How Do Municipalities Stimulate Economic Growth In a Down Economy?

The economic recession has slowed residential, commercial and industrial development in local municipalities.  To provide developers with relief from the effects of the downturn, the Pennsylvania Legislature enacted the Permit Extension Act of 2010 providing that certain real estate development related permits and approvals, including building and construction permits, in effect as of January 1, 2009, would remain valid until July 1, 2013, now July 2, 2016.  This affords developers additional time to complete their developments.

The Local Economic Revitalization Tax Assistance Act (LERTA) is being increasingly used to foster owner revitalization through commercial and industrial development. By providing a temporary abatement (up to 10 years) of local property taxes on the value of improvements, municipalities give owners the opportunity to invest more money into improvements.  The Improvement of Deteriorating Real Property or Areas Tax Exemption Act (IDRPA) is similarly used to promote residential construction or improvement.