Great Bend City Council Ward 1 Councilman Alan Moeder summed up the governing body’s support for establishing a Rural Housing Incentive District in the city-owned Amber Meadows addition.

“It’s a no-brainer,” he said. His remark came during a Monday night council work session to discuss a request from Ellinwood contractor Justin Joiner, who sought the city’s backing for the Kansas Department of Commerce program aimed at spurring housing development.

The area in the northwest corner of Great Bend can accommodate at least 60 lots. Joiner said he would like to build about 20 to 30 houses per year, but that depends on the interest rates.

“He had approached us about the possibility of creating an RHID as an incentive to help this development,” City Administrator Kendal Francis said. “I just wanted to see if there was an appetite to pursue something like this. There is city investment, there’s a little bit of risk the city would take, but if you’re if you’re open to that, then we can start taking the next steps.”

No action was taken Monday. More details will come before the council at a later meeting.

What is an RHID?

First, Francis wanted to educate the council on RHIDs.

To accomplish this, he brought in Mollea Wainscott, assistant economic development director for the Dodge City/Ford County Development Corporation. Dodge City has used RHIDs a lot and Wainscott has become a statewide consultant on the program.

“We’ve used it in Dodge City to build probably thousands of homes since 2009,” she said. “What the RHID does is it captures the incremental increase in (property taxes) to pay off the infrastructure costs for up to 25 years.”

In other words, the city won’t receive any property tax revenue from the new construction for 25 years, or until the infrastructure is paid for, she said. 

With this, the city can pay off all public-owned infrastructure (streets, curbs, water and sewer) and, in turn, that cost isn’t turned over to the homeowner. “All all taxing entities forego the taxes on the new homes for up to 25 years or until the public infrastructure is paid off.”

A developer can also petition the city for general obligation bonds to cover the cost of infrastructure up front, she said. These are paid off as the project progresses and the money returned to the developer to help fund further development.

Since most developers can’t tackle an entire project at one time and have to pay the $1 million it can cost for infrastructure, this allows them to break it into phases, she said. It also holds them accountable to continue with their development.

A developer could also be asked to put up some money up front to “have some skin in the game,” Francis said. “The biggest the biggest risk to the city is if your developer walks away, and you’re stuck with all the infrastructure and the bills for it, and no homes being built to pay it back.”

What happens next?

As for the time table, the city has to have a housing assessment on file (which it does), the council has to pass a resolution to approve an RHID district, and file a legal description and a map with the Department of Commerce, which needs the blessing of the commerce secretary.

“Then you have to have a public hearing and a development agreement with the developer,” she said. The city must next run a feasibility study to make sure the project pencils out.

Wainscott said it doesn’t cost the city anything to declare an area as a RHID. They have tracts that have been under an RHID since 2009 that have not been developed and this can make the site more desirable for a developer.

“Your time clock starts when you pass that development agreement,” she said. That ordinance gives the developer 25 years to complete their project.

Once the city has this in place, other taxing entities (such as a school district) have 30 days to protest, which means their portion of the property tax won’t be included. However, Francis said he’s had preliminary discussions with the other taxing organizations and they indicated no objections.

“We used to do it where the city would actually do a special. If the city put in the street, there’d be an additional property tax on the person who buys the home,” Wainscott said. But, “with the price of homes right now and interest rates, it’s hard for the people who buy those houses and pay that extra cost. So this just takes that away. The taxing entities are saying we’ll forgo the taxes for up to 25 years to have more housing.”

They’ve had five new developments in the past year. This involves about 30 homes.

In terms of what is being built in Dodge, “our need is all over the board, from multi-family to single family to low income to high income,” Wainscott said. “We allow our developers to build whatever they want to build.”

They update their housing assessment regularly, so that need could change. The average new home value in Dodge is in the $260,000 range.

In Great Bend, the range needed covers $180,000 to $330,000.

There are other incentive programs that offer assistance, such as Great Bend’s Neighborhood Revitalization Plan, that have to be considered. And there are many other details to take into account.

But, “the plus out is to get housing,” Moeder said. “We have jobs for people to build the housing, and we are short of housing.”