WILMINGTON — Come December, residents may be able to receive a tax break if they do work on their current home.
Rob Jaehnig, fourth ward council member, presented legislation to the council that would create the Community Reinvestment Area, an act to help rebuild Wilmington’s neighborhoods.
To apply for the tax abatement, Jaehnig said residents must do at least $2,500 of work on their home.
“If you have a piece of property that’s currently valued by the auditor’s office at $80,000 and you make an investment of $5,000, and that investment takes the value of that home up to $100,000, your abatement is on the $20,000 increase,” he said. “Any taxes … you would pay on that $20,000 increase would be abated.”
Jaehnig said the abatements would be between 10 and 15 years. The abatements could last longer, he said, if the property that is renovated has historical or architectural significance in the community, as deemed by city council.
“The thought process behind this is to encourage investment in our residential properties and homes to rebuild the fabric of your community,” he said.
In addition to giving residents tax abatements for renovating homes, Jaehnig said his legislation, which he has been working on for around two years now, plans on converting empty multi-family homes back into single-family residences.
Wilmington is comprised of 52 percent rentals, he said, compared to a healthy community’s 32 to 36 percent rental rate, Jaehnig said.
“Because of the housing market being where it is, we seem to have a set of rentals at one level, another set of rentals at another level and then we have a lot of empties that are sitting there because there isn’t the money to bring them up to a standard where people are interested in renting them,” he said.
He added that the city needs to encourage people to purchase homes that are sitting empty and put work into them.
While house flippers will not receive the abatement (the family living in the home will), it’s an incentive to people looking to buy a home because they will receive that abatement, Jaehnig said.
“The nice thing is, is if we can take a piece of property now that might be worth $40,000 or $60,000, somebody invests $30,000 or $40,000 in it and all of a sudden that property might be worth $100,000 to 120,000,” he said.
In addition to empty multi-family homes, there are a lot of empty lots in Wilmington that already have water, electric and gas. There are also “green lots,” Jaehnig said, which are lots without city hookups, that need filled.
“Because we want to encourage people to move inside the city … we’re also proposing a tax abatement on green lots,” he said. “We plan on being very aggressive in attracting (people) … to fix up these homes, take care of our properties and to really improve the condition of the city.”
Jaehnig said he wanted to assure residents the tax abatements people will receive are not taxes that the city, schools, county or parks are receiving.
“We’re not giving away anything that’s already being collected,” he said.
“I consider this a landmark piece of legislation that can help us move to the next level of returning our community after issues with DHL,” he said.
The reading of the legislation was only the first reading Thursday night, and Jaehnig said there was “no push” to have it approved immediately. Jaehnig said he wants to have three readings of the legislation and have it approved by December so the new housing authority committee can be put together.
Jaehnig said he hopes to make a huge impact with the legislation and hopes to have 100 homes rehabbed in the next 10 years.
“We can make a huge impact,” he said. “I think it’s time we get really proactive about rebuilding this community.”
Reach Dylanne Petros at 937-382-2574, ext. 2514, or on Twitter @DylannePetros.