City Manager: First residential revitalization-zone application raises eligibility question

City Manager Elizabeth Berlett told listeners the city recently held a public hearing on its first application under a newly adopted residential property revitalization zone, a state-authorized tool that can defer increases in property assessments for qualifying residential redevelopment.

Berlett said the zoning tool works similarly to RSA 79‑E-style mechanisms by allowing applicants who increase housing units to seek deferral of some tax assessment increases. "So this is the 1st 1," Berlett said, describing the application as a useful test case for the council to interpret the new law.

The central eligibility question raised at the hearing is whether a qualifying project must be under four units before construction begins or under four units after the project is complete. Community development staff have interpreted the statute to require the property to be "under 4 units" to apply; the project discussed would yield five units after completion, creating a potential barrier to eligibility.

Berlett said the application will be reviewed by the committee, which will make a recommendation to the full City Council at its next meeting. If the council approves the committee recommendation, the council will later vote on the specific number of years and tax-deferral terms if it proceeds.

The episode framed the matter as an early test of the city’s new tool to encourage housing development and noted that additional guidance or a council decision may be needed to resolve the interpretation before similar projects seek benefits under the program.