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FD City Council moves toward housing incentives

Aid intended to encourage new construction

December 4, 2012
Messenger News


The local government should provide some incentives, at least for a couple of years, to spur the construction of new homes in Fort Dodge, members of the City Council agreed Monday.

''What we really need right now is the initial start,'' said Councilman Kim Alstott.

He said the city currently does not offer any incentives for building homes.

With new and expanding businesses in Webster County on track to create 500 jobs in about 24 months, finding desirable houses for those workers has emerged as a priority for leaders of local government and the Greater Fort Dodge Growth Alliance.

Thanks to years of weak demand, the city doesn't have a large selection of new homes. Figures compiled by the Growth Alliance show that most of the city's houses were built before 1970 and 32 percent of them were constructed before World War II.

Councilman Dave Flattery said when it comes to building new homes, the first developer to enter the market faces the greatest financial risks. He said the city must provide the incentives that will get that initial developer started.

Flattery added that he doesn't think any incentives will be needed two to three years from now.

''I don't think anything's going to happen without offering incentives,'' Councilman Dean Hill said.

During a nearly hour-long workshop, the council members agreed that incentives should be offered for the construction of these kinds of new housing:

The exact form of the incentives was not decided Monday. The use of tax increment financing to reimburse developers for the costs of installing utilities was mentioned frequently. Tax increment financing occurs when increased property tax revenue from a designated area is set aside to be reinvested in that area.

Council members agreed that the incentives should be provided for building new houses in areas that are blighted or have pollution problems. Such areas are called brownfields.

Councilman Mark Taylor said providing incentives for construction in brownfields would help rebuild the center of the city, and avoid the expense of extending new roads, water mains and sewers into currently undeveloped areas. Investing in the brownfields, he said, would ''keep our footprint the same size.''

An initial proposal from City Manager David Fierke wouldn't provide incentives for building in some undeveloped areas called greenfields.

Mayor Matt Bemrich said not providing incentives in greenfields may make building there financially impossible for some developers.

''Why make that an automatic no?'' he said. ''The incentive, to me, is to make the target market cash flow.''

Fierke was directed to write a proposed formal policy on housing incentives to be presented for council action.



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