45% of property value is tax exempt

It all seems taxing, but it's not

Over Labor Day, I attended a conference/retreat/gathering for ‘thought leaders’ called the Renaissance Weekend. As you can see from the redacted home page, it’s an invite-only, never-mention-anything-publicly event (I know; weird.) During the weekend I attended a panel of Silicon Valley types talking about blockchain. All the experts were extremely bearish about blockchain technology and companies based on them, save the one guy leading a blockchain-based start-up to help people book travel; heads up, Blockland Cleveland fans. I attended another panel on non-profits; I heard from someone who works for Lady Gaga’s non-profit, and another on based in San Francisco. Obviously I can’t tell you much, given the secrecy rule, but during the non-profit conversation I asked the panel what they thought about non-profits having an outsized influence in communities. The guy from San Francisco could not wrap his head around what I was saying; it simply was nothing he had ever considered before. “Well, people can try to pressure board members to resign?” he said, trying to answer. Most of the others in the audience were looking at me quizzically. Then, I saw one woman nodding her head, and she chimed in to help them understand my point: “Forty percent of property in Pittsburgh is tax-exempt! And that pushes up property values for the other sixty percent!”

Everyone else was still pretty much befuddled by this whole turn in the discussion but I was relieved to have a friend in the room. It was also the second time I heard that forty percent in Pittsburgh number bandied about.

Last night I had beers with a friend who is reading these chronicles and reached out to ask if I could to further explain points I made in my post about the Non-Profit Industrial Complex. One topic I brought up that was new to him is that non-profits are exempt from paying property taxes. The ever-expanding Cleveland Clinic does not pay them. Nor does Case, or CSU. Playhouse Square is exempt. So are all the churches. I wished I had a handy percentage number, a nice talking point like Pittsburgh has, so I looked up where that figure came from, and found this article.

Then I took to twitter, and asked if anyone knew the number for Cleveland (Really Important Reminder: I am not a policy person. I am not an expert on economics, or housing, or data, or how municipalities remediate lead poisoning. I am far too often asked my opinion about areas of which I do not have deep knowledge — I should really be asked more often about 19th century American realism, or the history of quill pens! Those areas I do have specialized knowledge.) I rely on friends who are experts, and hope others will take information they provide that I strew in these chronicles and run with it, expanding, analyzing, pushing back, writing it up, and generally offering more measured and research-based opinions.

Within ten minutes I had a tentative answer:

The combined value of parcels as of 2010 data in the City was $22,596,252,500. The combined value of tax exempt properties was $10,242,837,000, or 45.4% of the total.

Here is more data my friend pulled from the Cuyahoga County parcel records*

Parcel Count

• Cuyahoga County

  • Total Parcels: 482,356

  • Parcels with listed tax exemptions: 28,063 (5.8%)

• City of Cleveland

  • Total Parcels: 159,847

  • Parcels with listed tax exemptions: 19.262 (12.1%)

Parcel Area

• Cuyahoga County

  • Total Acres of Parcel Land Area (excluding water): 253,547

  • Acres with listed tax exemptions: 55,289 (21.8%)

• City of Cleveland

  • Total Acres of Parcel Land Area (excluding water): 39,752

  • Parcels with listed tax exemptions: 11,375 (28.6%)

Assessed Value

• Cuyahoga County

  • Total Value of Land & Buildings: $91,846,518,100 

  • Value of Parcels with exemptions: $18,020,575,100 (19.6%)
    

• City of Cleveland

  • Total Value of Land & Buildings: $22,596,252,500 

  • Value of Parcels with exemptions: $10,242,837,000 (45.4%)

Non-Profit & Religious Organization Data

• Cuyahoga County

  • Exempt parcels: 4,024

  • Total Land Area of exempt parcels: 6,246.1 acres

  • Total Value of exempt parcels: $5,296,785,400 

• City of Cleveland

  • Exempt parcels: 2,492

  • Total Land Area of exempt parcels: 1,897.51 acres

  • Total Value of exempt parcels: $3,208,025,100 

The person who crunched these numbers for me just now does not want to be publicly credited, perhaps another example of what I wrote about here.

What does it mean for the city that over 45% of the value of properties do not pay taxes? Many things, but most immediately: did you slip on the ice on a sidewalk today? Curse the city for not better salting the roads? And, maybe you, like me, run a small business that has to write a check to the IRS, state of Ohio, or RITA soon, and are worried about cash flow?

Over on Twitter, people are still discussing and trying to refine the stats above.* They are discussing permanently versus temporarily abated parcels, and someone just asked this unintelligible question: is it possible to sort of reverse-estimate the number using the gasb 77 statement?

Last night my friend also told me this: “It seems you are trying to piss everyone in town off with these posts.” He said it in a friendly, encouraging way, a smile on his face. This may be a result of these chronicles, but it is not my intention. I am writing about what I am thinking about, what matters to me, and what I think others are interested in. The key is not the negativity some might perceive: the key is the conversation. I live to talk about important topics openly and freely with smart people, and I am so thankful that I have access to people with expertise about matters of importance to the city, and that there are so many people in Cleveland committed to understanding complex issues, whether it is by to have beers to learn more or by calling up a database to respond to a query about tax-exempt properties in Cleveland. I am not pissed: because I cannot understand that tweet about gasb 77 statements, and others do, and are engaged in the question, I am happy, and grateful.

Cleveland Chronicles is a record of life in Cleveland throughout 2019 as filtered through the lens of the chronicler. Please sign up to receive it via email. You can do so for free, or, to support it and/or access the archives, for a small fee. I take posts down from the web after a bit. The frequency is unpredictable; sorry if it seems spammy.