Community Reinvestment Area

CRA Frequently Asked Questions

Program Basics

What is a CRA?

A Community Reinvestment Area (CRA) is a common economic development tool that provides an incentive for property owners to improve their property through an addition or building a new home.  The incentive works by giving an abatement (reduction) of the taxes owed on the improvements made to the property. Simply put, the owner would have less taxes to pay. For example, if a property owner adds a $20,000 addition to their house, that would typically add about $300 in property taxes annually, but with a CRA, that amount can be abated, saving the homeowner money.  These savings make improvements more affordable and provide an incentive to do projects that otherwise would not have happened.

 Important Considerations:

  1. The owner will always pay the original tax value. The only reduced value is on the value of the improvements.
  2. CRAs aren’t permanent and can be written to be re-evaluated at regular intervals.
Why do we need a CRA?

Mount Vernon has a severe shortage of housing for all income levels.  The lack of available, affordable, quality housing hinders growth and impacts workforce availability and government tax receipts. This issue has infiltrated many aspects of life in Mount Vernon and needs a proactive solution. This shortage mostly likely affects the schools as well. Without quality affordable housing, employees will find a residence in other towns, preventing the putting down of roots, paying local taxes, and becoming more invested in the local community. In addition, rising costs of labor and materials have priced many potential property owners out of the market. CRAs encourage more home building 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.

What properties are included in the program?

While cities can use a CRA to incentivize many different construction projects, the proposed program is built only to incentivize the development that fits the community’s needs. For example, Mount Vernon needs multifamily developments, single-family homes on infill lots, renovations or additions on existing residential buildings, and renovation of historic homes. In addition, the program is scaled based on census block data, so the neighborhoods with the lowest income get the highest abatement rates.

How long will the program last?

A CRA was created by city ordinance and can be revoked at any time.  The vision for this program is that it would be evaluated and reauthorized every five years by the City Council.  Using five-year increments will allow enough time to judge the program’s effectiveness and make necessary adjustments.

Does this program exist in other places?

At least 23 other communities in Ohio offer large city-wide CRA programs.  A survey was sent to all of the communities, and the overwhelming response was that the program did move the needle on addressing the housing shortage and aging housing stock. In addition, the responses indicated that the CRA achieved the goals without adding significant extra work.

How many projects, new builds, or renovations should we expect to happen with this program?

Based on the survey results from the other communities with similar programs, Mount Vernon should anticipate between 4-8 projects a year. The CRA is not a silver bullet, but it is one tool that can help encourage new growth.  At that rate of progress, the program will more than double the three-year average of new homes in Mount Vernon without having an enormous impact on agencies that benefit from the property tax collection.

Impact of the Program on Mount Vernon City Schools

How will the local schools benefit from this program?
  1. Increased property values citywide – Strong schools and strong communities go hand in hand.  With this program, the property values around the city will go up as older homes are renovated, and new homes are built. This increase will be realized by both the abated home and the surrounding area. In addition, once the abatement period is over for these projects, the school system receives its full share of property tax improvement. It is important to remember that the improvements/construction would not have happened without this program, and the schools wouldn’t realize any increased collections on any properties.
  2. With more housing comes more retail and commercial activity. An increase in commercial activity will result in an increase in tax receipts for the local schools. The old concept of “retail follows rooftops” certainly applies.
  3. The school district needs housing for its employees. With the turnover in educators around the state, the local schools will likely see an increase in new employees. Ideally, new staff will be able to live within the district’s boundaries. Employees that live locally result in higher employee retention and engagement with the school district. This program incentivizes more housing development locally, which can provide homes for new staff.
What are the costs to schools?

There will be no impact on the funds currently collected by the school district.  This program only applies to improved value after additions or new construction and is scaled to offer the most incentive in the neighborhoods with the most need. This program only applies to property within the city limits. Any property outside of the city would not be affected.

Impact of the Program on the Community

How will the community benefit from this program?
  1. Aside from the benefit to the property owner, the community will benefit from this program.  The improvement of housing stock in the city will increase property values for surrounding residents.
  2. The local economy is grinding through a workforce shortage that we have never seen.  To entice new high-paying jobs to the area, like the ones that would fill Cooper Progress Park, Knox County needs to have an available workforce.
  3. Lastly, “retail follows rooftops,” if folks want to see more restaurants and shopping options, the population needs to be able to support it.  So this program could create economic growth while maintaining affordability for homeowners.


Samantha Scoles

Mike Hillier

John Yoder

Tonja Kent

Erin Humphrey