City considers ways to support housing development

Sept. 27--Logansport officials are considering ways to support proposed residential developments throughout town to increase the chances of getting state funding for the project.

Indianapolis-based Crestline Communities intends to apply for tax credits from the Indiana Housing and Community Development Authority to help fund building 30 to 40 single-family houses in Logansport.

Dan Hubbard, who works in Crestline Communities' tax credit department, and Allie Rosenbarger, a real estate development manager with the firm, briefed Logansport leaders on the proposal at a city council finance committee meeting Monday night, Sept. 25.

They presented the project as ReVere Homes, after ReVere Motor Car Co., which operated in Logansport in the early 1900s.

Hubbard said half of the houses would be three-bedroom and half would be four-bedroom. They would have architecture consistent with their neighborhoods, include garages and be certified by Leadership in Energy and Environmental Design, a green building rating system.

The houses would be built on lots Logansport owns and lots formerly occupied by houses torn down through the city's participation in the state's Blight Elimination Program, Hubbard said, for a total of about $10 million in development costs.

Income-restricted

The tax credit program Crestline Communities will apply for would require the houses to be rented to tenants making 30 to 60 percent of area median income.

Median household income in Logansport was about $33,000 in 2015, according to estimates provided by the U.S. Census Bureau. Sixty percent of that is just under $19,800.

Hubbard told Logansport officials Monday that tenants would only have to fall within that income range their first year of renting, after which they could exceed 60 percent of area median income.

"Our intent is to help them better their life," Hubbard said. "If they get quality housing, a lot of times that's one of the weights off their shoulders."

Rosenbarger explained during the meeting that the rent ranges provided were on the higher end because they are figures renters would be responsible for if Crestline Communities paid utilities. Because ReVere Homes residents would pay their own utilities, Rosenbarger said it would result in a rent discount based on an average of Cass County's utilities bills.

Lease-purchase

The houses would be rental properties for 15 years, after which Hubbard said tenants would have the opportunity to buy their properties at the cost of outstanding debt and taxes.

The 15-year rental period would correspond to the property, Hubbard said, adding if the initial renter moved out of a house after 13 years, the next renter would only have to rent for two years before having the opportunity to buy.

"At the end of 15 years, it's converting to market-rate housing," Hubbard said. "That's the beauty of lease-purchase."

Rosenbarger said training programs would be available to tenants on mortgages and financial literacy.

While in their rental period, Hubbard said Crestline Communities would professionally manage the houses to work with tenants on maintaining their properties. The firm would also offer maintenance classes and work with local governments if tenants commit code violations. He added Crestline Communities, the project's equity investor and the state would regularly inspect the properties.

City involvement

Applications for the tax credit program are due Nov. 6.

Municipal support can help make applications more competitive. The IHCDA awards points for support cities offer projects like taking on a percentage of development costs and approving tax abatements.

City council members at Monday's meeting agreed to vote in the future on funding the lots' environmental inspections, which Hubbard said would cost about $19,500 total. Officials agreed because the inspections would have to be completed before the tax credit application is submitted, it would be a significant risk for Crestline Communities to take it on before knowing whether or not it would get the tax credits. The inspections would likely be necessary before development occurred regardless of the result of the tax credit program, officials also reasoned.

Council members also agreed to fund appraisals needed for the lots, figures for which have yet to be determined.

City Councilman Dave Morris expressed his support for the proposal at the meeting.

"The problem that many people have in this town is that they rent at levels to live in conditions that aren't maybe the best, but there's no light at the end of the tunnel if they do the right things," he said. "I think through this program there is that hope."

City Councilman Matt Meagher said he likes the concept of the proposal but wants to see more data to ensure there's both demand for it and that it's economically feasible for Logansport families the houses would be available to.

Rosenbarger said she would provide officials with updated rent ranges with utilities reductions, what the houses' energy savings would be like and data on Logansport's housing market.

City Council President Teresa Popejoy said after Monday's meeting that the council will consider further supporting the project in the future as well.

Logansport Clerk-treasurer Stacy Cox recommended doing so with a tax abatement.

The city isn't currently taking in any tax revenue on the lots anyway, she said, adding continuing that trend in order to get 30 to 40 new houses for the community is a "good trade-off," especially when considering the increases to other revenue sources it will result in, like utilities.

Reach Mitchell Kirk at [email protected] or 574-732-5130

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