Beaufort resident John Dickerson called the tax incentive City Council passed Tuesday night that encourages renovation of historic homes "the carrot rather than the stick."
"I think it will go a long way to improving the historic district as well as homes outside (it)," he said.
The tax incentive freezes property values for 10 years when owners undertake approved renovations worth at least half of a building's value. Called the Bailey Bill, similar incentives are already in place in cities across South Carolina, including Columbia.
It applies to buildings at least 50 years old throughout the city.
Roughly 645 of the 840 buildings in the historic district are eligible for the incentive.
Another 185 are eligible elsewhere in the city, city planner Libby Anderson said.
"We do hope people take advantage of this, especially for vacant and abandoned homes," she said. "We are really trying hard on those and this will be one more tool in our toolbox."
City staff and officials have been looking for programs to encourage property owners to fix up existing houses and build new ones on empty lots, especially in the downtown district.
One concern raised during public meetings on the incentive has been the financial burden of higher taxes that comes when a property's value is increased. The Bailey Bill is intended to offset that, officials said.
The tax freeze must be applied for, cannot be used retroactively for projects already underway, and any renovations must approved by the city's Historic District Review Board.
City Council must designate the 185 eligible homes outside downtown as historic, and a few "tweaks" are needed to city ordinances to comply with state laws, Anderson said.
The homes outside the district will only need to go through the review board for improvements if the owners want to participate in the tax freeze, Anderson said in answer to a question from Mayor Billy Keyserling about the unintended consequences of "historic" designation.
Beaufort County is considering a similar program, which would increase the financial benefit for property owners.
Follow reporter Erin Moody at twitter.com/IPBG_Erin.
- 'Bailey Bill' could help foster investments in historic homes, Feb. 1, 2014: http://bit.ly/1jqoe2R
- Public hearing, first vote on proposed Civic Master Plan set Jan. 14, 2013: http://bit.ly/1gVcrlm
- 3 Beaufort businesses look to capitalize on Waterfront Park access, March 7, 2014: http://bit.ly/1g9EnGM