What is a property tax abatement?
An abatement is a contract between the city and a developer (and then subsequent homeowners in the case of an abated condo building) that results in the building's occupants paying a "PILOT" (payment in lieu of tax) instead of regular tax. While schools receive a portion of regular property tax, they do *not* receive any of the PILOT fees. Jersey City abatements have historically sent 95% of the PILOT fees to the city, 5% to the county, and 0% to the schools. This the most direct impact that abatements have on our schools, but more is explained below.
There are two types of abatements...
- Short-term (5 year) abatements pay regular tax, but at reduced levels for 5 years (eg 20% of tax in Year 1, 40% in Year 2, and so on...until by Year 6 the building pays full, regular tax).
- Long-term (10+ years) abatements make a "payment in lieu of tax" (PILOT) fee instead of paying property tax and are typically used to incentivize the building of (i) affordable housing, (ii) market rate housing (eg rentals & condos), (iii) hotels, and (iv) commercial properties like office buildings.
The articles below detail abatements from a range of perspectives, mostly using context from Jersey City. In 2021 I was granted a Kenny Fellowship at Saint Peter's University to study this issue further; this is a topic that I plan to write more about in the future, with a wider (statewide) lens.
Jersey City Tax Abatements, Visualized from the 2023 User Friendly Budget (CivicParent work paper)
February 23, 2024
This work paper is a visual of Jersey City’s 2023 long-term tax abatements available from the 2023 “User Friendly Budget” ...
Jersey City 2021 Budget: 160 abatements on city’s books; visualizations on abatement type, value, PILOTs, and taxes if billed in full
July 26, 2021
This is part of a series on the 2021 city budget. The spirit of this series is: I’m interested in ...
Tax Abatements 801: We need better abatement disclosures in NJ to show impact on public schools
December 11, 2020
This is post included in both my abatement series and a series about the User Friendly Budget in NJ. We ...
The “User Friendly Budget”, part 5 & Tax Abatements 701 – Abatement disclosures in the UFB
December 3, 2020
Note: the visualizations below are best viewed on a computer or tablet (vs a phone). Jersey City recently announced it ...
Why the School Tax Levy is Key to Funding JCPS (and why seeking abatement funds is not a concrete solution).
January 30, 2020
I've heard "can't we go after the abatement money to fund our schools? Rather than increase the school tax levy?" ...
Jersey City: Approximately $40 Million of School Tax is Locked Up in Abatement Contracts
May 7, 2019
This is part of a series about the 2019/20 proposed municipal and schools budgets in Jersey City. Jersey City’s proposed ...
Updated: Jersey City Abatements from 2016 User Friendly Budget. Mapped by Project Type & Ward.
March 16, 2018
If you are new to the topic of abatements, I recommend my tax abatement series here including my 2015 article,”Jersey City PILOTs ...
Fulop Era Abatements Approved from 2013 to 2016
July 6, 2017
I’m sharing a new map I created that pin-drops all abatements approved since Mayor Fulop and the current City Council ...
Op-Ed Follow-Up: Get the Facts & Figures About Abatements & Public School Funding in Jersey City
May 30, 2017
I teamed up with Ellen Simon to co-author an op-ed in The Jersey Journal about how Jersey City’s PILOT policy ...
Jersey Journal Op-Ed Highlights PILOT vs. Public Schools Tension in Jersey City
May 15, 2017
I teamed up with Ellen Simon, a friend, fellow public school parent, and former board trustee of the Jersey City ...
Mapping Jersey City’s Abatements by Project Type and Ward
April 23, 2017
If you are new to the topic of abatements, I recommend my tax abatement series here. I’ve updated my 2015 long-term ...
Jersey City PILOTs Rob Funding from the School System
November 17, 2015
A strong public school system is essential bedrock to a healthy community. Yet in Jersey City, our bedrock is threatened by a fiscal ...
Mapping Abatements in Jersey City
September 16, 2015
As I explained in my last post, transparency around abatements is finally, slowly, increasing. As data is unlocked, taxpayers can ...
Tax Abatements 601: Brighter Sunshine Mandated for NJ Abatements
September 3, 2015
Tax abatement reporting in Jersey City is finally getting more transparent. Two distinct authoritative bodies have mandated changes that require Jersey City (and other cities) ...
Jersey City, We Have A Problem.
May 18, 2014
Jersey City has been estimating the cost of its abatements incorrectly for at least eight years, and the impact to conventional taxpayers ...
Tax Abatements 501: A Critique of Mayor Fulop’s “Buy Up” Abatement Policy
April 21, 2014
In my Abatement Series, I’ve discussed the basic premise of abatements, how they are funded, and the impact to conventional ...
Tax Abatements 401: The Transparency Issue
March 23, 2014
In his 2010 report, “A Programmatic Examination of Tax Abatements,” NJ Comptroller A. Matthew Boxer highlighted numerous weaknesses with abatements. ...
Tax Abatements 301: Two Sides of the Same PILOT
February 17, 2014
This is article #3 in my series about abatements. Article #1 is “Tax Abatements 101: The Basics” and Article #2 ...
Tax Abatements 201: Abatement Impact on Conventional Taxpayers
February 10, 2014
This is Article #2 in my series about abatements, which focuses on the impact abatements have on conventional taxpayers. My first post, “Abatement ...
Tax Abatements 101: A Basic Overview
January 30, 2014
A basic introduction to the topic of tax abatements in NJ ...
Let’s Get Civic
December 15, 2013
The genesis of CivicParent.org…. I live in Jersey City and on November 14, 2013 I learned that Mayor Fulop’s first ...