Municipal Redevelopment Areas
The purpose of New Jersey’s Local Housing and Redevelopment Law (N.J.S.A. 40A:12A) is to rebuild or restore areas or structures currently in a measurable state of decline, disinvestment or abandonment to a productive condition or use. Redevelopment may involve residential, commercial, industrial or civic uses. Redevelopment may also include rehabilitation, or the extensive repair, reconstruction or renovation of existing structures to eliminate substandard structural or housing conditions.
Redevelopment areas are designated by municipal governing bodies and approved by the New Jersey Department of Community Affairs. They may involve a single property or many contiguous properties. To date, 30 municipalities have designated more than 80 redevelopment areas in Burlington County. There is at least one redevelopment area in the following municipalities:
Edgewater Park Township
Maple Shade Township
Mount Holly Township
Mount Laurel Township
||North Hanover Township
for a map showing the location and extent of municipal redevelopment areas in Burlington County.
Municipalities may offer financial incentives to redevelopers to encourage the type of new development prescribed in a redevelopment plan:
1. Long Term Tax Exemptions
May be granted to for:
- Redevelopment projects;
- Projects for the relocation of residents displaced by redevelopment, and
- Low-and moderate-income housing projects.
May be provided for a period up to 30 years from the completion of the projects, or not more than 35 years from the execution of the financial
agreement between the Municipality and the Urban Renewal Entity.
Applies only to the value of new improvements constructed as part of a redevelopment project, and not for previously constructed buildings or
improvements or the value of the land.
In order to obtain an exemption, an Urban Renewal Entity is required to submit an application to the Municipality, which must be approved by
resolution of the Governing Body.
Urban Renewal Entities may be either nonprofit corporations or limited-dividend entities with profits capped at 10%.
Instead of paying local property taxes, an Urban Renewal Entity receiving a long-term tax exemption pays an annual service charge to the
Municipality as a “payment in lieu of taxes” (PILOT). PILOTs are established as part of a written agreement between the Municipality and the
designated redeveloper and are calculated in either of 2 ways:
2. Short Term Tax Exemptions and Abatements
- A charge up to 2% of the total project cost (TPC) OR
- A percentage of the project’s annual gross revenue (AGR) of no more than 15% for low- and moderate income housing projects, no less than 10% for office projects, and no less than 15% for all other projects
May be granted for up to a 5-year term in for the following redevelopment activities:
- Improvements to existing housing;
- Construction of new housing;
- Conversion of non-residential buildings, including hotels and motels, to multiple dwellings; and
- Improvement or expansion of commercial or industrial structures.
Municipalities must adopt ordinances permitting short-term tax exemptions and abatements. There are no limits on ownership or restrictions on
profits. Terms and procedures for submitting for such applications must be in the ordinance. Written financial agreements are required for multi-
family and non-residential uses.
Exemptions may be granted from the property taxes on all or a portion of the added assessed value that is generated by any improvement,
conversion, alteration or new construction.
- Multi-family housing: all or a portion of the increased assessed value generated by any improvements, or alterations for conversions
- Other housing: either the first $5,000, $15,000 or $25,000 of the increased assessed value
- Commercial and industrial uses: all or a portion of the increased assessed value generated by any improvements
Abatements are reductions in taxes granted to residential and multi-family uses for the portion of the assessed property value prior to the above
redevelopment activities. For residential uses, abatements cannot be more than 30% of the annual exemption amount; for multi-family uses no
more than 30% of the cost of any improvements, or alterations for conversions.
Municipalities may also offer financial assistance to redevelopers to encourage the type of new development prescribed in a redevelopment plan:
- Make loans or other financial assistance to Redevelopers
- Provide capital grants to Redevelopers.