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Middle May Incentivize Rehabilitation

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By Vince Conti

COURT HOUSE – Middle Township Committee March 2 devoted its work session to a potential plan to use tax abatements as an incentive for property owners to invest in improvements.  

Mayor Timothy Donohue Feb. 25 hinted at the plan during his State of the Township Address to the Middle Township Chamber of Commerce. At the work session, land use attorney James Maley went into more detail on how such an arrangement might work. 

Maley explained that a formal rehabilitation designation for an area or even the entire municipality can carry certain flexibility concerning state land use law.  

If used properly, the designation will permit the ability to modify zoning to “fit” the needs of a project the governing body wants to encourage.  

This streamlining is attractive to developers seeking to ameliorate risks and expenses involved in going before land use boards to request variances.  

Rehabilitation projects are also eligible for negotiated tax abatement on the additional taxes that would otherwise follow from certain improvements. That abatement can extend up to five years. 

The novel aspect of the plan under consideration is a potential rehabilitation designation for the entire municipality, such that abatements could be an incentive to home improvements within a specific dollar range. 

As Maley explained, homeowners in a defined rehabilitation area could have the added taxes that result from improvements abated for up to five years. This would not change the existing taxes based on the assessed value before the improvements. 

Maley said the program could be structured to allow the municipality to make automatic the tax abatement arising from the increase in assessed value for residential improvements.  

“It could be something the tax assessor could just do,” Maley added. 

Maley is also the mayor of Collingswood, where the master plan notes that the borough is an area in need of rehabilitation. Residents are offered abatements for the impact of home improvements on their assessments.  

Maley said it encourages property owners to engage in the upkeep of their property. 

“They don’t complete a home improvement project and immediately get hit with a new tax bill,” he added. 

He suggested the municipality could structure the program so that rehabilitation projects above a targeted dollar amount, or projects where zoning flexibility might be needed, would come before the governing body to be decided on a case-by-case basis. 

Larger projects, such as major housing or commercial development, might require more complicated designation of a redevelopment area, a designation that carries the ability for longer-term abatement and payment in lieu of taxes programs.  

“Larger projects may need more encouragement,” Maley said.  

He mentioned two such areas, at the site of the former concrete plant off Route 47, in Rio Grande, and a large, underdeveloped tract, on Indian Trail Road. 

Maley emphasized that designating a rehabilitation area for large sections of or even the entire municipality would not change the underlying zoning.  

Zoning flexibility is an option that can only be exercised by the governing body to encourage specific rehabilitation projects.  

The Planning Board would also continue its existing practices concerning site plan approval for projects. 

What appears to be driving most of the interest on the committee is the potential for a program that incentivizes and rewards home improvements across the municipality.  

Donohue asked Maley if the Collingswood experience showed that homeowners took advantage of the program. Maley said the program worked well, not only in Collingswood, but in several other municipalities across the state, mentioning Galloway Township and Glassboro as other examples. 

During his address to the Middle Township Chamber of Commerce, Donohue said he would be back before the group soon to explain the potential abatement program and get the feedback of the business community. That may be the next stop, as the municipality continues its deliberations. 

To contact Vince Conti, email vconti@cmcherald.com. 

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