John Day’s housing incentive program has distributed its first payments to people who constructed or remodeled homes within the city’s urban renewal district.
Only three site-built homes had been permitted in the last decade, and three new homes — two of which are still under construction — qualified for the new city program that provides cash rebates equal to 7% of the increase in assessed value for new homes, according to John Day City Manager Nick Green.
The program also provides a 15% rebate for remodels that increase assessed value by at least $10,000, and two projects qualified for those rebates in this first round of distributions.
“We wanted to incentivize new housing growth and improvements to existing homes because we desperately need private sector investment in our housing market,” Green said. “We need it to stop our population decline and to address blighted property conditions that are discouraging business growth and deterring potential new residents from choosing to live in our community.”
Like other urban renewal programs in the state, the city’s housing incentive works through tax increment financing, where tax gains from increases in a property’s assessed value each year are funneled into a separate account for use by the urban renewal agency, which is operated by the John Day City Council.
Property taxes paid to other jurisdictions, such as Grant County and the school district, will be frozen at the levels that were paid in 2017-2018, and any increases will go to the urban renewal district to fund the rebate program for the life of the program, which cannot exceed 20 years.
“We created an incentive package that, while not perfect, has led to nine new dwelling units and two major renovations within the first 18 months,” Green said. “We are addressing blight, expanding the tax base, adding new homes and creating job growth in the construction industry through policy innovation.”
Green and his wife received the largest rebate for a new home still under construction on Northwest Valley View Drive. The 2017-2018 assessed value was $29,090, and its current value is $252,549. The Greens received a rebate of $17,678, according to city documents.
John Brazil received a $12,217 rebate for a completed new home on Northwest Charolais Heights that increased in value from $91,443 to $174,536.
Sally Knowles received $6,137 for a multi-dwelling unit on Northwest Canton Street that improved from $32,330 to $87,681. The program also waives system development charges to hook up with city sewer and water services, and Knowles was able to waive $3,682 in water connection fees and $8,430 in sewer connection fees.
Jesse and Michal Madden received $6,554 for a remodel on Northwest Bridge Street, and Olivia Cornell received $4,566 for a remodel on Northwest First Avenue.
Green said the city wanted to create a housing incentive program that was as inclusive as possible, but state law constricts urban renewal districts to 25% of the land within the city and 25% of the assessed property values.
Although the city wanted to include more properties, Green said, despite advocating for a change to the law through the League of Oregon Cities, it was “politically untenable” to change the statute.
“Instead, we opted to include every available parcel within city limits that was undeveloped or partially developed, and as many existing homes as we could, with the hope that over the next 20 years (the expected life of the program) we would see new home construction and substantial improvements on the majority of those lots,” he said.
The city’s Project Advisory Committee and Technical Advisory Committee shaped the initial district boundaries behind closed doors. The Planning Commission and City Council approved the final boundaries. The goal was to reach as many neighborhoods as possible while holding back about 5% of the available land area for future allocation, Green said.
“If we have property owners that want to participate now or in the future for either incentive program, anywhere in the city limits or our urban growth boundary, we have the ability to amend the boundaries to bring them in,” Green said. “Anyone can be included even if they weren’t in the initial boundaries.”
Former city councilor Louis Provencher expressed concerns in 2018 when the district was being developed that the program benefited a limited number of people and that construction was already underway at some of the sites included in the district boundary, defeating the purpose of the program to encourage new construction.
A foundation appeared to have been poured for the Greens’ home before the urban renewal agency was officially created by ordinance in June 2018, and the initial values used for program calculations were based on 2017-2018 assessed values.
Green said he was happy his family could be early participants in the program. He said the city council, advisory committees and consultants “wrestled for months” on how to create as inclusive a program as possible.
He said he did not “view this as an ethical question at all” because “the council created a program that benefits all current and future residents equally.” He said anyone who wants to participate can, regardless of where they work.
“We own two of the 173 acres that were included by the city council in the urban renewal area,” he said. “That’s about 2% of the initial land area. Since the council’s goal is 100 homes, I guess we need to build one more in the next 20 years to do our part to reach that goal — and we’re happy to do it.
“We’re raising the third generation of my wife’s family in John Day. We want to do our part to lend our time, talents and resources to help improve the community. This is our home, and we’re here to stay.”