Washington City Council exploring idea of housing infill program

Potential for private builders to acquire distressed properties in favor of building new ones on existing lot

A program to encourage builders to acquire distressed properties, tear them down and build new ones was discussed at the Washington City Council meeting Tuesday night.

Washington City Administrator Brent Hinson said the city has a similar program in place already where the city acquires the properties, tears down the existing dilapidated building and sells the lot to an interested builder. He said the city has received interest from four private builders who would like to explore the possibility of the program.

“This is really just an effort to say, ‘Hey, guys, thanks for saving us the time and going through all these processes and handling it yourselves,’” he said. “Really it’s just putting a similar type of buy-in with that private initiative and encouraging that.”

Hinson said this will save the city in regard to paperwork and open opportunities for area companies to begin rebuilding the housing stock in Washington.

“It’s just kind of an effort to partner with the private sector,” he said. “I do think it’s something that there’s interest in and I think it’s something that we could get more of these in the future. If we did partner with them, we wouldn’t be using TIF, but we would sort of be treating the program like that.”

TIF, tax increment financing, is acquired when an increase in property value- for example, caused by a brand-new home in the area- brings in increased tax revenues. Cities can then use that dollar amount to put back into the city for infrastructure purposes.

Specific to this project, the new construction of a single family home would bring the city $5,500 in taxes to be paid back into the general fund and $7,500 for a multifamily home, over the course of 10 years. That money would then be reinvested into the project and given as a grant to the builder to be put toward demolition cost. Hinson said with this plan of using tax dollars to help pay for demolition, it could entice more builders and the program will eventually pay for itself in the long run.

The program is not designed to target specific homes and push citizens out of their homes, but to tear down foreclosures, nuisance properties, for homes with a value of approximately $15,000, for example, in favor of putting up a new $150,000 home in its place.

The council was in favor of the idea and will revisit the program for potential approval at their next meeting.