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Shawano may encourage affordable housing

Plan would tap funds from expiring TIF districts
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The city is looking to promote new affordable housing in Shawano and renovate existing units under a plan that would tap two expiring Tax Incremental Finance (TIF) districts to help make that happen.

The finance committee Thursday recommended resolutions that would use some of the taxes collected in those districts for those efforts.

The Shawano Common Council will take up those resolutions when it meets Wednesday at 6 p.m. at City Hall.

The resolutions technically call for extending the life of those TIF districts, but in reality would use the last year of TIF-related tax collections in those districts to go to affordable housing, which is allowed by state statutes, according to City Administrator Eddie Sheppard.

“By passing a resolution extending the TIF district for affordable housing right now we can utilize the 2018 collection for the affordable housing,” Sheppard said. “Next month, we’ll pass a resolution closing the TIF districts.”

That will have to happen by April 15 under state deadlines.

TIF districts are areas where municipalities invest in infrastructure, such as sewer and water, to attract development where it might not otherwise occur, or to make improvements, such as eliminating blight.

Whatever increase in tax revenue that results from development in those districts goes to paying back the debt the municipality incurred from making improvements to the district.

The TIF districts in the resolution were actually due to be closed early because the debts they incurred have been paid off. The last year of TIF-related tax collection in those districts is this year for the 2018 tax period.

“Both of them were closing early, but you have to pass a resolution stating that the last year of your collection is going to be used for affordable housing,” Sheppard said.

The TIF districts in question include the Raasch Industrial Park, which was created in 1992 and expected to close in September of this year, and the Lincoln-Zingler housing district, created in 1995 and expected to close in September 2022.

“Both of them have achieved everything we hoped for,” Sheppard said.

Between the two, the districts typically generate about $417,000 in incremental taxes each year.

That money can be used to fund affordable housing anywhere in the city, not just within those districts.

“The state statutes allow for the last collection year of a TIF district to be used for affordable housing improvements,” Sheppard said, “which would typically mean allowing funds for folks who want to make improvements to houses that would be considered blighted or in need of repair to maintain their structure.”

It could also be used to assist an apartment development or housing development as long as there’s a portion of it that could be used for affordable housing, which would include subsidized or reduced-type rent housing, Sheppard said.

“It would just be another incentive that we could offer when approached with those opportunities,” he said.

Sheppard said there has been a big demand from property owners to take advantage of the Shawano Redevelopment Authority’s incentives for improving blighted properties, particularly in the downtown area.

“A lot of the downtown apartment units are currently vacant, primarily because they just haven’t been maintained or it hasn’t been cost effective for the building owners to make the improvements necessary to put people in them,” he said.

The proposal falls in line with the city’s comprehensive plan, which includes efforts to increase housing affordability in the community, and with the downtown master plan adopted by the RDA to “increase affordability in and around the downtown while also reactivating the second stories of many of the historic downtown structures,” according to the resolution.

The resolution calls for a program to “incentivize the construction of new and renovation of existing units in the city to improve the housing affordability of and make improvements to the existing housing stock.”

It’s not clear yet what that program will look like.

Sheppard said those details still need to be nailed down by the RDA, which is expected to happen over the next several months.