Designating all of South Orange in Need of Rehabilitation - Good or Bad?

i read this and wondered if the construction trade in SO now have lobbyists

all for tax relief but this could be a nightmare if applicable to all home owners - i thought the current program was focused on select areas/situations in need and require incentives.

Has there been an analysis of the $ impact of lost tax revenues if this passes?  

Does this mean that every home owner in SO would be eligible for a continuous automatic PILOT if they made home improvements every five years?  Would the "discount" apply only to the value of the improvements made to qualify, to the entire improvements portion of the real property assessment only, or to improvements + land value?"  Would a structure have to be 50 years old or older to qualify?  What inspection/valuation/ approval process, if any, would be required and if one is required, what would be the administrative cost associated with this program?  Would there be income limitations for eligibility?  If this did work like a PILOT, what would be the impact on the school budgeting process and on the school taxes paid by everyone who did not take advantage of/qualify for this program?

new207040 said:

Has there been an analysis of the $ impact of lost tax revenues if this passes?  

 This DID pass - back in March.- unanimously and will little public discussion.

From my scant understanding of the subject, I think it may make the town more eligible for certain state and federal grants.

@joan_crystal, you sound like you may be hyperventilating, so maybe take a deep breath.

The entirety of South Orange has had a property tax exemption on the books, since 2002, http://ecode360.com/11369895#11369895.  So, while it's fine to start discussing this idea after 13 years, it's old news.

Because the exemption is capped at $25,000 of increased assessed value and our effective tax rate is ~3%, the maximum benefit to a taxpayer is only ~$750 annually for five years.  And, since the Village's share of taxes paid is ~26%, the direct impact to the Village is ~$200 per year.  However, a property owner can apply for multiple exemptions.

Under the new law, it sounds like the exemption for improvements declines 20% per year, from 100% to 0%.  So, it essentially averages 50% over five years.  Using the same math, the benefit to property owners will average $375/year and it will cost the Village up to ~$100 per year for five years (starting at $200 and declining to $0).

BTW, none of this matters if the Tax Assessor doesn't re-assess your property for improvements that you've made, which I'm guessing doesn't happen too often.

As to whether the Village has the interest or bandwidth to start to "exercise architectural control over the specific layout, design and appearance of any improvements.", it doesn't even have the interest or bandwidth to uphold its codes that have been on the books for decades.  But, this is a fair topic to discuss, if the new ordinance actual permits this.

ETA: With the implementation of this ordinance, I'd like to know all candidates' positions on adding mosaic backsplashes to kitchen counters and their feelings about whether hardwood floors are suitable for bedrooms.

Under NJ statutes, an area designated in need of "rehabilitation" is materially different than an area designated in need of "redevelopment".  While many aspects are the same, including eligibility for government assistance, a municipality cannot use eminent domain as a catalyst for improvement in an area designated in need of rehabilitation -- only in one in need of redevelopment.

http://villagegreennj.com/towns/government/south-orange-township-defends-town-wide-rehabilitation-designation/

cramer said:

... Not mentioned, but what would be included is the area west of the trestle on South Orange Ave., including the properties at South Orange Ave./Church St., which have recently been transferred to a new owner.  ... 

Intriguing. That corner is simply appalling, an embarrassment that makes downtown look like a slum when you approach from the west.

Who are the new owners, and are they real? I hope it's not another real estate shell game and there's actually someone there who is going to be a responsible landlord.

@tom I totally agree, and will be really pleased to see that corner turn around. There's been such great development on the other half of the block, between Falafelly Yours and Tito's opening up and the Gateway construction.

That building should be coming down shortly and on the short term leveled for use as a PA parking lot.  The developer of the Gateway owns the property.

cramer said:

Any proposed development in these areas would still have to go through the Planning Board process. The designation as rehabilitation areas does not change the zoning, nor does it automatically grant a tax abatement. 

 That is technically true. I would caution to consider all intended and unintended impacts from the rehab designation.  A rehab designation is more likely to attract developers who may be granted redeveloper status for specific site. In this scenario, the developer can essentially re-write the zoning from scratch. This would still have to go through the Planning Board.  

The alternative "normal" scenario is a developer has to go through the Zoning board and request multiple variances to change zoning.  This scenario has a higher threshold, and makes zoning changes more difficult to achieve. 

So Barry Lewis can say that "The Board has never suggested or considered these tools for residential neighborhoods, and has been clear that this is directed at the Irvington Avenue and Valley Street commercial corridors..." ** and it's technically true.

