WILMINGTON — Members of the Wilmington Judiciary Committee hope to present for passage an ordinance they believe would incentivize residential development.
Specifically, the ordinance would create and petition the state to certify a city-wide Community Reinvestment Area that would give tax abatements to those who improve upon residential lots in the city limits.
Wilmington Council member Rob Jaehnig, who represents the fourth ward, said “One of the original goals was in part to potentially reduce the amount of rentals in the community.”
Wilmington Mayor Randy Riley added that reducing blight is another goal.
As drafted, the ordinance would abate 100 percent of the marginal, or increased, taxed value after an improvement. For example, if a housing officer working for the program approved an abatement, a house valuated at $100,000 and improved to be valuated at $120,000 would still be taxed at $100,000 for as long as the abatement exists.
The city doesn’t employ a housing officer. Brenda Woods, the executive assistant to Riley, said there was another ordinance that named County Administrator Mary Ann Foland as its housing officer.
It wasn’t clear Thursday, Sept. 3 if city officials would consider naming Foland or someone else as housing officer.
As drafted, the abatement’s length is scaled based on the kind of improvement made. Single-unit homes built on lots with existing city infrastructure get 15 years, the most available under the ordinance as it is currently drafted.
Some projects in historical districts could receive an additional ten years’ abatement with council’s approval.
The least available under the currently-drafted abatement is five years. Constructing a single-family home on a lot with no existing utilities will trigger that.
Only the primary resident, not a developer, landlord or realtor, can take advantage of the tax savings. Because the abatement stays with the property, a land owner, such as a developer, could receive the abatement and use it as a selling point.
“Because of this CRA, they could sell it for a reasonable price,” Riley said, referencing a property on Wall Street. “Right now there’s so many liens on it and so many other things that it would be a hindrance to making a profit.”
Riley said the CRA wouldn’t invalidate the liens, but would make a profit possible.
Council member Joe Spicer said he was concerned a few developers would put in minimal money and effort in order to draw the abatement, but Jaehnig said the developer wouldn’t see much of an advantage then.
Jaehnig also stressed that the CRA wouldn’t lower current property taxes, but instead forego future ones on lots that otherwise may not have been improved. He said the city, county and school districts might see increased revenue from the surrounding neighborhood as people invest in houses.
According to Clinton County Regional Planning Executive Director Taylor Stuckert, the abatement isn’t something people will accidentally benefit from. Those looking to renovate would have to plan on taking advantage of it.
He said it’s a good way to encourage new investment that people may not have otherwise made.
Stuckert also said the ordinance, as drafted, includes a re-evaluation after Dec. 31, 2020. At that time, council may choose to end the program, although Stuckert said the city could end it anytime it wanted to as well.
The committee usually meets on the first and third Thursdays at 6 p.m, before Wilmington Council meets. At the meeting, Jaehnig said the committee needed to add language to the ordinance restricting who can benefit from the abatements to primary residents only and pick a housing officer.
Jaehnig asked for the ordinance to be on Council’s next agenda. Because council members have to have time to read their packets before the meeting, if the committee doesn’t approve the drafted ordinance as presented, it would have to rescind its request and place it on a future agenda.
Reach Nathan Kraatz at 937-382-2574, ext. 2510 or on Twitter @NathanKraatz.