Incentives Suggested to Hasten Quake Restoration : Recovery: Lawmakers are asked to offer those who invest in affected neighborhoods a tax credit of 20% of the damaged property’s purchase price.
Looking for new ways to hasten the quake recovery, Los Angeles Councilman Hal Bernson urged state lawmakers Monday to provide tax incentives for investors who put money into quake-damaged neighborhoods.
Bernson, who represents the northwestern San Fernando Valley, pitched the idea to Los Angeles-based federal and state lawmakers and their representatives who attended a meeting of the City Council’s Ad Hoc Committee on Earthquake Recovery.
Although some lawmakers were receptive to the tax incentive idea, they doubted it could be enacted in the current legislative session, which ends Aug. 31. The next session begins in January, 1995.
“I like your suggestion,” said Sen. Herschel Rosenthal (D-Los Angeles). “I just don’t know if we can work quickly enough” to get it approved during this session, he said.
Assemblywoman Paula Boland (R-Granada Hills) agreed, saying state lawmakers may be reluctant to adopt additional quake aid so soon after voters rejected a $2-billion quake relief bond act in June.
“We’ll just have to take a look, Mr. Bernson,” she told him. “It’s going to take a yeoman effort.”
In other quake-recovery actions:
* The Federal Emergency Management Agency and the Small Business Administration extended the deadline for federal quake loan applications from Sept. 16 to Oct. 17.
* Mayor Richard Riordan announced during the ad hoc committee meeting that the city will appoint an “ombudsman” to coordinate the various city recovery efforts. The various elements of the city’s recovery program, such as providing housing, debris cleanup and business assistance, are managed by several city officials. The ombudsman would keep track of and coordinate all efforts. The appointment is likely to be announced by Friday.
* A housing and community redevelopment committee recommended Monday that the city issue $24-million in bonds to give banks and lending institutions money to provide low-interest loans to buyers of apartment buildings damaged in the Northridge quake. The rates would range from 4% to 5%.
Under Bernson’s incentive proposal, investors in disaster zones statewide could depreciate damaged property over seven years instead of the normal 30 years; receive a 20% one-time tax credit on the purchase price of any damaged property and get a 100% tax write-off on the cost of all repairs to damaged property.
Because the federal and local governments cannot meet all recovery costs, Bernson said, private sector investment is vital to long-term recovery from what is now the nation’s most expensive disaster.
“We are talking about creating an investment opportunity,” he said. “The city has done everything it can in the short term. We have come to a wall, and to get over that wall we need a boost.”
Despite the skepticism that the incentive plan could be adopted soon, Bernson, who heads the recovery committee, said he hopes that Rosenthal or others could slip provisions for such a plan into existing legislation that is already close to adoption.
Bernson said he got the idea for the incentive plan from a federal program after World War II that shortened depreciation schedules to spur more housing construction. The effort worked then, he said, and should work now.
“The private sector has the money to help us recover,” Bernson told the state lawmakers.
Others attending the meeting were state Sen. Cathie Wright (R-Simi Valley) and representatives sent by Sen. Art Torres (D-Los Angeles), Sen. David Roberti (D-Van Nuys), Assemblywoman Barbara Friedman (D-Los Angeles), Assemblywoman Marguerite Archie-Hudson (D-Los Angeles) and U.S. Rep. Howard Berman (D-Los Angeles).
Bernson said he has already suggested his idea to Sen. Dianne Feinstein (D-Calif.) for adoption on a nationwide basis.
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