Despite home values that have declined faster and stayed lower than surrounding communities, Middletown residents pay the highest property taxes in Butler County.
Because of this, Middletown is preparing to start a discussion on improving the city’s housing stock and connecting for residents how property values affect taxes.
During economic downturns, the county can apply factors to slowly reduce property value loss and therefore property tax loss. During big upswings, it applies the factors to slowly raise property taxes up to the anticipated revenues.
“Since we are at the bottom of property value loss in (Middletown), and have hovered there for a few years, we are seeing the highest factor available in the tools to maximize property tax revenues despite the loss in overall city real estate value,” City Manager Doug Adkins said. “As property values start to rise, the property tax revenues will lag behind the real value as they slowly wind us back up again.”
From 2011 to 2015, residential property values in Middletown have decreased 13.5 percent — or nearly $58.7 million, according to Adkins. Overall, the city’s property rates dropped just 8.8 percent.
During that same period of time, the city’s agriculture property rate went up 23.1 percent; the industrial property rate went up 4.8 percent; and other property rates went up 8 percent. Commercial property rates saw a 2.6 percent decrease between 2011 and 2015.
“The numbers are absolutely staggering,” Adkins said.
“We need to make changes to get lower effective tax rates,” Adkins said.
He said some ways to accomplish that would be to:
- Lower the total millage approved by voters.
- Add significant new residential housing, which would add move value to the city’s housing stock.
- Upgrade a large portion of the existing housing stock which would also add more value to city’s housing stock.
Adkins acknowledged this will be something that not everyone will like. In addition to starting the discussion about the housing stock at council’s May 2 meeting, Adkins said he would be meeting with community organizations, landlords, civic clubs and ministers to discuss this issue over the next several months.
‘A definite challenge’
Rick Fishbaugh, a local retired developer said raising property values is “a definite challenge.”
“The problem is trying to attract people to Middletown,” he said. “We have the highest effective tax rates and the lowest performing schools. It’s almost limiting the market to single family people and senior citizens. We’re not getting young families into new homes.”
Fishbaugh said he is concerned that properties acquired by the Butler County Land Bank are not being sold and not producing tax dollars as well as more properties are being acquired by various nonprofits and are not on the tax rolls, which are increasing the effective tax rate higher and higher.
“If the schools turnaround, we have a chance,” Fishbaugh said. “If not, new home building is going to be limited.”
Fishbaugh said if taxes continue to rise, businesses will go to the county to appeal them. He said if the appeal is granted, taxes go up for everyone else.
While residents are generous in passing various tax levies and bond issues, he said at some point that cannot go on. Fishbaugh also said City Council needs to be watchful about granting tax abatements
Paying too much in taxes
Steve Bohannon, a Middletown councilman and chairman of the Middletown Real Estate Investors Group, said he feels he and his fellow landlords are “paying too much in taxes for the tax levies on our properties.”
“No one wants to pay any more (taxes) than they need to,” he said. “The city needs the revenues to provide to citizens with various services such as upkeep of roads, infrastructure and other services, with public safety being the big one.”
Bohannon owns 18 investment properties in the city.
“Houses out there are absorbing most of the tax levies and somehow we need to get more balance in line with current housing values,” he said. “From 2008, we took a big hit,” he said. “(Housing) values are showing an uptick but it’s still far, far behind in having the quality of housing stock for today’s buyers.”
Bohannon said the landlords will be meeting with Adkins on May 11 to discuss the issue.
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PROPERTY TAXES IN BUTLER COUNTY
Tax bills on a $100,000 home:
- Middletown: $2,616
- West Chester Twp.: $2,413
- Monroe: $2,330
- Fairfield Twp.: $2,319
- Liberty Twp.: $2,262
- Fairfield: $2,077
- Hamilton: $1,966
- Oxford: $1,513
Source: Butler County Auditor’s Office
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One thing affects another
Longtime resident Ann Mort said she doesn’t know how Middletown got to the top of the list, but believes it took a number of years to get there.
“I think it’s a total package — one thing affects another,” she said. “We used to be at the bottom of the list.”
Mort, a former city council member who now serves on the Planning Commission, doesn’t believe people moving here would make a decision based on the effective tax rate. She also said residents made the decision to approve various tax issues to pay for services.
“I believe knocking down sub-standard housing to make room for new housing will improve property values and the general standard of living,” she said. “The business base and job market shifted, which also made a difference to the community.”
Regional competition for new housing
As Middletown looks at its housing stock and future demand, the city is also in competition with other area communities to build newer housing.
Recently, Warren County announced a new community authority to develop the 1,200-acre Union Village in Turtlecreek Twp., just several miles from Renaissance, an upscale housing development on Middletown’s East End in Warren County.
Planners are expecting as many as 12,000 people to eventually live as many as 4,500 homes and multi-family residences that is being developed on land owned by Otterbein Senior Lifestyle Choices.
“I believe that the Union Village project helps Warren County but has only an incremental impact on the quality, quantity and desirability of housing in Middletown,” Adkins said. “There will be people who are looking for their product. There will be other parts of the housing market that are looking for an established community, historical housing, housing value for dollar paid, etc., and other amenities that will make Middletown more attractive. We’ll run our own race.”