But the reality is a rehab designation does make it more likely that more extreme zoning changes will be proposed by developers. The proposal for high density apartments in Seton Village , for example, does in fact include zoning changes in a predominantly residential neighborhood.  With the town-wide rehab designation, the threshold for this proposed change to zoning is lower than without the rehab designation, and that may carry unintended consequences. 

**(quote from Village Green article) 

Thanks for the update, Howard. Sounds like a good short-term plan.

levisonhw said:

That building should be coming down shortly and on the short term leveled for use as a PA parking lot.  The developer of the Gateway owns the property.

 "Shortly" means something different in South Orange.  Welcome back to the "Coming Soon" era.  Article from 6 months ago:

http://villagegreennj.com/towns/government/developer-buys-long-vacant-church-st-lot-downtown-s-orange/

Village Trustees and Ayuso will hold a ceremonial groundbreaking on Wednesday, Oct. 8 at 11 a.m.  The buildings will be demolished sometime within the next two weeks, said Lewis.

Nice catch Michael.  I wonder what sweetheart deal the village will give the already owner of the property to develop it.

Interesting article:  http://www.bloomberg.com/news/articles/2015-05-05/nyc-s-biggest-housing-boom-is-far-from-manhattan-s-condos

There are a lot of apartments coming online in both NJ and outer boroughs of NYC. A lot of competition and options for folks who are leaving Manhattan but want a 45min commute. It's very important to develop South Orange in a responsible way, to avoid too much capacity coming on line, which can have very bad consequences especially during times of economic downturn.

I called the tax assessor a couple of weeks ago and was told that there's no five-year abatement. So now I'm really confused. 

Rehab=5 years

Redev=30 years

Reba=60 years

But for homeowners, nothing.

Wasn't/isn't there something on the books for a temporary abatement of up to $25k in improvements?  Granted, if so, that wouldn't amount to a whole hell of a lot, and I suppose there's a potential wallop after five years, but still.  Anyhoo, maybe cramer or someone else far more familiar with SO ordinances can opine.  

There had been either an ordinance or a resolution that South Orange adopted every five years which allowed a five year tax exemption for improvements up to a maximum of $25,000. The was adopted pursuant to an enabling statute in the NJ statutes which was in different section of the NJ statutes than the provisions dealing with an area in need of rehabilitation. Under the enabling statue, a municipality had to renew the provision providing for the tax exemption every five years. The particular statute which SO adopted the five year exemption dealt with distressed cities and towns. There was a complete five year exemption, and no payment of taxes at all during the five year period. South Orange has not renewed the exemption. SO had the exemption in place for at least 20 years.

If SO chose to do so, it could either adopt a five year exemption the same as that which had been in effect, or provide for a five year tax exemption under the areas in need of rehabilitation provisions in the NJ Statutes. I'm not convinced that SO should do, since if people are paying the prices that are now being paid for houses in SO, and carrying out improvements without the exemption, an exemption doesn't seem necessary to provide an incentive. Twenty years ago it might have made sense. Surrounding towns don't have the exemption for homeowners. 

eta - I just did a remodeling job, and I'll probably be hit with an additional assessment. 

In 1998, I updated a kitchen and got hit with an additional assessment. I hadn't even been advised of the five year tax exemption. I only found out about it two years later when I spoke a a BOT meeting requesting a revaluation and mentioned the additional assessment. No one on the BOT that evening mentioned the exemption. I only found out about it the following day when I saw a trustee downtown. 

I went into the tax assessor's office and criticized the tax assessor for not even alerting me to the fact that I had never been advised of the tax exemption. As a result, the procedure was changed so that  additional assessments that went out after that advised people that they might be eligible for a tax exemption.

So I can only assume that the tax assessor didn't properly understand my question.

annemarie said:

So I can only assume that the tax assessor didn't properly understand my question.

I assume she thought you were asking if there is at present a five-year tax abatement in South Orange.  There had been one, but it is no longer in effect. 

I figured I couldn't go wrong by punting over to you. 

Thank you.

I will be sad to see the old house on Valley get razed (across from the Portuguese restaurant). Close to 150 years old, it is a link to South Orange's beginnings. Is it beyond repair, or just sitting on valuable open space?

Henry

OhHenry said:

I will be sad to see the old house on Valley get razed (across from the Portuguese restaurant). Close to 150 years old, it is a link to South Orange's beginnings. Is it beyond repair, or just sitting on valuable open space?




Henry

It's been empty for years, stripped of any valuable fixtures, AND it's a big piece of property. So I would think a little of both.