#ab551

Summary of AB551

In short, AB551 allows for property owners to take a serious tax deduction for their vacant lots if the land is put to agricultural use. As defined under AB551,“agricultural use” means farming in all its branches including, but not limited to, the cultivation and tillage of the soil, the production, cultivation, growing, and harvesting of any agricultural or horticultural products, the raising of livestock, bees, fur-bearing animals, dairy-producing animals, and poultry, agricultural education, the sale of produce through field retail stands or farms stands and any practices performed by a farmer or on a farm as an incident to or in conjunction with farming operations. The only real restriction on the agricultural use is that it must align with your local zoning ordinances. Property owners can either (i) use the vacant lots themselves to for agricultural use or (ii) lease the land out to urban growers.

So how serious is that serious tax deduction? LA Food Policy Council broke it down for us in their handy pamphlet on the subject, which can be found here. Here’s the example they give:

Property Value: $300,000 Square Feet: 21,780 (0.5 acre) Property Taxes at 1%: $3,000 per year

After UAIZ program implementation: Property Reassessed Value: $6,350 Property Taxes Reassessed at 1%: $63.50 per year

SLG attorney Anastasia Butler (back right) with Council Member Curren Price, local growers and representatives from LA Food Policy Council after the passage of the local legislation codifying AB551

How Long Does the Land Have to Be Used for Agricultural Purposes? The plan to use the site for agricultural use must be 5 years (no more no less at this point).

How Big Does My Property Have to Be? .1 to 3 acres

Does It Have to Be a Vacant Lot? Yes!

How Do I Apply as a Property Owner or Grower a UAIZ? The owner of the vacant lot must enter into an agreement with the city of Los Angeles. That standard application can be found here. Application by the property owner should be pursued prior to entering into a lease with a third party grower.

When Do I Have to Start By? As currently drafted, AB551 has a sunset provision that property owners cannot take advantage of the legislation after January 1, 2019. In addition, Los Angeles city is requiring all property owners submit their applications by October 31, 2017 if they want to be eligible for the tax deduction in the 2018 calendar year!

If I’m a Grower, What Should I Be Thinking About If I Want to Enter a Lease with a Property Owner?

Make sure a UAIZ plan is approved and recorded with the appropriate city or county departments.

Decide on use of the land. Will you be keeping an edible vegetable garden? Doing community engagement with schools? Keeping bees? Does the landowner have any clear limitations on what you CANNOT do with the land? Provide a clear synopsis of the use in your lease with the property owner.

Make sure you are aware of all the appropriate permitting and zoning requirements before entering the lease.

Speak to an insurance provider about insurance requirements you should be responsible for.

Make sure to assess the initial working condition of the premises. Be as detailed as possible and include this in your lease with the property owner.

Decide on the appropriate form of rents and on ownership of property improvements. Remember creating fertile viable land is an improvement!

Figure out the resource requirements and limitations that exist on the property. Make sure to write these down and figure out which party will be responsible for the inclusion of infrastructure.

Make sure to record a short form lease with the county recorder.

Consider consulting an attorney for specific questions.

Check out LA Food Policy Council for all the latest updates on AB551’s progress here in the greater Los Angeles area. If you have any questions about entering into a UAIZ lease or want to learn more, feel free to reach out to the attorneys at Sustainable Law Group by calling (310) 883–7923 or emailing us at [email protected] for more information.