The Greater Ohio Policy Center, in partnership with the Lincoln Institute of Land Policy (LILP), has been studying statewide policies that support legacy cities in addressing weak-market neighborhoods. The Pennsylvania Neighborhood Assistance Program (NAP) provides tax credits in return for financial contributions that support programming and projects serving low-income residents or distressed neighborhoods. The NAP helps aggregate corporate contributions and donations to incentivize revitalization in the state’s previously disinvested communities.
Administered by the Department of Community and Economic Development (DCED), the program is open to non-profit and neighborhood organizations that serve areas with weak markets and low-income populations. NAP eligible projects must include affordable housing, community economic development, community services, education, neighborhood assistance, neighborhood conservation, crime prevention, education, and job training.
Applicants must meet NAP guidelines and submit a narrative that details the project, place, problem, and outcomes that the tax credit equity will support. Applications are reviewed and ranked by DCED and provided to the Secretary of the Department, who recommends what projects receive tax credits and the amount to allocate. If approved, tax credits are available to donors who contribute to an approved organization’s projects.
Pennsylvania’s NAP was one of the first tax credit of its kind in the country, enacted to “benefit impoverished areas.” First established in 1967, the program was strengthened by the state legislature in 2006, increasing the tax credit rates, expanding eligibility, and raising the maximum credit amount to $500,000 for a single project. The 2006 improvements also approved the sale or transfer of unused tax credits. From 2012 to 2018, DCED awarded over $104.2 million in tax credits, and corporate contributions leveraged over $303.2 million total funds. In 2019, the State of Pennsylvania doubled its NAP cap from $18 million annually to $36 million for the 2019-20 fiscal year. Fourteen other states administer a similar tax credit program.
Image credited to PA Department of Community & Economic Development
The Neighborhood Assistance Program helps break down silos that exist between the public, non-profit, and private sectors to inspire collaboration. NAP has increased resources and capacity for critical programs that help stabilize and revitalize communities across the state, demonstrating how states can provide economic incentives to engage the private sector in partnering to revitalize target areas of need.
To learn more about NAP in Pennsylvania, visit the PA Department of Community and Economic Development website: https://dced.pa.gov/download/neighborhood-assistance-fact-sheet/?wpdmdl=84816
Cover photo courtesy of Katherine McAdoo on Unsplash