Community Re-Investment Area (CRA) – Aragon – Oak Park Neighborhood

Kettering’s New Community Reinvestment Area (CRA):

A Tool for Homeowners in the Aragon-Oak Park Neighborhood

On March 28, 2023, Kettering City Council passed a resolution creating a Community Reinvestment Area (CRA). CRAs are designated neighborhoods where property owners can receive tax incentives for investing in real property improvements. CRA programs are designed to spur reinvestment of existing housing stock and encourage new residential development to revitalize neighborhoods. Eligible property owners who renovate existing properties or construct new buildings can receive a direct incentive tax exemption on real property. In Kettering, the incentive is only available to owner-occupied homes.

Although a CRA is a common economic and community development tool in other Ohio cities, this is the first approved by the Kettering City Council and will be implemented in the Aragon-Oak Park Neighborhood as a pilot program.

Under Kettering’s program, single family residential units and duplexes located within the CRA shall be eligible for the real property tax exemptions of 10 years and 75% exemption for remodeling or demolition and new construction if:

The single-family residence or one unit of a duplex is occupied by the owner, and
The remodeling or demolition with new construction costs are $20,000 or more.

Additional City of Kettering CRA ResourcesClick here for CRA information presented at the November 29 meeting hosted by the City of Kettering.

Click here for a map of the neighborhoods currently eligible for the CRA program.
Click here for the Ohio Department of Development’s website on the CRA Program.
Click here for the City of Kettering CRA application.

Frequently Asked Questions:

What is a CRA?

CRA stands for “Community Reinvestment Area”. A CRA is a common economic development tool used by Ohio cities to provide an incentive for property owners to improve their property, usually through an addition or by building or remodeling a home. The incentive works by providing abatement (reduction) of the taxes owed on the increase in property value caused by the improvements made to the property. Simply put, the owner will pay less in property taxes for improvements made to their property.

For example, if a property owner adds onto their house, such an addition would typically increase their annual property taxes by increasing the value of their property. With a CRA, that increase in value can be abated by a certain percentage saving the property owner money. These tax savings accrue over time and can make property improvements more affordable. CRAs can incentivize homeowners to do projects they may otherwise not have done.

Important Considerations:

The owner will always pay the original tax value of their property. The reduced value is only applied to the value of the improvements.
CRAs aren’t permanent and can be written to be re-evaluated at regular intervals.

Does this program exist in other communities?

Yes, According to the Ohio Department of Development, there are numerous CRAs in communities across Ohio.

Why does the City of Kettering need a CRA?

Kettering has a shortage of housing for all income levels. The lack of available, affordable, quality housing hinders growth and impacts workforce availability for businesses. In addition, some neighborhoods in Kettering have experienced blighting influences due to the age of the neighborhoods and the inefficient construction styles from the time they were built. The intent of the CRA is to encourage reinvestment in these properties.

Who benefits from a CRA?

In Kettering, it will be the property owners in the Aragon-Oak Park neighborhood. The Community Reinvestment Area (CRA) Program is a direct incentive tax exemption program benefiting property owners who renovate existing or construct new buildings.

Why did Kettering choose the Aragon-Oak Park neighborhood for its first CRA?

The Aragon-Oak Park neighborhood was chosen to be the City’s first program because SOME parcels are in need of redevelopment and reinvestment. This neighborhood is older (with most homes being built prior to the 1960s), and the median home values are lower than the city average. The CRA was seen as a way to help homeowners who want to make major investments into their properties.

Why do developers and homeowners typically request CRAs?

Rising costs of labor and materials have priced many potential property owners out of the market. CRAs encourage new home building and reinvestment in existing homes while maintaining affordability. This is crucial when trying to attract more residents. It can also encourage improvements to the current aging housing stock, which increase property values of the home and neighborhood.

Do CRA abatements impact schools?

In the short term, yes. Public schools ultimately receive less property taxes for improvements that are made. For this reason, Kettering’s City leaders met with representatives from Kettering City Schools to inform them of this program prior to passage by City Council. School leadership was supportive of the effort. It is anticipated that over the long term, CRAs will encourage reinvestment and elevate property values, bringing more tax revenue to Kettering City Schools over time. In addition, the abatements do not last forever, so once the abatement period ends, the public schools will begin receiving their full property tax payments.

How does the application program work?

Download the application here. Once completed, you will send the application to Angela Rahman, the City’s Community Development Manager. Ms. Rahman will work with City staff to ensure that the improvements you listed on the application were completed, and if so, will forward your application to the Montgomery County Auditor’s Office which will note the abatement on your tax records. You should see savings on your next property tax invoice.

What is Kettering’s abatement level and term?

The CRA, passed by Kettering City Council, grants a 75% abatement on new valuation over 10 years if the improvement is valued at $20,000 or more. Keep in mind, the applicant’s base property tax rate will stay the same; but, property taxes on any new valuation of your property from the improvement will be reduced by 75% over 10 years. After 10 years, your property taxes will increase in relation to the value of your property at that time.

What qualifies for the abatement?

Not all home improvements will qualify for abatement. Improvements must increase the residential property’s assessed value by at least $20,000. This value is determined by a reassessment of the property by the Montgomery County Auditor once the project is completed.

Improvements that MAY qualify for Tax Abatement

Building a new porch
Adding a garage
Remodeling an attic into living space
Installing a sun room
New additions to the structure
New construction
Structural improvements
Complete rehabs

Improvements that likely will not qualify for a tax abatement

Interior or exterior paint
Landscaping or outdoor lighting
General repair of steps, railing, siding or gutters
New roof or windows
Remodeling kitchen or bathrooms
Install, repair or replace a driveway or sidewalk
Interior work (electrical, plumbing, mechanicals, flooring)

Does the overall city benefit from the CRA?

Yes. Aside from the benefits to individual property owners, the city also benefits from this program. The improvement of housing stock in the city will increase property values overall. Also, the local economy is facing a workforce shortage. To entice new high-paying jobs to the area, Kettering needs to have an array of quality and affordable housing. Higher property values translate to more and better amenities in Kettering.

How do I learn more?

To help residents better understand the program and the process to apply, City staff will host a community meeting for residents of the Aragon-Oak Park neighborhood on Wednesday, November 29, from 6 to 7:30 p.m., at the Charles I. Lathrem Center. City staff will make a presentation and be available for questions. Information will also be provided on other housing rehab programs available to city residents during this meeting.

Please contact the City’s Economic Development office at 937-296-3342 with questions.