Cleveland native Frank G. Jackson, the city’s longest-serving mayor, has been an advocate for building equity and opportunity in this postindustrial city since taking office in 2006. Mayor Jackson is a lifelong resident of the Central neighborhood, where he began his career in elected office as a City Council member. He later served as City Council president.

A graduate of Cleveland Public Schools, Cuyahoga Community College, and Cleveland State University—from which he earned bachelor’s, master’s, and law degrees—Jackson began his public service career as an assistant city prosecutor in the Cleveland Municipal Court Clerk’s Office.

During his tenure as mayor, Jackson has focused on helping residents and businesses benefit from investments occurring in the city and advancing the Downtown Lakefront Development Plan. He also spearheaded Sustainable Cleveland 2019, a 10-year initiative designed to build a more sustainable regional economy, encourage sustainable business practices, and improve air and water quality in this former manufacturing hub.

Mayor Jackson recently spoke with Senior Fellow Anthony Flint as part of a series of conversations with mayors of cities that are especially significant to the history of the Lincoln Institute. The series is part of the organization’s 75th anniversary celebration. An edited transcript follows; the full interview, along with others in the series, is available as a Land Matters podcast.

Anthony Flint: When our founder, inventor and entrepreneur John C. Lincoln, got his start in the late 1800s, Cleveland was a booming place, arguably right up there with New York and Chicago, an incredible mix of innovation and jobs and homes and neighborhoods. Could you reflect on how that legacy has been on your mind as you’ve governed Cleveland over the last 15 years?

Frank Jackson: Well, it’s always good to know history, so you can put yourself in the right frame of mind and have perspective. Cleveland was a booming place, with the Rockefellers and the [economic successes] of the Industrial Revolution . . . we were ideally located in terms of our ability to be a hub and for the distribution of goods and materials throughout the Midwest. So we reflect back on those heydays, fully recognizing that what brought us to that moment is no longer here . . . and that there needs to be a relooking at where Cleveland is now and what could position Cleveland to be in a similar situation as a hub for economic opportunity and prosperity and quality of life.

AF: At the statue in Public Square, former Mayor Tom Johnson is shown seated with his hand on a copy of Progress and Poverty by Henry George. Cleveland is where John Lincoln first heard George speak. Why do you think Cleveland was so receptive to the ideas of George, who believed the value of land should belong to everyone?

FJ: I couldn’t tell you for sure, but as you know, the body takes its direction from its head . . . and I think Tom L. Johnson was a mayor with progressive thoughts and with the fortitude to execute and implement [ideas]. So he wasn’t just a conversationalist, he actually did things.

This transition that Cleveland was in then—fast-forward, and we’re in the same transitional kind of period. The Industrial Revolution produced a certain level of prosperity and wealth, but also produced a certain social condition . . . that I believe that progressive era was attempting to change to create more equitable outcomes.

I admit, I didn’t really study Mr. George’s philosophy. But what I do understand is this progressive notion of land use, and how land should not be controlled by a few entities that determine what happens. There should be broader input into what happens on that land.

AF: As the city has steadily emerged from a period of decline and population loss during the second half of the 20th century, what have been the critical elements of its regeneration? What catalysts are you most hopeful about?

FJ: Well, it’s how you position yourself, how does Cleveland position itself for the future . . . . I look at it as, how do we have a sustainable economy? How do we deliver goods and services and how do we get into sustainable industries [like electric vehicles] . . . all of this includes technology, all of it includes education, all of it includes research and development. All these things are inclusive of each other. So there’s not just one thing we can pick and say we’re going to do.

I think we need to go back to what Mr. George was talking about, and what Tom L. Johnson was trying to do, which is to say that [progress] is only sustainable if we have equity, and if we eliminate the disparities and inequities in the way our social, political, and economic systems function. And as you know, particularly around the social unrest these days, if we fail to address issues of classism and racism, then all our efforts will be doomed.

AF: Race and economic development are very much on every mayor’s mind these days, especially now that the pandemic has revealed so much entrenched inequity. What are some of the most effective ways Cleveland has addressed historic segregation and racial disparities?

FJ: Before I answer that, let me just say that whatever we have done is not sufficient, because all of these things are institutionalized . . . . We’ve gone to the point of declaring violence and poverty as a public health issue. We’ve gone to the point of establishing a new division in the Department of Health around social justice. We’re trying to institutionalize some things.

We have also attempted to work with our private sector partners to address inequities, disparity, and racism within their organizations, helping to have a better outcome in terms of contracting for goods and services with lending institutions—even though redlining is illegal, the actual practice of how investments are made and moneys are lent and developments occur is basically redlining. So we try to work with them to help them . . . be able to take a risk where they normally would not take a risk. That can only happen if you allow for wealth to occur among those who have traditionally been denied wealth. If you have leadership and career opportunities for those who had traditionally been denied those opportunities. So those are the kinds of things that we work on.

The real thing is what is the culture of Cleveland. How does Cleveland function, and what is its attitude toward these things. And that’s a behavioral thing that bureaucracy cannot really regulate.

