A measure spearheaded by Peoria area lawmakers that will extend property tax abatement to those who undertake home rehab projects in so-called urban decay areas is headed to the governor.
The existing law allows for these tax credits to be given only to people building new single-family or duplex homes in these neighborhoods.
At-large Peoria City Council member John Kelly has long worked with Peoria-area lawmakers to get the tax credit extended to home rehabilitations, too.
“For the last eight years, I've been trying to have that statute amended to include rehabs, not just brand new homes,” he said. “There are many, many homeowners in some of those neighborhoods and this new legislation would help them and hopefully help those neighborhoods.”
An urban decay area, as defined in state law, meets the state's definition of a "blighted area." That's qualified by factors like declining property values, excessive vacancies, or structures below the minimum code requirements.
Peoria has two urban decay areas, on the South Side and in the North Valley.
Kelly said the goal is to see reinvestment in these communities.
“Real estate taxes can be a real impediment to building in general, but certainly in our more challenged neighborhoods,” he said. “Real estate taxes can be a real burden. And so if we can alleviate that, at least for a period of time, and in the new statute, it's up to 10 years. This might encourage a lot of homeowners to take the plunge and do some rehab in their homes with no tax penalty.”
The tax abatement could last for up to 10 years. On a newly-rehabbed home, the abatement can't exceed the total amount of taxes attributable to the improvements. The law also would remove a current requirement for the tax break to drop off by 20% each year for the final four years of the abatement period.
The measure was sponsored by Sens. Dave Koehler, D-Peoria, and Win Stoller, R-Germantown Hills, in the Senate, where it passed with unanimous support.
“This legislation would give every resident the ability to feel proud of their community,” Koehler said in a statement. “We need to lay the groundwork for much-needed urban development and revitalization efforts across the greater Peoria area.”
Reps. Ryan Spain, R-Peoria, Jehan Gordon-Booth, D-Peoria, and Travis Weaver, R-Pekin, backed the bill in the House. It passed Thursday on a vote of 111-1.
“This legislation presents an opportunity to spur economic development and investment in our communities, particularly in older neighborhoods and areas that have experienced disinvestment,” Spain said in a statement.
The measure now goes to Gov. JB Pritzker for his signature.
Kelly said the next step will be for the Peoria City Council to amend the ordinance to allow for the city to grant the tax reductions.
