On July 14, 2020 in Pennsylvania, a bill was signed into law that other states—those that don’t already have something similar—might do well to emulate. The law goes into effect in 60 days.
Act 61 of 2020 gives municipalities a new tool to transform blighted properties into thriving parts of the community, according to the measure’s sponsor, Senator Judy Ward (R-30).
It will allow local taxing authorities to provide a tax exemption for up to 10 years for any improvements and new construction on blighted properties in deteriorated areas. The amount of the exemption will decline by 5 to 15 percent per year before expiring after the tenth year.
The bill focuses on mixed-use redevelopment including both residential and non-residential uses, in order to support the development of more vibrant communities, Ward said.
“We have many properties throughout the region that have great potential for future use, but municipalities do not have the tools they need to ensure these buildings can be rebuilt or restored properly,” Ward said.
“This new law offers municipalities another pathway to rehabilitate these properties and transform these eyesores into vibrant parts of the community,” she added.
Projects will only be eligible for the tax abatement if all zoning ordinances are observed, all code violations are cleared, and the value of the property increases by at least 25 percent.
In addition, the property owner must pay any delinquent taxes related to the subject property.
Ward credited former Representative Jerry Stern for first introducing the concept of this bill during the 2013-14 Legislative Session. Stern urged Ward to keep working on the bill after his retirement in 2014.
Photo of Harrisburg, Pennsylvania via Adobe Stock.