Over the past three + years if not longer, we have talked about a Philly Plan that would lock in the current assessed value for a stipulated period of time for commercial development. Locally this was done with the Hanover, when the assessed value was locked in for ten years. It sounds great on paper, but it is not as easy as it sounds to get done:
- Economic Development meetings
- City Council approval
- Home Rules petitions through the State House.
About a year ago, I read about new legislation that was passed for Gateway Cities called the HDIP (Housing Devlopment Incentive Plan)that was targeted to promote market rate housing project (2 to 50 units) and would allow cities to:
- “lock-in” or “phase-in” asssessed values over a stipulated time
- State tax credits for each unit up to $10,000.
The great thing about the HDIP is that the City of Worcester only had to:
- apply listing an area that they want to establish as an HDIP zone
- explain how that area qualifies
- what type of incentives the City of Worcester would be providing.
DHCD reviews the application and if all is in order, we are good to go. That’s it!!! In fact, at that time 6 other cities had already had HDIP’s approved (Haverhill-Springfield-Chelsea-Holyoke-Lowell-Pittsfield). The Chandler Business Association decided to make Worcester the 7th and working with City Manager O’Brien, Economic Development and the Chamber of Commerce an application was assembled, Council approved it, submitted it to DHCD and then approved.We did it! This is a great example of groups can work together to make great things happen relatively fast.
Today the City of Worcester has an HDIP, a zone to promote market rate housing (2 to 50 units) that will provide property tax break locally and tax credits at the state level. I have heard many people say why didn’t do this or why didn’t we do that? We could only apply for what has already been approved under the HDIP legislation; for example, commercial property is not the goal of the HDIP. We can still pursue the “Philly Plan”, but it will take alot of work while the HDIP was already approved and only had to be adopted. At the same time, I would argue market rate housing development downtown would benefit all commercial property owners. Keep in mind there are also many properties that may have a first floor component that is commercial but has residential unites above that can qualify for the HDIP.
More importantly developers of “affordable” housing will not be able to reap the benefits from the HDIP. We are leveling the develop field between “affordable” and “market rate” housing with the approval of the HDIP. Hopefully this will attract market rate housing to the areas targeted in the HDIP, which is desperately needed.