Worthington City Council moved forward Monday night with a novel approach to addressing housing affordability while protecting the city's tax base: a workforce housing property tax abatement program that requires mixed-use development generating income tax revenue.
The program, which staff will bring back as a formal resolution on December 8th, represents one of the few such initiatives in Central Ohio that ties residential tax incentives to commercial development and payroll creation.
Why "Workforce" Housing?
Assistant City Manager David McCorkle emphasized that the program is intentionally called "workforce housing" rather than simply "residential property tax abatement" for a specific reason.
"We are putting the program before you to encourage the inclusion of workforce housing units within new multifamily developments," McCorkle explained. "We also want to promote mixed-use projects to combine residential with commercial use, office or things that generate income tax revenue."
The program targets households earning 60% and 80% of the Area Median Income (AMI)—income levels that include teachers, firefighters, and retail workers. Staff evaluated 100% AMI but determined those rent levels don't provide meaningful affordability.
Key Program Requirements
Eligibility:
- New construction, mixed-use, multifamily projects only
- Must include commercial component generating payroll
- Located in existing commercial zoning areas (mirrors current commercial CRA boundaries)
Two Project Tiers:
In response to community feedback about supporting smaller developments, staff added a second tier:
| Project Size | Minimum Payroll | Minimum Units |
|---|---|---|
| Under 2 acres | $2 million annually | 4 units |
| 2+ acres | $5 million annually | 10 units |
How Abatements Work:
The abatement percentage and duration depend on the percentage of units committed at various AMI levels. For example, committing 20% of units at 60% AMI would qualify for a 75% tax abatement for 10 years.
Bonus Structure:
Developers who exceed minimum payroll requirements can earn additional abatement duration—up to one extra year for each $5 million in additional annual payroll created.
Stay connected to what's happening in Worthington, Ohio.
Flexibility Option
For projects that fall short on affordability requirements, a "payment in lieu of" option allows developers to make one-time contributions to the city's housing fund:
- 60% AMI units: $40,000 per unit
- 80% AMI units: $20,000 per unit
These funds would supplement the $500,000 housing fund included in the 2026 budget, potentially supporting programs like rehabilitation loans, revolving loan funds, or first-time homebuyer credits.
A Pioneering Approach
McCorkle emphasized that few communities are attempting what Worthington is proposing.
"There are not many communities doing what we're talking about doing," he said. "There are a couple of purely residential property tax abatement programs in communities that are doing their best to attract as many people as possible. There are very few programs doing what we're talking about doing, which is incentivizing residential and giving bonuses for income tax revenue creation."
He acknowledged the program may need refinement over time: "This is probably not perfect, and in a year we'll probably come back to you and have some tweaks to the program."
Community Input
During public comment, one resident suggested the city should also consider incentives for accessory dwelling units (ADUs), work-from-home arrangements, and home-based businesses to generate income tax revenue within existing residential areas.
McCorkle acknowledged ADUs could eventually be part of the conversation but noted the program was designed specifically for mixed-use developments generating commercial payroll. Staff recommended tackling ADU policy through the ongoing Worthington Together comprehensive plan process before considering incentives.
Council Response
Council members expressed support for moving forward while appreciating its innovative approach.
"I like that it's thinking a little bit outside of the box," Council Member Rebecca Hermann said. "The fact that we are landlocked and the fact that we do have, every bit that we have is incrementally important, and we know that income tax is one of the main drivers for the survival of municipalities."
Council President Rachael Dorothy appreciated the commitment to annual review: "The fact that we're going to revisit it annually makes me feel better. I don't like when we just put one fixed number in there."
What Happens Next
Staff will bring the formal resolution for council adoption at the December 8th meeting. The program guidelines, once adopted, will be submitted to the State of Ohio as a record-keeping requirement—though the state no longer has approval authority over local CRA programs.
Individual projects seeking tax abatement under the program would still require separate council approval.
The city's goal is to create up to 1,300 new housing units as part of its broader housing and economic development strategy, with this program serving as one tool to attract quality mixed-use development.