AF: Can you tell us about recent zoning reform measures aimed at reducing barriers to housing production and other local economic activity? How important are these rules and regulations to regeneration, and how has Cleveland made innovative use of vacant and abandoned land?

FJ: As you know, land use is key . . . . We’re moving toward having zoning more aligned with people and multiple mobility, the kind of approaches where there’s bikes, cars, scooters, walking, jogging. In that context, trying to create that type of city, it’s very important to have zoning that will accommodate that and will accommodate it in a way that [minimizes conflict].

When I first came into government, there was no new housing development in Cleveland . . . . As a result of the negative impacts of federal and state policy around redlining and urban renewal and then the social impact of riots, [we had] acres and acres of vacant land in the central city, predominantly in African-American communities . . . . Mayor [Michael White, who led the city from 1990–2001] was really a genius in this regard. He worked with the financial institutions and developers to create a network of neighborhood nonprofits whose primary purpose was to redevelop land for housing and to redevelop land at all price ranges, that would make it affordable. I’m familiar with it because I was councilman of Central, where I still live, which probably had the most negative impacts.

We continue this effort today with Recovery Act money; we’re getting $511 million and we’re working with the private sector to develop tools. We’re not talking about a project or initiative, we’re developing tools. What we’re working on now to really connect all these dots . . . a lot of that has to do with land and with the availability of land, whether it’s lakefront land or empty office space downtown or warehouses, old industrial sites that need environmental cleanup. It’s not just housing, but also, how do we create entrepreneurship, commercial strips, retail strips that still have the bones—how do we bring them back and have ownership of goods and services being provided to the community by the people in that community or someone who looks like the people of that community?

AF: Well, if there’s one thing that Cleveland has, it’s good bones, right?

FJ: That’s exactly right. One of the things that culturally came out of that period that you talked about, the heyday of Cleveland, was Severance Hall [home of the Cleveland Orchestra], the museums, the whole University Circle area . . . . Now we’re trying to use old industrial sites and lakefront or riverfront property in a new way since it’s no longer used for commerce . . . [but] a freeway, railroad tracks, those kinds of things [are] almost impossible to remove, but they’re barriers. So how do you overcome those barriers? One of the things we’re looking at is a land bridge that would allow for green space and access to the riverfront, the lakefront, and with that to always have public access and not have private ownership of the waterfront.

AF: Sounds like there’s a lot of reimagining going on.

FJ: That’s the advantage to where Cleveland is now. To have a blank canvas, so to speak, gives us that opportunity. Now the question is whether or not we mess it up . . . . I’ve maintained that whatever we do, it will never be sustainable if we don’t address the underlying issues that are really the issues of America: institutionalized inequity, disparities, racism, and classism, which has a lot to do with land.

This interview is also available as an episode of the Land Matters podcast.

Anthony Flint is a senior fellow at the Lincoln Institute and a contributing editor to Land Lines. 

Photograph: Once an industrial powerhouse, Cleveland has had to reinvent itself after experiencing decades of economic decline during the 20th century. Credit: benkrut via iStock/Getty Images Plus.

Home prices in Idaho are surging. Over the past year, median home values in large cities like Boise and Nampa have increased by as much as 38 percent. Those higher prices, combined with the end of a property tax break granted during the pandemic, mean that many Idahoans are now seeing dramatically higher property tax bills. In response, the state legislature passed a controversial bill aimed at tax relief this spring.

The new law is unusual compared with typical approaches to property tax relief, and some local leaders are warning that its revenue limitations could ultimately force them to raise taxes or fees elsewhere, or cut essential services. As cities and counties assess how the law will affect their budgets, one city has even put a temporary halt on development.

Among other things, HB 389 places caps on local revenue growth. Idaho already had a 3 percent cap on local property tax revenue growth, but the cap didn’t apply to new development. That’s no longer the case—now, allowable property tax revenue growth from new construction will be calculated on only 90 percent of its assessed value. In addition, existing properties returning to the tax rolls under programs to encourage new economic development will contribute only 80 percent of their assessed value to the taxing district’s allowable revenue base. The law also imposes an 8-percent cap on localities’ total annual revenue growth, regardless of the amount of new development.

The bill’s author, House Majority Leader Rep. Mike Moyle, has said the new changes would stop the rapid development growth in Idaho from driving up existing homeowners’ tax bills. Even with the old revenue cap in place, homeowners saw their bills rise faster because home values are rising rapidly while the value of nonresidential property is not. “Right now in Idaho, when somebody builds a new house next to you, your taxes go up,” he told a local news station in May.

Although Moyle argued the bill “fixes that problem,” that’s not the result homeowners are likely to see. Properties are reassessed every year in Idaho, and an existing homeowner’s bill based on that value is more affected by the overall market rather than whether a new house is built nearby. Areas with a lot of growth might experience faster appreciation in home values, and thus faster growth in property tax bills, but restricting taxation of new property will not provide a direct benefit to existing homeowners.

