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  • Writer's pictureRoger Sims, Journal Staff

Fledgling housing program to start with tax rebates, grants

Linn County's new housing program will start with tax rebates and a state grant to work on building new affordable homes and rehabilitate existing homes. (Wix stock photo)

The city of La Cygne spent nearly $50,000 in 2022 tearing down houses that were either dilapidated and dangerous or had been mistakenly built on city rights of way.

Much of the time of both the Mound City and Pleasanton city councils is spent on dealing with houses that have not been kept up and are in need of substantial rehabilitation or demolition.

It is a common problem in all of the cities as well as in rural areas in Linn County.

Between 2010 and 2020, Linn County lost 7% of all of its housing units. In 2020, the U.S. Census Bureau estimates that there were 5,065 housing units in the county compared to 5,446 in 2010, a loss of nearly 400 units.

There have been areas in the county where new homes are being built, but for the most part those new homes are being built in lake developments or in rural areas of the county. With the exception of Linn Valley, new residential construction has been rare, and little has been done to address the needs of moderate-income workers.

In Linn County, like much of southeast Kansas, there wasn’t much available for lower- and moderate income families, according to Jessica Hightower, Economic Development director for Linn County.

But sound, safe and affordable housing is not just a problem for those income brackets. It affects everyone from renters to business owners in the county.

For Hightower, who is charged with developing and recruiting businesses and creating jobs in the county, the availability of housing and economic development go hand in glove.

“Economic development is basically a circle,” Hightower said. “Business coming in needs a workforce. The workforce needs somewhere to live.”

“From my standpoint, I would love to see families move in,” she said. “I would like to see our young people graduate from whatever school is their choice and come home and work here.

“I’m hopeful if we can increase our housing stock and the quality of our housing stock that’s available. By doing that we can help grow our economy.”

Gov. Laura Kelly’s administration has long been aware that rural communities face a housing problem. Over the past three years, the state Commerce Department has sent out staff to talk with people in rural communities about the housing problems they face all the while seeking solutions to that problem.

Housing champion hired

Last October, that department’s Office of Rural Opportunity approved a grant application from Hightower that would give Linn County the opportunity to hire a part-time “housing champion” for a year to look at ways to address housing needs.

That champion is Darcy Wilson, who came on board on Oct. 17. Under the grant, counties and rural towns will work on core issues and, it is hoped, be able to create an action plan that helps other rural areas follow suit.

Wilson said that improving the housing stock is not only a draw for returning young people, it is a draw for bringing new families into the area.

“I’m a transplant myself, and I love it here,” she said, adding that her family moved to Linn County about nine years ago.

Wilson grew up in a household in Raymore, Mo., where her father was an architectural craftsman. She also worked with her husband Darin Wilson in a construction business they owned, and she said she was familiar with both new construction and rehabilitation projects.

Hightower said that Linn County communities are becoming more open to accepting newcomers, a trend that needs to be encouraged.

New homes that are being built in the rural areas of the county tend to be more expensive houses, either that or barndominiums, structures that typically include living quarters inside barn- or shop-type buildings.

Hightower said that there is a need to address affordable housing in both the towns and in rural areas.

“I would like to encourage growth throughout the county as well,” Hightower said. “The rural lifestyle is kind of the backbone of the county. We’d like to preserve that.”

However, during the first phase of the county’s program, it will focus mainly on cities, said Wilson.

Hightower said she believes that it is the cities where most of the housing has disappeared. They also say that the loss of housing most significantly impacts lower- to moderate-income families the most.

Darcy Wilson, left, and Jessica Hightower are in the process of developing a housing program for Linn County. Housing Champion Wilson was hired under a grant last fall to work on the lack of affordable housing. Hightower, county economic development director, says that affordable housing is essential to growing the local economy. (Roger Sims/Linn County Journal)

The two used a survey of the southeastern Kansas region to help determine housing needs. It was part of the Kansas Statewide Housing Needs Assessment 2021. The survey, the first of its kind in 20 years, was conducted for the Kansas Housing Resources Corporation under the Kansas Department of Commerce.

