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A Redevelopment Proposal

June 22, 2007

I’m not opposed to stealing ideas, especially if they are good ideas and can help Cedar Hill.

One such idea is Richardson’s redevelopment plan. The idea is that we give people an incentive to fix up their aging homes.

Here’s how it works.

Let’s say you have a $100,000 home that is in need of significant repair. If you spend, say $20,000, on improvements, the value of your home will increase because now it is in better condition. But here’s the rub. You get a double whammy because you have to pay for the improvements to your home and you have to pay higher property taxes because the value of your home has gone up.

The Richardson redevelopment plan lets the homeowner avoid the redevelopment penalty. They won’t have to pay — or technically they get a rebate — on the increased taxes resulting from the improvements.

So, if the taxable value of the property goes up by $20,000, that is a tax increase of about $130 per year for the city-portion of your taxes. This plan can only cover the city-portion of your taxes as the city has no control over school or county taxes. But over the course of 10 years, that increase adds up to about $1,300.

The homeowner would still be required to pay that tax increase, but they would get an upfront advance from the city for the amount of the increase for 10 years. In our example, once the renovations have been completed, the homeowner would get a check from the city for $1,300.

That works out well for the homeowner and the city.

Look at it this way. Without the incentive, homeowners might not make significant redevelopment investment in their home. Think about rental properties. As long as the landlord can rent the house, there is not much incentive to improve it. This plan just might provide that incentive.

So without the redevelopment plan, the city is left without the redevelopment and without the increased tax revenue. With the plan, however, the at least city gets the redevelopment. That is good for everyone.

Which is better: redevelopment and or no redevelopment?

All homeowners in single-family zoned areas would be eligible to participate, except those who are delinquent in taxes or other fees.

To qualify, an improvement project involving the reconstruction or remodeling of a single family home must cost at least $20,000 and be completed within 24 months of project approval.

To participate, a homeowner would be required to submit an application to our Neighborhood Services Coordinator, provide a cost estimate for the improvement project, consent to periodic inspections during construction and verify final construction costs.

If an application is approved, the homeowner would be required to execute an economic development agreement with the city.

A one-time rebate equal to 10 times the amount of the increase in city taxes will be paid to the homeowner based on the property’s pre-construction and post-construction appraised value.

To me, a good idea is a good idea. This incentive plan could spark much-needed redevelopment in some areas of Cedar Hill.

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