Purchase photos

Rural housing policy could entice developers

5/23/2013

By DAWNE LEIKER

By DAWNE LEIKER

dleiker@dailynews.net

Two Hays city commissioners have spoken out against the city developing a Rural Housing Incentive District policy, but in early June, commissioners will vote on whether to approve such a policy.

Asked by commissioners in February to draft an RHID policy, Assistant City Manager Paul Briseno brought the policy before commissioners at their May 16 session.

The use of an RHID was noted in the Ellis County Economic Development Coalition/Realtors Association Housing Needs Assessment as a way to reduce housing costs.

An RHID captures 100 percent of incremental real property taxes created by a development in an attempt to reduce overall costs. The developer, in essence, pays taxes only on the value of the undeveloped land prior to improvements.

An RHID would allow development of either multi-family or single-family units.

The state of Kansas requires a development performance agreement and an updated housing needs assessment be done for each development.

"While (a housing needs assessment) can be costly at times, we felt like if the developer truly wants this and feels it's something that can bring affordable housing in this community, that they have to go out and find that need and present it to you as a board and justify it to you as a commission," Briseno told commissioners. "Therefore, we require them to put forth the money for a housing needs assessment."

ECC Executive Director Aaron White told commissioners at the work session several Kansas communities have considered and adopted RHID policies.

"This is not a program I would completely discount," he said after hearing some reservations about the policy from Mayor Kent Steward. "I think there's definitely some valid uses for it.

"The state requires (developers using the RHID) to provide a very specific proposal, and a very specifically defined need for the community, so it's not something that every developer can use for any type of housing they provide."

Recently, White said he had been approached by a developer who considered building 28 three-bedroom houses in Hays. With an RHID, those homes, White said, could be built for $150,000 to $160,000. Without the RHID, costs likely would edge up to $180,000 to $190,000.

"He's doing 40 units in Garden City," White said. "He's put off doing a project in Hays.

"He's going out to do a project in Colby and Great Bend right now. They're both looking to do RHIDs in those communities as well."

Steward and Commissioner Henry Schwaller IV said they were concerned the policy would put an unfair burden on taxpayers.

"Under this RHID, the people who pay for that priviledge of others having that subsidized housing is everybody else, which includes a whole lot of people who can't afford to see their taxes going up," Steward said.

"There is a cost to the community for doing it," Schwaller said. "The cost to the school system, the tax on the county to provide infrastructure and the community as a whole is costly."

Overland Property Group in February requested the city look at the option of an RHID to aid the developer in building a 32-unit apartment complex near Hays Medical Center.

OPG, developer of Stone Post Apartments in south Hays, received the city's support to seek tax credits for the income-restricted units. Due to shrinking levels of available tax credits, OPG has sought to fill funding gaps using RHID programs in Dodge City and Garden City.