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Historic Preservation Commission proposes tax abatements, grants and demolition penalties to encourage landmarking
Summary
Staff presented a suite of financial and regulatory incentives — including city‑portion property tax abatements, rehabilitation grants, permit fee waivers and possible increases to demolition penalties — and council asked staff and legal counsel to return with draft ordinance options and fiscal analysis.
City staff presented a portfolio of incentives intended to encourage voluntary landmark designation and discourage demolition of historically significant properties.
Director Fontaine (speaker 9) described three financial tools: a property tax abatement limited to the city portion of the bill, targeted rehabilitation grants for exterior work, and permit fee waivers. Staff said eligibility would generally require a property to be a “regulated structure” (a voluntary local landmark or one that becomes regulated through demolition review) and noted there are currently 133 regulated structures in the city. “Would regulated structures be eligible for a property tax abatement without renovation or rehabilitation project in mind?” staff asked, noting the design of the program will determine scope.
In regulatory proposals, staff recommended reconsidering the code requirement that 10 properties be needed to form a local historic district; lowering that threshold (to two or three) could enable theme‑based or non‑contiguous districts. Staff also suggested zoning relief (higher FAR, reduced setbacks) to reduce functional obsolescence for landmark properties.
As a penalty/discouragement tool, staff discussed lengthening demolition delays (code currently allows a maximum of 365 days in specified circumstances) and adding a separate historic resource demolition tax on top of the existing $15,000 demolition tax that currently funds affordable housing programs. Corporation Counsel (speaker 18) said the city has legal flexibility to create a demolition tax tied to a clear nexus; he cautioned against portraying such a tax as punitive and emphasized the need for a demonstrated nexus between the tax and its intended use.
Councilmembers asked about the economics of proposed incentives. Staff estimated the city’s portion of property tax is roughly 8% of a bill; permit fee waivers are based on a 1% fee of construction cost and the staff indicated the program could set minimum thresholds for eligibility. Several councilmembers urged staff to provide more concrete fiscal modeling, including the likely budgetary impact and any caps or time limits on abatements.
Council did not take immediate legislative action; staff was asked to prepare options, economic estimates and possible draft ordinance language for further council consideration.
