Hickory Ridge this fall if the tax abatement plan becomes law.
The excitement comes from the potential for higher profit margins and lower risks. New homes would be marketed to buyers as nearly property-tax free for 15 years (taxes would still be charged on the land).
“We have built in places in Cleveland that weren’t very sexy and even the neighborhoods didn’t think it would happen, but the prices continue to elevate,’’ Saffle said.
Balancing values
City Council is largely receptive to the tax abatements, which historically have been reserved for commercial property owners.
But some talk of a downside to climbing home values. While the owner of the new or improved home gets a break on their tax bill, neighbors may see their home values and tax bills increase, too, but with no relief.
“We have to find a way to do this so we don’t hurt Mrs. Jones who’s lived next door [to the new development] for 30 years,” said Councilman Russ Neal, who added that he has yet to talk to the mayor about the plan.
With housing reports that show average home values below $9,000 in some neighborhoods, Horrigan and his planners are advocating for the broadest and most liberal implementation of residential tax incentives.
“All of our neighborhoods deserve an opportunity for fresh investment …,” Horrigan said. “And because taxable property values will remain the same or increase during this program, we aren’t talking about any lost revenue, only added opportunity.”
Doug Livingston can be reached at 330-996-3792 or dlivingston@thebeaconjournal.com.