SALEM — City council may consider overhauling a tax abatement program on new construction or remodeling of existing structures as a means to bring in more housing.

“That’s how you grow,” Councilman Jake Gano said.

Gano brought up the idea of revisiting the Community Reinvestment Area during city council’s Economic Development Committee meeting Thursday night. He chairs the committee.

The city is currently maxed out on revisions allowed under pre-1994 state rules and can no longer revise the CRA without having to adopt post-1994 rules, which would require negotiating with the school board on percentages and length of time for the tax breaks.

Gano noted an issue with housing availability in the city and said there’s more open land for development in areas which were excluded from the last revision for new construction.

He suggested reviewing the language for the current CRA, looking at post-1994 requirements and talking with school board members about it.

Julie Needs, executive director of the Sustainable Opportunity Development Center, which handles economic development activities for the city, said there may be changes coming to the state legislation regarding CRAs.

Councilwoman Cyndi Baronzzi Dickey suggested talking to state legislators about CRA rules. Gano said they could talk to state Rep. Tim Ginter, who lives in Salem.

Mayor John Berlin showed the current map, which he said needs some tweaking, and explained the program.

The CRA gives property owners, including residential, business and industrial, a chance to build a new structure or remodel an existing structure and get a tax break on the improved value.

According to the program, a new eligible residence or business or industrial structure could receive a 15-year tax abatement on the value of the improvement.

For existing one or two-family dwellings, owners would be eligible for a 10-year abatement on a minimum $2,500 remodeling project. For multi-family dwellings or commercial/industrial structures, they could get a 12-year abatement on a $5,000 minimum remodeling.

The whole idea is to encourage property owners to invest in their properties, including landlords since there are a lot of rentals in the housing stock.

According to the last CRA revision done in 2017, the boundaries include the entire city and any future lands annexed into the city zoned commercial or industrial, with the exception of new construction in a handful of housing developments. Structures existing in those housing developments at the time of the last revision can qualify as part of the CRA.

At the time, council members didn’t want to put existing homes at a disadvantage in the market place if new construction in certain developments qualified for the tax abatement. Dickey said she’s been told the program isn’t being used much by residents and younger real estate agents don’t seem to promote it.

Needs said real estate agents are aware of the program, but also said in Columbiana, the real estate agent and builders all aggressively sell that city’s CRA program. She said it’s a great way to bring new families and young families into the city.

Berlin said he knows it works for industry.

The CRA will be discussed further at a future meeting after some research is done.