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Council approves apartment tax credit bill

The Baltimore City Council Thursday approved a citywide 10-year tax credit aimed at encouraging development of market-rate apartments after the measure was broadened to make more projects eligible.

Councilman Carl Stokes’ successful amendment specified that any building which creates 20 units with a minimum renovation of $60,000 a unit would be eligible for the credit.

Stokes, who had raised concerns about the proposed tax credit, said he felt it was necessary to specify in the bill that the credit would apply to renovations on non-commercial buildings. He said he and City Council President Bernard C. “Jack” Young on Wednesday had met with developers concerned about being ineligible for the credit.

The amendment was approved with nine members voting in favor, one against and five who abstained.

Now that it’s approved by the council, the bill goes to Mayor Stephanie Rawlings-Blake, who first proposed the tax credit in her State of the City address in February. In a statement, she praised the council vote.

The proposed tax credit would be for 10 years and would give 80 percent break on incremental real property tax increases in the first five years. The credit would be drawn down after that to 30 percent in the final year. The credit will be for new construction or conversions that create at least 20-units.

The city already has a similar tax credit in place. That credit is for 15 years and provides a 100 percent tax credit on incremental property tax for the first two years. Gradually that credit is reduced to 20 percent during the final three years. But new construction or conversion must create 50-units and is only available in downtown, Station North, Reservoir Hill, Jonestown, West Cold Spring Lane corridor, Poppleton, York Road corridor and Belair Road corridor.

Although the tax credit proposal is popular with developers, it has received some criticism.

The most vocal critic had been Stokes. He has said that he prefers an across-the-board real property tax cut as opposed to targeted tax credits. But Stokes did vote in favor of the legislation following its hearing in the Taxation, Finance and Economic Development Committee.