Key State RolesEnact Enabling Legislation to Authorize Local Action
State control over municipal activity falls along a spectrum: at one end, states that actively enforce the "Dillon Rule" allow municipalities only the powers that are explicitly granted to them by the state legislature (in addition to those that are considered essential
for the municipality to function). At the other end of the spectrum, Home Rule states give municipalities the authority to govern their own internal affairs (subject only to the restrictions and limitations specified in the state constitution or any state statute). In practice, most states adopt some hybrid of these two approaches, making it essential that states provide appropriate enabling legislation to authorize needed local action to expand opportunities for the development of affordable homes.
Well-designed enabling legislation: (a) ensures that state law does not pose a barrier to the enactment of important local tools for promoting affordable housing, such as tax abatements, tax increment financing, and inclusionary zoning; (b) reduces the likelihood that the policies that localities adopt will be vulnerable to court challenge; and (c) helps to reduce the learning curve for municipalities by specifying one or more sound program variants for their consideration.
For example, through the New Hampshire Community Revitalization Tax Relief Incentive, municipalities have the authority to grant temporary tax abatements to property owners who substantially rehabilitate buildings located in a village center or downtown district.
See also:
- Tennessee Tax Increment Financing (TIF) Enabling Legislation [PDF] authorizes local housing authorities to acquire properties in blighted areas and establish TIF districts to promote redevelopment. The state also has a sales tax revenue TIF program that can be used to finance tourism-related public facilities such as stadiums and convention centers. Click here to view more state TIF state statutes, collected by the Council of Development Finance Agencies.
- Virginia Inclusionary Zoning Enabling Legislation -- Fairfax County, VA adopted one of the country's earliest inclusionary zoning policies, but it was struck down by state courts in part because the state had not explicitly granted local authority to adopt an IZ ordinance. In 1989, the Virginia code was amended to address this objection, specifically allowing local jurisdictions to pass IZ ordinances.
- Pennsylvania's Act 137 authorizes counties to increase document recording fees to raise additional funds for affordable housing.
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