Blight Fund: Establishing a fund with tax revenue to address blight and dangerous conditions

A blight fund creates a dedicated source to finance blight elimination efforts and makes clear that addressing blight is a key municipal priority. Blight funds can be funded by tax revenue, fees, fines, or property sales.

What does it do?

A blight fund creates a source to pay for programs that eliminate blight and improve properties that pose a health and safety risk.

How do we pay for it?

When it creates a blight fund, a municipality must identify a sustainable source of funding that will provide sufficient revenue to finance the implementation of many of the tools described in this manual. Revenue from taxes, fees, fines and penalties, property sales, or other resources can by law or policy be directed into the fund.

What types of property are covered?

Blighted and dangerous properties.

What challenges will it solve?

A blight fund helps eliminate blight by creating a dedicated pot of money.

Where does it apply?

Any community may create dedicated funding for a blight fund.

How does it work? What is needed to use this law effectively?

A blight fund is created through a law or policy enacted by local government.

What policies and practices will increase our chances of successfully using this tool?

Municipalities can prepare residents and elected officials to approve a small tax increase or dedicate fees, fines, or penalties to a blight fund by documenting the costs that the municipalities incur from the presence of blighted properties, as well as the costs that surrounding homeowners incur, such as depressed property values and reduced quality of life. To promote transparency and accountability, municipalities will want to report to the public on how the blight funds are used.

What legal documents will we need?

Municipalities can create a blight fund as part of their budget or laws.

Who is using the tool now?

In November 2013, Mahanoy City, a borough northwest of Reading in northern Schuylkill County, adopted an operating budget that includes a two-mill increase in the real estate tax to create a blight fund. The fund will be used solely to address blight and dangerous conditions that arise in the borough. The median value of a two-mill increase in Mahanoy County is $17.39. The tax increase will dedicate approximately $47,000 annually to the blight fund.

How can we combine this with other strategies?

A blight fund can be used to finance each of the strategies outlined in this manual.