City looking at home building incentives

Apr. 17—A proposal by city administrators to replace rundown houses with new homes by offering builder incentives is one of several strategies proposed to spark neighborhood revitalization.

It is an idea that City Manager Nick Edwards said is intended to regenerate aging neighborhoods where deteriorated housing has drawn the concern of many people who spoke to him in a listening tour he conducted last year on the community's strength and weaknesses.

"In the listening tour," Edwards said, "we heard a significant voice or a significant number of people express the desire to address the declining neighborhoods. I can't tell you how many people have reached out that want to see some of the dilapidated homes dealt with, and so that really has forced us to take a look at what can we do to help revitalize some of these neighborhoods and replenish our housing stock. We're certainly sensitive to wanting to provide homes that people are attracted to."

It's one of the programs city staff has proposed to the council to address the six goals set last fall by the City Council as a result of the listening tour.

Declining neighborhoods is the council's No. 1 priority among the six goals.

An incentive program to elicit the help of home builders is one of several strategies city management believes could accomplish a housing revitalization plan currently under council consideration.

"The idea behind this is this would help replace single-family homes that have little or no value that the market can't really solve," Edwards said. "We certainly need affordable housing, but I don't think we need dilapidated housing. This plan hopefully will address those homes that are probably destined to be demolished at some point, addressing that proactively so it doesn't continue to have long-term negative effects. The thought is we can incentivize builders to find those homes and replace them."

The incentives, if given formal approval by the council, could mean the city would pay $25,000 to $45,000 toward tearing down old houses and building new ones with a market value of $150,000 up to $275,000. Edwards said he is considering adding a category of housing under $150,000 after two City Council members said on Monday night they thought some lower priced housing should be included.

Edwards and assistant city manager Dan Pekarek outlined revisions to the housing proposal and heard council feedback during a work session last Monday. In that discussion, Edwards told the council he had bumped up the proposed incentives by $5,000 in response to council comments at a previous meeting that increased subsidies might be needed to obtain the assistance of homebuilders.

But he didn't have a category for houses with a market value of less than $150,000, something council member Chuck Copple said he thought is needed.

"If we are truly looking at development of buildings and neighborhoods that are economically depressed, I think a $150,000 house is too high," Copple said. He said there is an area in his neighborhood where there are three empty lots from old houses being torn down. "You are not going to be able to put a $150,000 house in that area. The lots are not big enough. We need to look at dialing that back to some of the neighborhoods that need it the worst."

The city manager said he could add a $10,000 incentive or a category for houses worth about $125,000.

Councilman Phil Stinnett said houses would have to be built in a price range comparable to those in the area where it is located. He also said he has concerns about whether the program will work financially for homebuilders. A $5,000 or $10,000 incentive is not going to be enough for a homebuilder to buy the property and build.

"A home is going to have be worth close to zero to make it work financially," he said. "I don't have a problem with the program but I do with the metrics in this proposal. To me it is not financially an inducement" to offer the incentives considering the expense, especially with the current rising cost of materials.

The city manager said subsidies would be based on the assessed value of the houses and would not be paid until after new houses are finished and receive initial property value assessments by the county.

In order to qualify for incentives, a set of requirements would have to be met including:

New houses

* must replace single-family homes.

Home design

* must be consistent with other houses in the neighborhoods.

Houses that

* are subject to the incentives could not be used as rentals for 10 years after completion.

City staff will look at whether the city could provide a sales tax exemption for materials purchased for the homes and consider partnerships with companies that could make in-kind contributions to reduce the cost of buying properties, demolishing the old houses or building the new ones, the city manager said.

Joe Harris, a partner in Schuber Mitchell Homes, said he thinks the program would work. In fact, it's something that company has already been doing.

"One of the interesting things about Schuber Mitchell that not everybody knows is we were founded after the Joplin tornado with the goal of helping the city of Joplin rebuild after the tornado," Harris said. "So our first several years we worked in the tornado zone to rebuild in Joplin and Duquesne. Since that time we have rebuilt hundreds of homes in the inner city. So we absolutely have a heart for the city of Joplin and to see the city continue to develop and offer quality houses to residents of Joplin. We are 100% committed to that idea."

Neighbors in places such as the 300 block of South Cox Avenue, for example, recently saw three new houses spring up where old ones had been crumbling away.

Many of Joplin's older housing lots are narrow, only about 50 feet wide. Harris said the company developed a floor plan three years ago to fit that footprint.

"We have been buying up these vacant lots and been building houses through what we call our Cottage collection," he said. "These are lower-priced, more affordable homes that will fit on a 50-foot inner city lot. We would absolutely be interested in helping the city to rebuild houses on those lots" because the company is already doing that without an incentive.

"But to have the incentive, that would help a homebuyer," Harris said. "It's nice to to see the city committed to bringing new homes. It is needed. I think the city is on the right track. If you want your city to develop and continue to grow, you need jobs and you need quality housing for those people fulfilling those jobs. Housing need is a national issue."

The city manager, asked how the city would pay the incentives, said the payments could come from the city's general fund reserves and/or from any money the city might receive from the $1.9 million American Rescue Plan proposed by President Joe Biden.

In the meantime, Edwards said he will refine the housing proposal, possibly adding a lower tier, and bring it back for further council consideration.