NORTH ADAMS >> The City Council will look to City Hall staff for guidance on a proposed tax incentive program for property owners who invest in their homes.
The council's Community Development committee has referred the proposal to City Administrative Officer Michael Canales and Mayor Richard Alcombright for review, asking them to learn what tax incentive programs may be available for those who wish to rehabilitate homes.
Councilor Keith Bona brought forward a proposal in January that would provide benefits to homeowners who make significant renovations, primarily by freezing the assessed value of the home for a set number of years while its real market value increases.
But at the time, Councilor Lisa Blackmer noted that state law would forbid a municipality from instituting any tax abatement program, unless the city were to ask the Legislature with a home rule petition.
On Monday, Bona suggested that the city ask to participate in the Housing Development Incentive Program, typically only available to Gateway Cities like Pittsfield and Fitchburg. While North Adams faces many of the challenges that Gateway Cities often do — such as crime and a troublesome housing stock — its population is below the 35,000 threshold required to participate in the state-funded program.
"We've done home-rule petitions for other things and again, if you read specifically what Gateway Cities is there for, we do fall within those categories," Bona said. "Part of it was rehabilitating neighborhoods. ... I think we clearly do have some of those areas within our city."
Blackmer said such programs often are income based, and those who qualify for the tax incentives often can't afford to make the investment into their homes in the first place.
Canales told the committee it was unlikely the state would allow the city to outright become a Gateway City, which includes a number of community and economic development programs. It would be more feasible, he said, to request joining only the Housing Development Incentive Program.
"If it was something that the city had to approach as a home rule petition, I think we'd have more luck saying 'You already have this in place, you're just denying the cities that are under 35,000.' " Bona said.
But under that program, Councilor Nancy Bullett noted, the tax incentives are only provided to multi-family homeowners.
If it's not possible to join the Housing Development Incentive Program, Bona suggested the council consider providing homeowners with other rebates and incentives outside of a property taxes. He noted that water, sewer, and even inspection fees are not technically taxes and could be manipulated to provide a break for homeowners making an investment.
"I feel like it should almost be a 'thank-you,' " Bona said.
Blackmer expressed concern about such a system, in which theoretically the taxes of those who are simply maintaining their homes increase to compensate for the rebates given to those who invest in their homes.
"What's the difference between fixing your house and maintaining your house," Blackmer asked. "If somebody repairs their roof, that's their responsibility as a homeowner, so I guess I have issues [with the proposal]."
Bona has said that the idea for a homeowner tax incentive came as he read residents' reactions to reports that a special tax agreement would be proposed between the city and developer of the Greylock Mill on State Road.
"There was a commitment. It wasn't just because they were rehabbing a building; it was because they were creating jobs, creating other income, they would have personal property taxes attached to the businesses."
Contact Adam Shanks at 413-496-6376.