Expanding the number of residents living downtown is critical. Each new resident that the City can get to live downtown increases the total number of dollars that will be spent downtown. With more residents spending dollars downtown, the kinds of retail offered will diversify and expand. A more diverse client base downtown (that includes new residents) will give downtown retailers a better opportunity to capitalize on the thousands of employees who come to Trenton every day. More retail will make downtown an even more attractive place to live, which will in-turn attract new residents to downtown. At the same time, incentives to increase residential construction downtown will support efforts to create a creative district while making the area more attractive to anchor institutions.
In the Housing Report, the City has identified two priority investment areas for downtown: the Downtown Core
and the Old Trenton Neighborhood.
Priority Investment Neighborhoods are unique because of their building assets, location, existing amenities, and/or the existence of successful revitalization efforts. Moreover, these areas have the market conditions to change relatively quickly and are likely to have a significant impact on the housing market if they become successful. As such, initiatives focused on these areas are intended to attract new development, often with the aid of subsidies. These housing initiatives will be critical elements of the economic development strategy for downtown.
To support these housing initiatives and meet its downtown economic development goals, the City must concentrate its economic development efforts on facilitating the process for developers to invest in market-rate rental housing downtown while promoting the downtown lifestyle to prospective and current residents. Two key state incentive programs that may significantly support this initiative are the Economic Redevelopment and Growth (ERG) Program and the Real Estate Impact Loan. The ERG Program provides up to a 40% tax credit for new construction, which includes residential and mixed-use construction. This is a major development incentive that might help offset the costs of developing in Trenton and ensure that market rate housing can be provided at a cost attractive to prospective and current residents. The Real Estate Impact Loan is available for mixed-use project (minimum 20% commercial) but not all-residential projects. Applicants get 3% financing up to $3 Million, and 25% of project costs and funds can be used to cover property acquisition, assemblage, demolition, environmental remediation, and on-site infrastructure, among other uses. As a result, this funding is ideal for mixed-use projects in the downtown that will require significant rehabilitation or in which new construction will require that existing buildings are demolished, or the site needs to be remediated.
At the same time, the City must leverage the powers and incentives that are granted to it through the Redevelopment statutes. This includes the ability to acquire property and to provide additional tax incentives, including 30-year tax abatements. Combined with the Home-Owner Assistance Program and Live Where You Work Program, the City can stimulate new residential construction downtown.