Highland Park Crafsman home. Photo courtesy Charly Kemp

As the owners of a 102-year-old Craftsman home, Charly and Janelle Kemp  are well acquainted with the charms – and costs – of their Highland Park home.  That’s why they and hundreds of other Los Angeles  home and commercial building owners have taken advantage of a property tax credit to help offset the cost of  fixing up and maintaining their historic properties.  The Kemps estimate the Mills Act cut their annual property tax bill by 75%.   “It allows to put money away to do all kinds maintenance,” said Janelle Kemp.  But, unless the city takes action, not many other historic property owners in Highland Park or other Eastside neighborhoods will be able to take advantage of those Mills Act tax savings.

The city has placed a $1 million limit on how much of its annual property tax revenue is lost to Mills Act tax credits.   In the current fiscal year,  the city’s Mills Act tax credits are expected to total about $935,000, leaving little left over for future applicants.  The city has Mills Act contracts with more than 560 property owners – who agree to maintain and improve their historic properties – and another contracts were approved earlier this month. Six of those contracts covered properties in Angeleno Heights, Highland Park and Eagle Rock.

With the city close to reaching its Mills Act tax cap, Councilman Jose Huizar, who represents Highland Park and Boyle Heights, introduced a City Council motion instructing the City Planning Department to look into “appropriate mechanisms for renewing and/or increasing the cap.”  The motion reads in part:

The Mills Act property tax relief is a powerful tool that provides an incentive to owners of historic resources to preserve their historic properties. As such, the Council needs to enact the appropriate mechanisms for renewing and/or increasing the cap to allow this powerful incentive to remain available.

Given the city’s budget crunch, it’s not clear how willing the city will be to increase the cap and forego more property tax revenue.  But the Kemps and other historic preservationists say the Mills Act tax credit has paid off by encouraging the renovation of older home and stabilizing neighborhoods.

Janelle Kemp said many new Highland Park homeowners have been renovating homes and old commercial buildings. The lack of additional Mills Act tax breaks “might dampen some of that. It would be unfortunate.”

Related Items:

  • Mills Act Historical Property Contract Program. City of L.A.
  • Mills Act funds running out for historic properties. Downtown News
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