Plain Dealer associate editor Joe Frolik doubts that setting up different tax abatement terms based on the health of a neighborhood's market can survive the politics it would take to get it done.

Trying to re-tool Cleveland's system now that its been running in order to target areas or reduce the level of abatement may be difficult, but certainly not impossible. Many cities have target areas or designated zones for tax abatements or a sliding scale of years.

• Fort Wayne designates certain parcels of land as Economic Revitalization Areas (ERA's). 
• In Houston, Texas, residential tax abatement can only happen in Enterprise Zones, which is any census block group in which the poverty level is 20% or higher and the median sale price doesn’t exceed $146,000 (or 10% above the median sales price in the area).
• Detroit has tried a different set up with its Neighborhood Enterprise Zones, areas in the city where developers can apply for a 50 percent tax abatement.
• Washington, DC has a $5,000 federal income tax credit for first-time homebuyers who purchase a home in certain areas of the District. It's a one-shot deal—you get the credit the year you buy the house. And if your income exceeds a certain limit ($130,000 for a married couple), you don't get the credit.

In Cleveland, neighborhoods like Ohio City, where north of Lorain Avenue and east of W. 45^th the average home price approaches $150,000 and south of Lorain is far below that, could be a test market for Enterprise Zones. Setting a standard based on hitting a ceiling in value may be more insulated from politics because no one area is branded a loser.

Questions to be explored: 

• Are there census blocks, or whole neighborhoods, in Cleveland where tax abatements have sufficiently improved the market to consider amending the incentive?
• What is the appropriate level of improvement to determine changing or removing tax abatement?
• Is there an example of a city that has amended its tax abatement policy by reducing the number of years, adding a phase-out, or changing to target zones? (Philadelphia, PA is in the midst of its own debate on whether to mend or end its 10-year tax abatement. See articles below).

Resources:

• Texas Property Tax Code establishing tax abatement in a county reinvestment zone
• Philadelphia Inquirer Op-Ed: Amend home-development abatement rule
• Philadelphia Biz Journal: Backers eye future of housing policy
• Philly.com: Nothing unfair about tax abatements