Tax Credits for Urban Farmers

Cities are offering tax credits and other incentives to residents interested in building and maintaining urban farms. See what requirements must be met to qualify

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What Happened?

San Francisco has created a financial incentive to encourage the development of urban farms: tax credits. Under California law, cities are able to create tax incentive programs to fuel urban farming so more residents can participate at minimal cost.

Goal

In 2013, California lawmakers passed Assembly Bill 551 authorizing cities or counties to enter 10-year contracts with landowners interested in developing urban farms. The agreements call for property owners to maintain an urban farm of at least one-tenth of an acre, and in return the city or county will offer tax credits.

Under the San Francisco program, landowners must:

  • Acquire a permit
  • Repurpose blighted land
  • Keep the urban farm active for five years
  • Create a community outreach program

San Francisco officials will assess the property at the average price for irrigated farmland which is $12,500 per acre in the city. In doing so, many landowners will see a drastic reduction in their property tax rate for the urban farm, NPR reported.

With regard to the community outreach requirement, the urban farm must:

  • Sell or donate produce grown on the land to local residents
  • Offer school tours or other educational benefits
  • Serve as a community-run garden space

Organizers of the tax incentive program hope it will increase access to locally-sourced produce and raise awareness of how food is grown and acquired by urban dwellers.

Sacramento Ordinance

Elsewhere in California, Sacramento has proposed an Urban Agriculture Ordinance that will alter city zoning regulations to support the development of urban agriculture projects. The ordinance would allow urban farming as a primary land use on vacant property in residential, commercial and industrial zone. Small produce stands would be permitted as a secondary land use, as well as utility structures to support urban farming. Examples of urban agriculture projects include:

  • Vegetable gardens and edible landscaping
  • Community gardens
  • Market gardens to produce cash crops
  • Aquaculture and aquaponics
  • Hydroponics and vertical farming
  • Urban beekeeping

The ordinance was designed to promote access to locally-grown produce, provide business opportunities, improve public health and wellness, and repurpose underutilized land for economic growth.

DC Tax Break

Officials in Washington, D.C., have proposed the D.C. Urban Farming and Food Security Act to make it easier for urban farmers to repurpose vacant lots into sources of locally-grown produce. The bill would connect unused public and private land with urban farming projects by eliminating higher taxes on blighted land. The act calls for:

  • At least 3-year leases
  • Applicants with one-year of farming experience
  • Farmers be residents of D.C. for one year

Private landowners could enjoy a 50 percent property tax reduction if the property is leased out for urban farming. The farms are then encouraged to donate food to local food banks or homeless shelters through “farm to food donations” tax credits. Proponents of the bill hope it will transform unsafe areas into thriving green spaces, while nurturing a sustainable, affordable, source of healthy foods.

Enabling Urban Farms

Gov1 has reported different strategies to make urban farming easier by removing preexisting barriers.

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