Measure Would Create AC Growth Tax Credit Program to Incentivize Building of Owner-Occupied Housing
TRENTON – Bipartisan legislation sponsored by Senators Jim Whelan and Robert Singer that would increase homeownership in Atlantic City in order to spread out the property tax burden among a larger pool of residents was approved today by the Senate Economic Growth Committee. The bill, through tax incentives, would encourage developers to build owner-occupied housing units within the city.
“With the recent closing of four casinos in Atlantic City, the city’s tax burden has shifted from the gaming industry onto homeowners, causing residents a substantial financial hardship,” said Senator Whelan, D-Atlantic. “While the Legislature is working to stabilize Atlantic City’s budget in the short-term, incentives to broaden Atlantic City’s ratable base in the long-term are necessary for fiscal sustainability. I have been working with my colleagues from across the aisle and my district mate Assemblyman Mazzeo in an effort to create sustained financial relief for our residents. Encouraging new homes to be built in Atlantic City is a step in the right direction.”
“With the continued setbacks to the gaming industry and the uneven percentage of renters to home owners in the city its clear there has to be steps taken to create a stable revenue stream that can support Atlantic City over the long haul,” said Senator Singer, R-Monmouth, Ocean. “Enticing builders to invest in the city will create more opportunities for tenants to become homeowners and for those outside the city to invest in a vacation home. Increasing the base of owner-occupied homes in the city will to help provide the long-term stability that’s needed.”
The bill, S-2654, would create the “Atlantic City Growth Tax Credit Program” to provide residential developers with a tax credit of up to 80 percent of the developer’s costs for land acquisition, capital improvements, engineering fees and architectural fees to build owner-occupied housing in Atlantic City. Developers would be eligible for this tax credit for projects that include at least eight newly-constructed units such as single-family homes, townhouses, condominiums and/ or duplexes. Eligible project must be at lease 80 percent owner-occupied and be no more than eight-stories in height.
“Asking developers to making risky investments such as residential housing in Atlantic City, where the majority of residents are renters, is a difficult lift, particularly during the city’s current fiscal crisis. Hopefully with this tax incentive program, we can create an environment where developers are ready to invest in new housing and homebuyers will take a second look at Atlantic City for their full time or vacation homes,” added Senator Whelan.
Homebuyers who purchase units under this program would be eligible for low-interest mortgages through the New Jersey Housing and Mortgage Finance Agency.
If the bill becomes law, the program would begin immediately and expire in five years or when the proportion of renters to homeowners in Atlantic City falls below 50 percent. Currently, approximately 75 percent of Atlantic City’s residents rent their housing.
The bill was approved by the Committee with a vote of 5-0. It now heads to the Senate Budget and Appropriations Committee for further review.