City considers new tool to boost affordable housing

University Estates

Click here to read the original story in the Athens News.

The city of Athens is considering taking a step toward encouraging development of affordable single-family housing in city limits.

The main thrust of the proposal under consideration by Athens City Council and the city administration is creation of a tax increment financing fund (TIF) to help private developers build the infrastructure they need to develop 50 single-family homes or townhouses inside the University Estates subdivision.

University Estates is located off of Ohio Rt. 682, north across the Hocking River from Athens’ Far West Side.

City Service-Safety Director Andy Stone and other city officials have laid out the following proposal in recent weeks:

• A private developer will take out a bond to pay for construction of a small section of road, utilities and other infrastructure needed to service the new housing development at University Estates (it will be located off University Estates Boulevard on the northeast corner of that subdivision, near the water tower).

• The private developer will build the housing development, which will be held to multiple standards by the city, including a requirement that the homes be owner-occupied for at least five years, and cost no more than $220,000.

• Once the homes are built, the TIF fund will begin to collect 75 percent of the increased property valuation of the land post-development for the next 10 years. This will mean no new property taxes, and will only affect the residents who live in the new homes. After 10 years, 100% of the property taxes will return to their normal recipients.

• The city will use the money collected from the TIF fund to pay the developer to service the bond that it will take out to pay for the road and infrastructure construction outlined in the first step. Any additional funds in the TIF after that will be used to pay for the city’s upkeep of the road and utilities after the 10 years are up.

This proposal came after roughly a year-plus of study from the city’s Affordable Housing Commission. Commission member Paul Logue said in an interview earlier this month that the main thrust of the proposal is to help create more owner-occupied housing in the city that is affordable for young professionals, roughly defined as costing anywhere between $120,000 and $220,000.

“One of the things that we concluded was that one of the challenges with getting housing built is the cost of infrastructure,” Logue said.

Athens Mayor Steve Patterson said as much during a June 10 meeting of Athens City Council’s committee of the whole.

“This is a mechanism to which we can help stimulate, with revenue generated by this neighborhood TIF… the city of Athens to finally get some housing development again,” Patterson said.

City Council member Chris Fahl noted that the development agreement in its draft form also requires the developer to “incorporate concepts of cluster design, zero energy and solar readiness” into the design of the new development. Another requirement would be that the properties be accessible to people with disabilities or mobility issues.

Council member Sam Crowl asked Fahl and other council members how stringent those requirements would be for sustainable development, and Fahl responded that the city still has a planned-unit-development process that the developers must go through before any development can occur. Any such design plans also will need approval by the city’s Commission on Disabilities and the Affordable Housing Commission.

Stone explained in a brief interview Wednesday that the city’s current rough estimate is that the TIF could generate around $800,000 over the 10-year period. The housing development proposed would be roughly 50 units of townhouse-style homes on smaller lots that would be large enough for a family with two or three children.

Stone confirmed that the developer who is currently interested in the development is Howard and Lawson Ltd., a business based in Albany.

So far, Athens City Council has only discussed the proposal with city administration. City Council would need to approve the potential TIF legislation with the development agreement attached to it, followed by the developers following the usual steps for building a new development, including going before the City Planning Commission and attending city hearings through the planned-unit-development proposal process (PUD).

Patterson during the June 10 City Council meeting and Stone during the interview Wednesday both noted that they see the TIF-development proposal as a test to see if this kind of process could be used in the future to encourage affordable-housing-development in the city.