Understanding Neighborhood Enterprise Zones

This page will serve as the central hub for all Neighborhood Enterprise Zone (NEZ)-related information. Here you will find clear explanations, regular updates, and resources about the NEZ. Our goal is to provide clarity from the start, give context for decisions, and create meaningful opportunities for residents to engage throughout the process. 

What is a Neighborhood Enterprise Zone (NEZ)?

The Neighborhood Enterprise Zone (NEZ) Public Act 147 of 1992, as amended, provides a partial and temporary tax exemption for the development and rehabilitation of residential housing. Applications are available through the State of Michigan and any NEZ must be approved by the State Tax Commission in order to be created.

Why is the City pursuing an NEZ now?

A 2024 housing study of the St. Joseph-Benton Harbor area identified a need for 525 residential rental units and 375 residential dwelling units in the area by 2028. Over the course of the past few years, while population has declined, the number of individual households have risen in St. Joseph with smaller household sizes. NEZs provide an incentive to spur development and rehabilitation of residential housing and encourages new investment into communities and revitalization of neighborhoods.

An NEZ is a tool that can help the City:

• Reuse or improve underused properties.
• Encourage reinvestment in existing homes and residential neighborhoods.
• Create diverse and attainable living options for residents.
• Support redevelopment that strengthens nearby businesses and everyday services.
• Enhance walkability and public spaces that strengthen quality of life.
• Maintain and grow the City’s long-term l tax base over time so public services can be sustained.

How does an NEZ work?

• A Neighborhood Enterprise Zone (NEZ) provides a temporary reduction in property taxes for up to 15 years on eligible residential development located within a designated NEZ district. The incentive helps offset development costs and encourages new housing construction or the rehabilitation of existing residential buildings. are rented or leased or available for rent or lease; and
• are a mixed-use building or located in a mixed-use building that contains retail business space on the street level floor; and
• are located in a qualified downtown district (ex: DDA)

A local government must first establish a Neighborhood Enterprise Zone, finding that incentivizing housing development in that area is consistent with the master plan, neighborhood preservation and economic development goals. Establishing the district does not automatically grant a tax exemption. Individual projects must still apply for and receive approval from the City Commission before an NEZ certificate is issued.  An owner or developer must then apply for an NEZ certificate with the local government and send a copy to the State Tax Commission, who will issue the certificate if it meets all criteria. 

Applications & Resources

• Application for Neighborhood Enterprise Zone Certification

Current NEZ Projects & Updates

• The Marquette on Lake Boulevard, developed by The Rienks Group. More details coming soon.

To view upcoming Public Meetings: City Commission Meetings | Planning Commission Meetings