Tax breaks for houses proposed in Fort Dodge
People who build new houses or do major upgrades on existing ones would receive a break on their property taxes under a plan introduced to the Fort Dodge City Council Monday.
The city government would not pay out any cash incentives for the projects, according to the plan. Instead, it would allow property owners to postpone paying their new higher property taxes for three to five years or gradually assume that burden over a decade.
Key components of the plan would be phased out on Jan. 1, 2016.
”You should expect accelerated growth with this,” City Manager David Fierke told the council.
All of the council members at a workshop discussion on the tax abatement program said they were in favor of it. City leaders will now begin the process of implementing the program. Under a schedule presented Monday, the council would give final approval to it on April 22.
The incentive plan is being developed at a time when city officials and leaders of the Greater Fort Dodge Growth Alliance are trying to stimulate a stagnant housing construction market to accommodate people expected to move to the area for jobs at the North Central Ag Industrial Park.
”We need to have supply available as these newcomers come looking,” said Tom Chalstrom, the chairman of the Growth Alliance’s Housing Committee.
Chalstrom said one-third of the city’s houses were built before 1950.
He added that there hasn’t been much home-building activity in the last 10 to 12 years.
Vickie Reeck, the city’s community development manager, said the biggest need is for new houses in the $175,000 to $250,000 price range.
The proposal presented Monday would update an urban revitalization tax abatement system that’s existed in parts of the city since 1994.
For new homes anywhere in the city, the proposal would provide a five-year, 100 percent tax abatement on the first $75,000 of the home’s value. That means the homeowner wouldn’t pay taxes on $75,000 for the first five years of the house’s existence.
The same incentive would be in place for remodeling or rehabilitating a house anywhere in the city. However, the incentive would only be available for houses built before 1980. Also, the improvements would have to increase the assessed value of a property by at least 15 percent to qualify for the tax abatement.
Developers who build new apartments anywhere in the city would gradually begin paying property taxes on them over the course of 10 years or they could pay no taxes at all for three years.
The incentives for building new single family houses would be phased out on Jan. 1, 2016, but the incentives for rehabilitating properties would likely remain in place.