Cincinnati runs a residential tax abatement program which rewards homeowners for improving their properties. Last year, a group of black homeowners in Cincinnati filed a suit in the U.S. District Court claiming that the program discriminated against black residents.
In early October of 2021, a federal judge ruled that the lawsuit can go forward.
Robert Newman is the Cincinnati attorney who filed the lawsuit on behalf of the residents. He told the Cincinnati Enquirer, “The result for neighborhoods in Cincinnati is that Caucasian neighborhoods have become more affluent, more exclusive, and more White. African American neighborhoods remain Black, and less affluent. Tax abatements have contributed substantially to this phenomenon.”
According to the suit Newman filed, the way Cincinnati hands out these tax breaks makes the city more segregated, and restrains the moneymaking potential for Cincinnati’s black residents.
The abatement currently works this way: if a homeowner spends at least $5,000 rebuilding or updating his or her home, then he or she can experience a reduction in their property taxes for 10 to 15 years. Cincinnati city records show a total of $183 million in tax abatements for 2,640 residential properties. Nearly 30% of that $183 million total went to Hyde Park – a wealthy neighborhood in which the majority of the residents are white.
The Enquirer reviewed five years’ worth of abatements, for those between 2014 and 2018. The newspaper found that Hyde Park received the most abatements, at a total of $11.7 million. Cincinnati’s largest neighborhood, Westwood, got less than a half-million dollars. Avondale and Bond Hill, large neighborhoods with predominantly Black populations, each received less than a million dollars in abatements over that five-year period.
What Caused These Unequal Payouts?
According to the lawsuit, the tax abatement program’s requirements are responsible for this disparity. The $5,000 threshold to make a homeowner qualify is problematic, as homeowners with less money have difficulty reaching that $5,000 minimum line. As a result, the lawsuit suggests, this tax abatement program causes there to be considerable differences in the amount of property taxes white Cincinnatians and black Cincinnatians pay.
Cincinnati injury lawyers generally do not deal with such lawsuits, of course. But as residents of Cincinnati, lawyers in all fields share a desire for the city to treat its citizens equally in the eyes of the law. Programs that create greater inequality should be fixed. Whether this tax abatement program requires fixing is yet to be determined, but we will continue to pay attention to this significant federal case.