Areas in Need of Rehabilitation The successful redevelopment of an area does not always have to involve the acquisition, clearance and assemblage of multiple properties for new buildings and uses. The rehabilitation of existing buildings and properties can be as important to the implementation of a redevelopment plan as any other redevelopment project. In such cases, the designation of an "Area In Need of Rehabilitation" (rehabilitation area) may be the best option. Many local governments considering redevelopment are unaware that an alternative process exists, namely the designation of a rehabilitation area, that provides all of the powers of redevelopment save one: eminent domain. While the rehabilitation area is not often used or even thought of by municipal officials as an option in the redevelopment process, it has definite applications to both neighborhood revitalization and economic development. If the need to condemn private property is not a necessary action step in implementing a particular redevelopment plan and the principal activity will be rehabilitation and infill construction, the rehabilitation area designation should be adequate. Because there is no power to condemn private property attached to the rehabilitation area designation, the statute does not require a public hearing, which is a distinct procedural advantage of the rehabilitation area process over the redevelopment area process. Designating a Rehabilitation Area The designation of rehabilitation area is much simpler than designating a redevelopment area. However, the findings work a little differently. A rehabilitation area can be designated by resolution of the governing body without the prerequisite of an investigation and public hearing by the planning board. Rather than making a finding that the "generality" of properties meet one or more of the a-g statutory criteria, the governing body must find that the rehabilitation area meets the following three criteria: There are a significant portion of buildings that are in a substandard or deteriorating condition, and there is a continuing pattern of vacancy, abandonment or underutilization of properties in the area with a persistent incidence of property tax arrearage; OR More than half of the housing stock in the delineated area is at least 50 years old, or a majority of the water and sewer infrastructure in the delineated area is at least 50 years old and is in need of repair or substantial maintenance; AND A program of rehabilitation may be expected to prevent further deterioration and promote the overall development of the community. While the LRHL does not require an investigation or that that the designation be based on a map or statement of findings, it is advisable that some support for the required determinations described above be attached to the governing body resolution. For example, the determination that the proposed rehabilitation area suffers from substandard or deteriorated buildings, and a pattern of vacancy and abandonment with a persistent pattern of property tax arrearage, can be substantiated by a copy of the tax map for the area marked to identify substandard and vacant properties and properties under foreclosure, with tax liens or with serious delinquency (we normally use four tax quarters or more). The new criteria regarding the age of housing stock and infrastructure can be documented through Census housing data broken down to the Census Tract or Block Group level or records of the water and or sewer department or utility. Why Designate A Rehabilitation Area? Generally the principal reason for designating a rehabilitation area is to use the short-term (5-year) property tax exemption as a tool to encourage investment in rehabilitation activities. For example, a neighborhood with an aging housing stock occupied by households with fixed or low incomes may suffer from deferred maintenance that results in such problems as broken leaders and gutters, missing siding, leaking roofs, faulty heating or electrical systems, missing or absent stair railings, etc. These physical problems deteriorate from being cosmetic to potentially dangerous structural defects if not corrected. However, where property taxes are high and incomes are limited, owners who are otherwise able to afford to make the repairs, improvements or otherwise rehabilitate their homes may not be able to handle the increased property taxes that will follow. The same scenario can cause a cycle of decline in business areas as well where rent levels do not support the level of investment necessary to both carry the property taxes and maintain commercial buildings, not to mention the cost of facade and site improvements. A broader use of the rehabilitation area might be in support of a neighborhood revitalization effort. A municipality may own a number of vacant lots through tax foreclosures and the opportunity for a coordinated infill project exists. The municipality could designate the neighborhood as a rehabilitation area and develop a simple redevelopment plan that calls for the transfer of the vacant municipal lots to one or more developers pursuant to a redeveloper agreement for the construction of new infill housing. The redevelopment plan may also identify such properties for related neighborhood uses such as playgrounds or community gardens. The redevelopment plan would have the same components as one done for a redevelopment area, and could serve as the sole source for land use and development requirements, design standards and recommended public improvements for the neighborhood.