On Dec. 5, Wilson and Hightower conducted a housing meeting with mayors from most of the cities in Linn County to announce their work on the Neighborhood Revitalization plan that would use property tax rebates to encourage building new homes or substantially rehabilitate older homes in the cities.

They only gave out preliminary information on the program while they work on details, and the final plan has not yet been released.

Using what they called the rough draft, Hightower and Wilson said that the program would allow up to a 95% rebate on assessed property taxes for a five-year period.

While preliminary reaction to the tax rebate program was generally positive, it appeared to overlap a program in place in Pleasanton.

Teresa Whitaker, administrator for the City of Pleasanton said her city already had a tax rebate incentive for new construction. Nonetheless, she welcomed any program that could spur the building of new homes.

She also suggested that the program should allow investors to apply. “I don’t care who’s building the house,” she said, “I want more houses.”

Linn Valley Mayor Cindy Smith had a different take on the proposal, however. After letting those at the meeting know about Linn Valley’s building permit moratorium, she said she was concerned that people who were building a second home, lake houses that could costs as much as $900,000, would use the program rather than those who wanted to build their primary residence.

Moderate income housing grant

In a separate meeting with county Commissioner Danny McCullough, mayors and other city officials on Dec. 20, Wilson and Hightower gave cities information about the Kansas Moderate Income Housing program (MIH), which is accepting proposals from counties and cities with populations fewer than 60,000.

Under the grant, counties or individual cities could be awarded up to $650,000 to make improvements to either single-family or multiple-family housing. The money could be used to acquire real estate, build homes, purchase modular or manufactured housing, rehabilitation of existing housing or assisting home buyers. It could also be used to develop infrastructure that would support new housing.

While cities could apply for that grant, most officials of Linn County cities seem to have opted for letting the county submit the proposal and then use the money to fund several different projects around the county.

That is a strategy that will be more likely to be accepted by the state, Hightower said.

“Most of the grants that I’ve seen lately, they encourage regionalism,” she said. “So whether it’s Linn County going in with the other counties in the southeast Kansas region or the cities in Linn County and the county itself working together in the grant application, that’s much more favorably looked at than one entity by itself.”

Wilson said the grant could be used in a number of ways including hiring a developer, buying materials, helping with an assessment on a lot, and developing a down-payment program for would-be homebuyers.

Developers are interested

One of the problems discussed by representatives from several rural communities in southeast Kansas has been getting a developer interested in doing smaller developments. But that was about three years ago, pre-COVID, when the new housing market was beginning to heat up.

Hightower said that two reputable developers have already expressed an interest in working with the county on this new round of projects.

Wilson said that grant money could be used for either new construction or rehabilitation of an existing structure. However, she added, if it is a rehab job, the house cannot be owner-occupied. Either the city or the developer would own the house.

The Kansas Housing Resource Corporation has allocated $60 million for the MIH program. Income guidelines for the program are based on the U.S. Department of Housing and Urban Development income guidelines based on 60% to 150% of the agency’s state income limits. For a family of four, that range is between about $52,000 to more than $140,000 annually.

In order for it to work in Linn County, the county will need to pay for 85% of the project, whether it’s for one house or four houses, upfront.

According to Wilson, the grant will allow an advance of 15% of the project cost with the rest of the money coming from the county. Once the project is complete, the state reimburses the county. When the property sells, the money comes back to the program and can be used for additional projects.

Hightower called this initial effort just a start on what needs to be done.

“I think we’re going to have to come up with ways to make the program sustainable,” she said.

“We’re hoping it turns into more houses,” Wilson said.

She also said there are as many as 30 banks in the state that are familiar with the MIH program who lend to first-home buyers and are ready help homebuyers in this program.

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