By Clint Wolf - March 13th 2024
BELOIT
The City of Beloit has about $6 million in Tax Incremental District funds to use as incentives for developers to create more affordable housing units in the city.
On Tuesday evening, city council members and city staff went over the application process that developers will have to go through to gain these funds for future developments.
Cities are allowed to extend the life of a successful Tax Incremental District (TID) for up to one year following payment of all project costs in order to use the last year of tax increment to fund affordable housing and to improve the housing stock in the community. Specifically, 75% of the increment must be used to “benefit affordable housing”, while the remaining 25% may be used to “improve the City’s housing stock.”
Beloit Economic Development Director Drew Pennington said Beloit is experiencing a shortage of housing. He said the city could need to see the creation of 250 to 300 housing units a year to keep up with demand. Last year, the city saw the creation of 50 units, Pennington said.
Currently, there are two affordable housing projects that have received zoning approval — a 6-acre site at 1642 Sixth St. and a site on the property where the Beloit YMCA used to stand along Riverside Drive/Highway 51.
TID Housing Fund applications will be available April 12 and applications must be completed and submitted by May 10.
The city council will score the applications from May 21 — 31 and the council will vote on the final funding allocations by June 17. Negotiations for development agreements will take place from July 1 — 31.
“The recommended minimum request is $1 million,” Pennington said.
Council members mostly discussed the scoring process for development applications during Tuesday’s meeting. In scoring the applications, council members can take into account how many units are included in the development, the percentage of affordable housing units and what kind of mix of affordable housing and market rate housing is present in the development.
“It is healthy to have a mix of incomes,” Pennington said.
Council members can consider, for example, how many units in a development are set aside for families who are at 30% of County Median Income (CMI), how many are at 40% CMI and so on.
He added that the developments can be located anywhere in the city and they do not have to be built in the Tax Increment District where the funds originated. He also said developers applying for TID funds must ask for a tax credit from the state.
As part of the scoring process, council members can consider if the development is planned for one of the Neighborhood Revitalization Strategy Areas (NRSA) in the city. These would include the Merrill and Hackett neighborhoods.
Council member Nancy Forbeck said she did not believe these developments should be targeted for these neighborhoods since the philosophy of the city is not to have affordable housing centralized in one area, but placed throughout the city.
Council member Kevin Leavy disagreed.
“We have worked hard to improve blighted areas in the city and we have made progress,” he said. “If I’m a developer, I would want to look at the city as a whole.”
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