MOUNT VERNON — Revisions to the proposed city-wide Community Reinvestment Area (CRA) will hopefully stimulate construction of multi-family housing units and renovation of historic homes in addition to single-family homes.
Sam Filkins, vice president of the Area Development Foundation, told city council on Monday that about 133 homes are built each year in the county.
“We need to build those plus an additional 144 to 387 housing units to meet just the current need,” he said.
Thirty-six percent of those units need to be multi-family.
“We have met with developers to talk about what will bring them here, and they have all told us the same thing, which is at a rental price point of about $706 a month, they can’t build something and have it work out,” Filkins said. “So they need some sort of program to encourage them to build homes in our community.”
The CRA offers tax abatements on new home and multi-family construction. Abatements range from 50% to 75% for 15 years and depend on the income for a census block. Higher abatements are given in lower-income areas.
The exception is for new multi-family units, which in the lower-income areas can receive a 100% abatement for 15 years. In return for the 100% abatement, developers will participate in a PILOT program (payment in lieu of taxes). Mount Vernon school officials agree with the PILOT program because it supports the district’s emergency levy.
Under an emergency levy, the district receives a set amount of money. The amount each house pays changes based on the number of households; it can increase or decrease, but the total revenue to the district remains the same. By encouraging multi-family housing construction, the PILOT program helps ensure that more people participate in the emergency levy, thus lowering the amount each household pays.
The CRA also provides for renovations to single-family homes, duplexes, historic homes, and multi-family units. The abatements are on the improved property value only. The CRA sets the threshold for property improvements at $15,000.
Abatements range from 50% to 75% for 10 to 15 years depending on location. For historic homes, all abatements are 75% for 20 years.
Filkins said a home does not need to be in a historic district or on the national registry to be considered historic. It does, however, need to have architectural significance, housed a person of significance, or be the site of a historic/important event.
The CRA legislation includes creating a housing council to oversee the abatements. The housing council is also charged with annual inspections of the properties.
The Tax Incentive Review Commission (TIRC) will also review the abatements annually.
City council can reevaluate the CRA after three years and every five years thereafter.
The CRA legislation received its second reading on Monday. Filkins said the earliest the CRA can begin accepting applications is probably January 2022 as the state must first approve it.
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