Carlsbad is considering adding incentives for participation in its Mills Act program, which offers tax advantages to encourage the preservation of historic homes.
The city created the program in 2022, but so far there have been no takers. Dozens of other cities across California, including Oceanside and San Diego, have similar programs based on a 1976 state law that allows tax advantages for the owners of qualifying properties.
Participants can save 40% to 60% on their property taxes if they sign an agreement with the city to preserve, rehabilitate and maintain the historical and architectural character of their property.
Properties at least 50 years old are eligible, with some exceptions. Each initial agreement is for 10 years and is automatically renewed annually unless the owner or the city gives notice not to renew.
Carlsbad received two applications for the program in 2023, said Mike Strong, assistant director of community development. However, both applicants dropped out for reasons including the costs of participation. None applied in 2024.
“Currently, the Mills Act program application fees (charged by the city of Carlsbad) are $4,211,” according to a city staff report. “Most property owners find that the fees are too high for an incentive that may or may not be granted. In comparison, fees charged by many other local governments range from no fee at all, or around $2,000.”
Subsidizing or reducing or waiving the fees could be one way to increase participation, Strong said Wednesday at a meeting of the city’s Historical Preservation Commission.
Other ideas include reducing or simplifying the paperwork required for applications, updating information on the city website, and increasing marketing and educational programs, he said.
The commission unanimously supported forwarding a resolution to the Carlsbad City Council recommending the improvement and expansion of the city’s Mills Act program.
A 1991 survey showed Carlsbad had between 300 and 400 properties eligible for historic status, Strong said. Since then some have been demolished or have been modified in ways that make them no longer eligible. However, others become eligible as time passes.
The Mills Act has been recognized as the state’s single most important economic incentive for private property owners to preserve and protect historic buildings.
