32 CITY OF FRANKLIN, TENNESSEE Examples of Financial Incentives Easements Historic Preservation easements, also known as Conservation or Façade easements, are a voluntary method to preserve valuable resources including significant historic, archaeological, or cultural resources. Under the terms of an easement, property owners donate or sell a portion of their rights in perpetuity to a non-profit or government agency whose mission it is to protect those resources. The easement can be tailored to fit an owner’s needs and assures the owner that their property will be cared for even after a transfer of ownership. In most cases the easements are donated rather than sold. In exchange for giving away a portion of their property rights an owner may be eligible for tax benefits including reduced federal income, estate, and gift taxes. Investment Tax Credit for Low-Income Housing The Investment Tax Credit for Low-Income Housing provides a tax credit for the acquisition, construction or rehabilitation of low-income housing and can be applied to historic structures. This tax credit rewards property owners for providing low-income housing to the community. Franklin should use the Ellen Wilson Neighborhood Redevelopment project in Washington, DC as a case study for compatible mixed income housing. The Ellen Wilson Community was an abandoned public housing site surrounded by the Capital Hill Historic District. Neighborhood residents concerned about the crime and drugs at the site formed a corporation and secured a $25 million Hope VI grant to redevelop the site. The result is 134 townhouses for households earning 25% to 115% less than the area’s median income. Property Tax Abatement Property tax abatement exempts all or part of the increase in the value of improvements and personal property, except inventory and supplies. Tax abatement may begin when a city or county designates a particular area as a “reinvestment zone”–an area where private investment will promote economic development and public welfare. A property owner within the zone who makes specified improvements receives an exemption for all or part of the value of the new improvements. Property Tax Freeze An alternative to the property tax abatement program is a property tax freeze. A property tax freeze program typically provides that property tax assessments are frozen at pre-rehabilitation values for a certain period of time. During this period, taxes may increase annually due to fluctuations in the tax rate. Unlike a 100 percent abatement program, the taxpayer will pay some taxes annually during the period of the property tax freeze but will not pay property taxes on the increased value resulting from the rehabilitation of the property. The Oregon Special Assessment of Historic Property Program, administered by the State Historic Preservation Office, offers a 15-year property tax freeze on the true cash value of property listed on the National Register of Historic Places. The purpose of the program is to encourage owners of historic property to preserve or improve the condition of the property without incurring an increase in property taxes.
RkJQdWJsaXNoZXIy NTY1Mzc2