Mills Act Contracts
What is a Mills Act Contract?
The Mills Act is an economic incentive program in California for the restoration and preservation of qualified historic buildings by private property owners. Enacted in 1972, the Mills Act legislation grants participating in local governments (cities and counties) the authority to enter into contracts with owners of qualified historic properties who actively participate in the rehabilitation, restoration, preservation, and maintenance of their historic properties. Since the costs of doing so can be prohibitive, property tax relief can offset these costs.
This historic preservation program was adopted by Redwood City in 1990.
The minimum duration for a Mills Act Contract is 10 years. When necessary, Mills Act contracts include a schedule of proposed maintenance and improvements that the owner agrees to complete. Such proposed maintenance and improvements may be spread over a 10-year period. Mills Act contracts renew automatically every year after the initial 10-year period unless the property owner or City opts to end the contract. Mills Act contracts transfer with the property in the event the property is sold or otherwise transferred to another party. Once approved, the contract is recorded against the title of the subject property, and the information is forwarded to the County Assessor's office.
Once a Mills Act contract is approved and recorded, the property owner saves a percentage of the individual assessed tax valuation of the property. The reduction in property taxes takes effect in January of the year following approval of the contract. This property tax savings can then be used for the rehabilitation and maintenance of the historic property.
How to Apply for a Mills Act Contract
On March 9, 2026, the Redwood City City Council suspended the intake of Mills Act contract applications until an update to the City’s Historic Preservation Ordinance and Mills Act program is completed. Staff is researching and considering the following for the new program:
- Requiring active rehabilitation during the initial 10-year term
- Establishing specific 10-year contract guidelines (list of qualifying maintenance projects and/or restrictions on certain types of improvements)
- Requiring a formal renewal process after the initial 10-year contract period, ensuring additional improvements are proposed
- Requiring more frequent inspections than state law requires, which is 5 years
- Establishing a maximum property tax loss per year (including a requirement for staff/property owner meeting with County to verify potential savings)
- Establishing property value limits to apply for Mills Act (e.g. limits for single-family, multi-family and commercial properties)
- Requiring that improvements generally meet or exceed the property tax reduction
- Requiring property visibility to the public right of way and limiting obstructions, fencing, vegetation/trees
- Establishing a maximum number of contracts per year or total contracts allowed (citywide)
- Establishing fines for non-compliance
At this time, staff is not recommending any changes to the status of the City’s 41 existing Mills Act Contracts. The City Council staff report can be accessed here:
For more information or to sign up for updates, please contact:
William Chui, Senior Planner