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Ohio State University Extension


Community Reinvestment Areas: Economic Development Tools

Community Development
Nancy Bowen-Ellzey, Assistant Professor and Extension Educator, Community Development

A Community Reinvestment Area (CRA) is an area of land designated by a local government on which property owners can receive tax incentives for constructing new or renovating existing buildings. The CRA Program permits municipalities, townships, or counties to designate areas where investment has been lagging to encourage revitalization of the existing housing stock and the development of new structures. Residential, commercial, and industrial projects are all eligible. The program is similar to the Enterprise Zone program in that it incentivizes investment by allowing for property tax abatements, but that is where the similarities end. The program also should not be confused with the Community Reinvestment Act (CRA) for banking and financial institutions.

What is the Purpose of the Program?

Ohio's Community Reinvestment Area Program was created in 1977 and revised in 1994 in sections 3735.65-70 of the Ohio Revised Code, to promote revitalization in depressed areas by offering property tax exemptions for any increased property valuation that would result from renovation of existing structures or new construction activities within the area. The program can be used to encourage historic preservation, residential rehabilitation, or new residential construction and/or as an economic development tool to encourage commercial and industrial renovation or expansion and new construction.

How is a CRA Established?

To get started, a municipality, township, or county must determine that they have an area in need of revitalization; they can then decide what the boundaries of the CRA will be. The local government determines the need for a CRA based on the number and extent of properties in disrepair. Once they make the decision to establish a CRA, they will then decide the size, number of areas, and the term and extent of the real property exemptions. Below are four steps that must be followed per the Ohio Department of Development (ODOD) for approval of a CRA area:

  1. Conduct a Housing Survey of the structures within the proposed area. The results must support the finding that the area is in need of renovation. The survey is conducted by driving around the targeted CRA area, taking pictures of the affected properties, and documenting the addresses of the affected properties in disrepair. The results of the survey should show that a significant number, or at least 20%, of the properties in the targeted area are in need of rehabilitation.
  2. Adopted local legislation must contain the statement that the area is one in which "housing facilities or structures of historical significance are located, and new housing construction and repair of existing facilities or structures are discouraged." The legislation also defines the proposed area and includes the incentive rate and term for both residential and business projects.
  3. The entire legislation must then be published in a local publication once a week for two consecutive weeks for public comment.
  4. Prepare the Ohio CRA Petition for Area Certification found by clicking on "Forms and Sample Documents" on the ODOD website at Then submit the petition to the ODOD (77 S. High St., P.O. Box 1001, 28th Floor, Columbus, OH. 43216-1001) with a copy of the legislation, the survey, and a map of the proposed area.

How is the Program Administered?

The local government appoints a Housing Officer to oversee the program. The Housing Officer is often a current employee who is accustomed to working with the public. The Officer could be the City or County Engineer, the Regional Planning Commission Director, or the Community or Economic Development Director. The Housing Officer's role is to serve as the program contact, meet with property owners, and review and submit their applications for certification to the County Auditor.

The local government must also create the Tax Incentive Review Council to review applications submitted by the Housing Officer, to negotiate abatements with business projects, and to review performance on all agreements. Council members are appointed by the local government to include persons from a construction, real estate, or community development background who appreciate the need for revitalization.

What is the CRA Application Process?

Although local jurisdictions have liberal control over how and where the program operates (including the type of development to be supported by the CRA), whether to include both residential and commercial or industrial projects, and what the tax abatement rate and terms will be, the process remains rather constant. The diagram below describes the basic steps that are followed by an applicant.

Step 1

For a residential project, complete improvements then submit application to Housing Officer. For a business project (commercial and industrial), submit application to Housing Officer before construction begins.

Step 2

Housing Officer reviews application and presents to Tax Review Council for negotiation and approval. School Board may also need to approve application if abatement is over 50%.

Step 3

Housing Officer prepares agreement for signatures and submits to ODOD and County Auditor for certification. Abatement is effective the tax year after certification.

Back to Step 1

What Other Criteria Should Be Considered?

The program works differently for commercial and residential projects. If a project involves the renovation or construction of residential buildings, the work is completed prior to submitting an application for tax incentives. Once the work is completed and the application is filled out, the designated Housing Officer inspects the improvements to assure that they meet the abating criteria. If approved, the local school district is notified and the application is submitted to the County Auditor for certification. The abatement then becomes effective for the tax year following the year it was certified by the County Auditor.

Criteria for Residential Projects

  • Dwellings containing not more than two housing units
  • Up to a ten-year tax abatement and up to 100% abatement (as specified in local legislation)
  • Minimum investment of $2,500
  • Application submitted when work is completed
  • No cost for application

Criteria for Residential New Construction or Multi-family Projects

  • Dwellings with more than two housing units or new construction
  • Up to a fifteen-year tax abatement and up to 100% abatement (as specified in local legislation)
  • Minimum investment of $5,000
  • Application submitted when work is completed
  • No cost for application

Criteria for Commercial or Industrial Projects

  • Negotiated by tax review committee on case-by-case basis
  • Maximum of a fifteen-year abatement and up to 100% abatement
  • Minimum investment of $5,000
  • Agreement must be completed prior to construction
  • State of Ohio charges $750 for application

Commercial and industrial projects involve a negotiated agreement that must be in place prior to starting a project. The incentive levels and terms of the agreement will be negotiated, and there is notification to the affected school district. A Tax Incentive Review Council is created by the legislative authority to review performance on all agreements and projects. The review is typically done annually. Annual reports on the status of the CRA are sent to the ODOD.


While the CRA Program is primarily geared to housing, it has considerable value as an economic development tool because it can be used to incentivize targeted retail or commercial projects. The Enterprise Zone program, which operates similarly in that it provides for tangible property tax abatements, is strictly for manufacturing or service-related projects. Certain retail or commercial projects targeted by a community to improve the quality of life or fill a market need, including downtown restaurants or specialty shops, would be good candidates for the CRA program.


Ohio Department of Development. 2020. "The Ohio Community Reinvestment Area Program."

Ohio Rev. Code. § 3735.65—3735.70, 1994.

Program Area(s): 
Originally posted Jan 3, 2011.