In January of this year, Governor Wolf put forth a series of Legislative Proposals meant to address critical infrastructure problems in Pennsylvania, including blight, particularly in rural Pennsylvania. He called this series of proposals Restore Pennsylvania. Governor Wolf simultaneously proposed paying for these initiatives through the imposition of a tax on the extraction of shale gas in the Commonwealth. While many of the proposals to address the infrastructure problems were well received, the funding of the programs through a shale gas tax has been more controversial. More information on the entire Restore Pennsylvania initiative can be found HERE.
Of interest to municipalities in the Commonwealth dealing with the problem of blighted properties is the section of the Governor’s proposal that deals specifically with that issue. The Governor’s proposal acknowledged that nearly all communities within the state have some level of blight. The cost of dealing with the problem varies, with small municipalities needing funding of perhaps $1 million dollars to address the issue, while larger municipalities, such as Altoona, having concluded that they need tens of millions of dollars to effectively combat the problem. The Governor’s proposal also recognizes that municipalities are in various stages of understanding and addressing the problem of blight. While some municipalities have inventoried the blighted properties in their community and are using the tools currently available under the law to improve blighted properties, others have not yet even grappled with determining the magnitude of the problem in their area.
The Governor’s proposal provides a new funding mechanism to assist municipalities dealing with blight. The proposal creates a “Blight Demolition and Redevelopment Fund” which would be administered by the Department of Community Economic Development. Its purpose would be to provide funding to local entities for the planning, demolition, remediation, and redevelopment of blighted buildings and areas. The fund has two different components. The first component would be available to counties and municipalities that have not yet fully analyzed their blighted areas. These entry level grants could be used for: 1) the creation of land banks; 2) the development of a code enforcement program; and, 3) conducting an inventory of blighted properties. A community could receive funding of up to $25,000 for each of those three efforts, meaning up to $75,000 would be available if the community successfully applied for full funding for each program.
The second part of the Blight Demolition and Redevelopment Fund would involve the capitalization of revolving loans. The community receiving this grant could use the funds to purchase blighted property and enhance it, either through demolition or rehabilitation, and then resell the property. When the property is resold, the proceeds from the sale would be returned to revolving fund for future use toward blight removal projects. The second level of funding would be available to communities that have already successfully created land banks, developed code enforcement programs, and inventoried their blighted properties. By creating the two distinct components of the Fund, the proposal intends to aid communities at different stages in the process of combating blight.
This new proposal offers some potentially very useful tools for communities to deal with the problem of blight. Most recently the General Assembly has indicated that it will take up the entire Restore Pennsylvania Initiative proposed Governor Wolf sometime in the fall Legislative Session. Stay tuned to see how the discussion of this initiative develops. In the meantime, McNees has recently given a webinar on the currently available tools for municipalities to address blight. That webinar can be accessed HERE.
Please contact any member of the McNees Wallace & Nurick Land Use Group with questions regarding this post or for assistance with any land use issues.