Affordable housing: Cincinnati city council votes no on earnings tax hike

Affordable housing: Cincinnati city council votes no on earnings tax hike

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CINCINNATI — A proposed charter amendment that would have raised Cincinnati earnings tax by 0.1% to generate millions of dollars for affordable housing will not end up on the local ballot.

On Wednesday, city council voted 7-2 against the Cincinnati Affordable Housing Levy. It needed six “yes” votes to make it to the November ballot.

The proposal would have raised Cincinnati’s earnings tax — a tax paid by anyone who lives or works in the city – from 1.8% to 1.9%. Seelbach said on average, a person under the plan would pay an extra $3.50 in earnings tax each month.

Council Member Chris Seelbach, the plan’s author, expected it to generate approximately $170 million for affordable housing over nine years. Voters would then have the option to renew it.

Money raised from the increase would go to the city’s Affordable Housing Trust Fund. Those funds can only go toward building, developing or maintaining affordable units in Cincinnati.

A 2020 study from the “Housing our Future” steering committee estimated the region is short 40,000 affordable units. They recommended adding at least 20,000 units over the next 10 years.

“There’s nothing radical about this,” Seelbach said. “It’s simple… It asks voters for a price of a cup of coffee a month. Do you want to make transformational changes to affordable housing?”

Seelbach and Council member Jan-Michele Lemon Kearney were the two yes votes. Everyone else voted “No,” including Council Member Wendell Young who voted for it earlier this week during committee.

Housing advocate Margaret Fox voiced her support for the charter amendment plan prior to Wednesday’s meeting. She’s “disappointed though not surprised in the vote.”

“Affordable housing advocates know from studies and experience over the last 30 years, including current housing reports, that the regional chamber (of commerce) and corporate community will make sure that market-rate housing is built,” she said. “It is the 26,000 absence of affordable units that need a similar commitment.”

Several council members acknowledged the urgent need for more affordable housing, but they disagreed with Seelbach on how to get it. 

Council Member Steve Goodin said “It’s absolutely the wrong time to mess with the income tax” as people and businesses are recovering from the pandemic.

Council Member Liz Keating agreed, saying it’s unfair to put the burden of funding on the city alone. “I see this as a regional problem,” she said.

Council Member Greg Landsman said this is a complex issue that requires the buy-in and support of multiple partners. He said the city has already put $50 million toward the issue this year, but more help is needed. One example he gave was the Smale Commission, which made more than 100 recommendations in the 1980s to improve the city’s infrastructure, using proceeds of an earnings-tax increase endorsed by the group.

“The end goal should be providing concrete recommendations for broad, systemic citywide change, and bringing that proposal to voters. I believe that is what we need, and I am committed to playing a major role in making sure it happens,” he said.

Goodin said going it alone on the ballot could hurt the affordable housing cause more than help it. 

He mentioned Issue 3, an affordable housing charter amendment that would have required the city to put at least $50 million a year toward affordable housing. Voters in May voted 73% to 27% to reject it

“The last thing we need is a divisive ballot issue in which these complex issues are broken down to slogans that are misleading and it becomes an ‘us vs. them’ argument,” he said.

Fox said she doesn’t care how it happens. She just wants to see more action taken.

“We… look forward to the day when Cincinnati voters will be afforded another opportunity to dedicate funding towards affordable housing,” she said. Even a proposed city charter amendment to fully fund the Affordable Housing Trust Fund deserves a second chance.” 

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