“What’s my incentive?” This is one of the most common questions preservationists hear from New Jersey’s historic homeowners when contemplating designation. In some instances, these homeowners have purchased historic homes for their unique character and are ready to restore them appropriately. For others, they may have acquired their home through a family member and are seeking assistance to renovate with historic integrity. In either case, the subject of a residential tax credit invariably comes up. And although 34 states in the country have one, New Jersey does not.
There are of course incentives for commercial buildings. Between 1978 and 2015, the federal government’s Historic Tax Credit for income-producing properties allocated $23.1 billion in tax credits which led to a net gain of $28.1 billion in federal tax receipts. Last year, in New Jersey alone, 82 projects were successfully completed under the Federal Tax credit program. This proven economic revitalization tool becomes doubly attractive to developers as they can apply to both state and federal programs simultaneously.
Downtown Newark is one town where developers have taken advantage of these tax incentives with the recent renovation of the Hahne’s flagship department store. Built in 1858 and shuttered in 1987, this building had remained empty for nearly 30 years. Today it provides a shining example of a successful mixed-use property with 500,000 square feet of rental apartments and retail space that includes an upscale restaurant, coffee shop, bookstore, wine boutique and Whole Foods.
Susana Holguin-Veras, who has a degree in Architecture and a Master’s in Architectural History, serves on the Newark Landmarks and Historic Preservation Commission. “I’m thrilled about the rehabilitation of the Hahne’s Building in our downtown however I think it is shocking that New Jersey still does not have a residential tax credit” she says. “We need to give some incentive to residential homeowners to restore their property in the right way.”
In addition to being the largest city in the state, Newark is a multicultural city. Ms. Holguin-Veras strongly believes and research dictates that reducing the burden of these homeowners will benefit the entire community. She states, “Preservation goes hand-in-hand with development—and all of that goes hand-in-hand with economic development.”
During this past year, Holguin-Veras points out that as many commercial and multi-family residential projects were put on hold because of the pandemic, residential renovation exploded. “This activity creates jobs on the local level, and often for individuals with no formal education but with a wealth of expertise in home renovation and historic restoration.”
Other municipalities are taking matters into their own hands at the local level. Paul Kanitra, Mayor of Point Pleasant Beach would like to see residential tax credits be passed in New Jersey. However, he believes that preserving the historic downtown will be an incentive for residents to consider designation. He and the Town Council recently proposed a downtown Historic Overlay District. Developers who seek to deed restrict and renovate buildings constructed between 1880 and 1980 will get relief from parking restrictions, building heights and more if they work within the borough’s set guidelines.
“So much history has been lost at the sake of maximizing square footage,” says Kanitra who grew up in the Borough. Once he came into office last year he realized that Point Pleasant Beach has never had a forward-looking plan for future development nor preservation. He asserts, “From a Capitalist perspective, renovating these buildings brings in foot traffic, increases rents, and raises up the entire community.”
Mayor Kanitra is most proud of saving the Gottlieb Building. “When I came into office last year, it was just days away from the wrecking ball,” he recalls. He worked with private investors to not only save and restore the 1906 building, but now has plans to reopen it as a community marketplace where local artists, chefs, horticulturists, and other vendors can launch their individual businesses.
In addition, the Town is creating an historic plaque program that they will be giving out to both residents and commercial properties with QR codes that detail historic pictures and walking tours. “We want to find a way to create buy-in and incentivize the residents to do the right thing. The goal is to preserve the vintage character of the downtown and jumpstart the future character of the Borough.”
Westfield is another municipality that has gotten creative on the local level. Mayor Shelley Brindle has been focused on providing incentives for residents to voluntarily designate their historic homes. Brindle says, “For residents that designate their qualifying homes, they can take advantage of the Town’s recently passed ‘area in need of rehabilitation designation’ which allows for The Five Year Tax Exemption and Abatement Law to apply to the value of improvements they make to their home, which can be costly for some historic properties.”
In absence of state tax benefits, mayors who value the historic character of their towns have to take matters into their own hands to the degree the law allows. “Our residents understand the importance of maintaining the historic character of our neighborhoods but are understandably concerned about the potential financial burden of maintaining a locally designated home,” says Brindle. “This tax abatement is meant to address these concerns while not impacting the overall tax receipts of the Town.”
Do you know a town that has gotten creative with tax incentives for historic preservation? Are you interested in advocating for residential tax credits? Reach out to us at email@example.com.
Maria Boyes is a journalist who has written for newspapers across the country and penned a column in the NJ Courier News for several years. As a member of Preservation New Jersey’s Marketing Committee and Chair of the Westfield Historic Preservation Commission, Maria values historic architecture.
She and her husband, Jim, live in a Victorian where they spend their free time, when not working on their home, volunteering for various organizations within their community.