It has been interesting to read on the initiative that the State of California has been pushing forward regarding regarding farms in urban areas. Property owners are being provided incentives to turn their blighted/greyfield sites into urban farms. In return, the property owners are taxed at the same rate as irrigated farmland ($11,000/acre), much much lower than what they would be if a vacated building was sitting on the property.
The benefits are double sided. Not only does the property owner get a large tax break; communities are able to turn a blighted property into a green space in the city that has the ability to provide hundreds of pounds of produce to local residents and restaurants. Once the property owner is ready to redevelop the site, they are then taxed at typical municipal rates.
The requirements for a property owner are:
- City or County must have a minimum of 250,000 residents
- Property must be 0.1 to 3 acres in size
- No dwellings on site
- The property must be used as a farm for a minimum of 5 years to qualify for the tax break
I could see property owners being hesitant to go forth with this endeavor due to the 5 year minimum. Real estate property markets are continually changing, and locking a site in a dense urban area could be difficult from an investment point of view. There are likely many sites though that will not feasibly see development occur in the short term; this is where property owners could be very calculated, saving money on property taxes while looking to benefit the local community.
Read more about it at SFGate