Independence leaders want to spur residential reinvestment in the southwest portion of the city, and they say a tax incentive offering for some homeowners can do the trick.
The City Council on Monday unanimously approved the Southwest Independence 353 Redevelopment Plan, which designates the area as blighted and allows some property to receive property tax abatement on certain improvements.
The redevelopment area is bordered by Sterling Avenue on the east, 23rd Street on the north and the city limits on the west and south – mainly Blue Ridge Boulevard and U.S. 40. Primarily, the plan targets residential properties valued below the city's average. According to regional housing studies, the city's median home value is $109,600, and in this southwest area median values range from $80,300 to $97,200.
Abatements will last for seven years, and the city will take applications for 10 years.
While some areas in the metro lack affordable housing in general, other areas have an abundance of affordable housing that is older than the average (60 to 80 years old) and could use a spruce-up, such as a new roof, windows and paint or remodeled room. Southwest Independence falls into that latter category, and it still maintains about two-thirds owner-occupied residency. However, blight conditions such as deteriorating sidewalks and driveways, property maintenance violations and crumbling structures have become more prevalent.
The city has employed 353 plans before, particularly in the northwest portion of the city, and it's led to some pockets of reinvestment.
To date, it's not as if the city has property owners lined up waiting to take advantage of the abatement opportunity. But Council Member Tom Van Camp, whose district includes the redevelopment area, said officials lined out this particular area because they believe it has plenty of opportunities for homeowners.
“This fits the bill better,” he said, adding that city staff studied the matter intently “and decided this was a good fit.”
“We were pretty selective about picking this area,” City Manager Zach Walker said. “We're starting to see some of those tipping points where maybe people are looking to sell their home.”
Van Camp said the city will need to make people aware and educate them.
“We've got to be active,” he said. “We can make people aware when they do permits.”
This 353 plan has a three-tier tax abatement system, and in all cases, abatements last seven years. Taxes on the underlying land are not frozen:
• Tier 1 requires an investment of at least 10 percent of the property's current market value (as determined by the county) at the time of application to receive abatement on improvements.
• Tier 2 requires at least 25 percent investment to receive abatement on 25 percent of the improvements.
• Tier 3 requires investment greater than or equal to the current value, and the final result must be reconstruction or new construction, to receive full abatement on improvements.
Council Member John Perkins said it will be similar to the city's previous 353 plans in the northwest, just with a different structure.
“This has been in practice for quite some time; we're just moving to a different spot,” he said.
The Economic Development and Incentives Commission, which includes representatives from applicable taxing jurisdictions, voted unanimously to approve the plan. Per state statute, a 353 redevelopment corporation board will be set up, and two of the seven council-appointed members will be from the Independence School District.