What’s more, the cap on taxes collected from new development actually burdens existing homeowners more by artificially deflating the tax bills for new homes while taxing existing homes at full value.

Officials in fast-growing places are especially worried. Cities must provide newly developed areas with services such as water and sewer, public safety, and street maintenance. Up until this year, revenue collected from those new properties helped pay for that, but now cities are limited in their ability to pay for growth.

The restriction on tax revenue from new development is an unusual approach, said Lincoln Institute Senior Fellow Joan Youngman. While many states limit the total tax revenue a city or town may collect each year, Youngman says that increases are often permitted to reflect the addition of new construction to the tax base.

“Allowing a city’s total tax revenue to keep pace with new development enables the jurisdiction to raise funds to meet the service needs of a larger population without increasing taxes on the existing residents whom the limits are designed to protect,” Youngman said.

Responses to the Bill

Local leaders in Idaho were caught off guard by the bill, which was introduced during the last week of the legislative session in May. The bill faced bipartisan opposition but ultimately passed by a ratio of two to one. Legislators who voted against it said they were concerned it would erode local governments’ ability to provide services, particularly in rapidly growing communities.

That issue is perhaps most pressing in Treasure Valley, the most populous region of Idaho, which encompasses the fast-growing Boise metro area. The city of Nampa has grown by 36 percent over the last decade. That influx of new residents, combined with historically low interest rates, has fueled a home building boom. Under normal circumstances, when such growth occurs, tax rolls increase accordingly. But capping revenue from new construction now means that localities will have to look elsewhere for the funds needed to cover costs related to growth—or they’ll have to cut public safety and other critical services.

Cities and counties across the state are still evaluating how the new caps will impact their revenues. Nampa Finance Director Douglas Racine estimates that HB 389 will reduce revenues from new construction by $1 million. So far, city leaders have responded by increasing impact fees, which are tied to new construction, and are considering other ways to balance the budget without raising costs for existing homeowners.

Northwest of Nampa, the city of Caldwell (pop. 59,000) has enacted the most aggressive response to the legislation so far with a 120-day moratorium on annexations and new development approvals. Supporters said the pause would help give the city, which grew 26 percent between 2010 and 2019, time to come up with a new plan for how to handle growth in the face of the “imminent peril” posed by the state legislation. The move was opposed by builders who warned that pausing development could cause home prices to soar even higher.

Relief by Any Other Name

The new state law also includes two changes aimed at property tax relief. It increases the current cap on the homeowner’s exemption, the portion of a home’s value that is spared from taxation, from $100,000 to as much as $125,000 (depending on the assessed value). And it increases the maximum benefit provided by the circuit breaker program, which offers tax relief to seniors and homeowners whose property tax bills exceed a certain share of their income.

However, starting in 2022, anyone whose home is valued at more than 125 percent of the area median will not be eligible for the circuit breaker program. Opponents warned that adding the home value provision would unfairly deprive people from tax relief if they have fixed incomes but happen to live in hot housing markets. Further, restricting cities’ ability to generate revenue from new construction will erode the tax base over time.

“In the final analysis, the financial benefit to taxpayers will be difficult to quantify and will very likely be negligible,” Nampa’s Racine wrote in a June budget report.

Mayor Debbie Kling of Nampa hopes to rally other Treasure Valley leaders to support property tax relief next year to address the issue from another angle: changing the way homes are assessed. Currently, Idaho law requires that homes be assessed at market value. Kling supports an amendment to the state constitution that would limit how much a home’s assessed value can increase each year. She lobbied for the change this year but hopes next year it will have more support.

“It’s frustrating,” said Kling. “We have the ability to do something that provides actual tax relief to our citizens. Unfortunately, this year, a few in the legislature just wanted to point their fingers at the cities and say our budgets were too high.”

However, unlike revenue limits, which affect only the amount of tax collected, assessment limits can distort the taxes due on similar properties. For example, in California, properties are generally only reassessed at market value upon sale, which means that longtime property owners pay artificially low rates compared to newer purchasers. The 50-State Property Tax Comparison Study by the Lincoln Institute and the Minnesota Center for Fiscal Excellence examines 29 large cities in which state-imposed assessment limits favor longtime owners by limiting the growth in the assessed value of individual properties.

Youngman points out that when housing values rise precipitously it is important to adjust tax rates to moderate the effect on tax bills. In Massachusetts, Proposition 2½ imposes both a revenue limit and a rate limit but maintains fair market value as the basis for assessments. This system has remained stable for over three decades. “This shows that limitations can be based on accurate assessments,” Youngman said.

Liz Farmer is a fiscal policy expert and journalist whose areas of expertise include budgets, fiscal distress, and tax policy. She is currently a research fellow at the Rockefeller Institute’s Future of Labor Research Center.

Photograph: Municipal leaders in Idaho say new legislation intended to provide property tax relief will force them to cut essential services or raise taxes and fees elsewhere. Credit: picmax via iStock/Getty Images Plus.