Aldermen pass affordable housing incentive policy
More developers could build affordable housing complexes in the LOU community, thanks to an incentive policy enacted by the Oxford Board of Aldermen on Tuesday.
The policy will provide developers with a $1,000-per-bedroom return on investment, if developments guarantee maintenance of 100 percent of the units as affordable housing for 15 years, unless the mandatory incentives of the ordinance exceed the maximum incentive offered.
Mayor Robyn Tannehill said during the meeting that the decision to provide these incentives is “very exciting” for Oxford.
“We’ve had a lot of discussions amongst ourselves, and with the planning and building departments, trying to determine the best way to do this,” Tannehill said. “We want our incentives package to be attractive enough that we are building the community and receiving more of these developments that we desperately need.”
Tannehill said the aldermen, planning commission and building department had discussed at length the benefits of providing incentives based on number of buildings or square footage, as some municipalities do, but incentives based on bedspace would more accurately portray the number of people living in affordable housing complexes.
Belle Rivers is the affordable housing complex of its kind in the LOU community, and therefore the first to receive such incentives. Because the development is funded through the Low-Income Housing Tax Credit program, it is required that 100 percent of its units are designated “affordable housing” for 15 years. When that 15 years is up, residents at that time will have the option to purchase their unit with a price reduction equal to the amount of rent they paid.
While other developments might not be funded through LIHTC, the $1,000-per-bedroom incentive will still yield a handsome profit. For example, if a complex has 200 rooms, the developer would receive an incentive of up to $200,000 if all units are still designated as affordable housing at the 15-year mark.
“We wanted to put something in place that we can repeat, so that each time it’s not a whole new ballgame,” Tannehill said. “[Belle Rivers] is our first truly affordable housing development that we will be offering incentives, and we hope more will come our way.”
Developments that guarantee maintenance of 100 percent of their dwelling units as affordable housing for 10 to 15 years will earn a maximum incentive of $750, unless the mandatory incentives of the ordinance exceed the maximum incentive offered.
Developments that guarantee maintenance of less than 100 percent but more than 50 percent, of their dwelling units as affordable housing for 15 years shall receive a percentage reduction in maximum allowed $1,000 incentive equivalent to the percentage of units maintained as affordable unless the mandatory incentives of the ordinance exceed the maximum incentive offered.
Where developments guarantee maintenance of less than 100 percent, but more than 50 percent, of their dwelling units as affordable housing for less than 10 years, but not less than 10 years shall receive a percentage reduction in maximum allowed $1,000.00 incentive equivalent to the percentage of units maintained as affordable, less an additional 5 percent unless the mandatory incentives of the ordinance exceed the maximum incentive offered.
In addition to the $1,000-per-bedroom incentive, the city is also waiving Belle Rivers’ planning department review, building department and tree mitigation fees. Water and sewer connection or tap fees will be reduced by an amount “equal to $2,568.”
According to the policy, other developers who are interested in building affordable housing in Oxford can expect similar waivers and reductions. Stormwater and other utility requirements will also be considered with value established by estimates performed by the developer with approval of city staff.
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