Ark Valley News - Time will tell if tax breaks spur home starts

Time will tell if tax breaks spur home starts
Last Updated: March 30, 2017

Giving a five-year tax abatement to anyone who buys a brand-new home in Valley Center might be a good idea, but it seems a little desperate to us, not to mention inherently unfair to current property owners and those who buy used homes.

We understand why the Valley Center City Council approved such an incentive last week. The city wants to breathe life into existing residential developments that have room for growth, including Valley Creek on the city's west side and Prairie Lakes to the south. Though there has been some activity in Valley Creek, Prairie Lakes has come to a virtual standstill.

The city hopes the incentive will entice potential homebuyers.

Builders and at least one realtor have said word of the incentive is already spreading and attracting interest. We'll see how that goes.

It's too bad cities have to forfeit property tax revenue to attract homebuyers. What happened to the traditional selling points — safe neighborhoods, good streets, attractive parks and respected school system?

Maybe there are other options besides voluntarily forfeiting revenue the city could use to improve the areas that attract new homebuyers in the first place.

We guess it's darned if you do (the city loses revenue, and current property owners feel forgotten) and darned if you don't (other cities attract potential homebuyers with incentives of their own).

On another front, the city is now tasked with marketing 46 undeveloped residential lots in the Ridgefield addition. Saying it couldn't make payments on the specials it owes, Mennonite Housing gave the lots to the city's land bank last week.

The council then gave first-round approval to an ordinance that freezes all taxes due on the properties and defers specials until the properties have new owners.

This, too, is a case of darned if you do and darned if you don't.

The city says it could refuse the properties, see them go to a tax sale and hope the new owners can pay the specials and taxes and not force the rest of the city's property taxpayers to foot the bill on the infrastructure improvements made in Ridgefield.

With the option the city chose, the city steps in, freezes the taxes and tries to sell the properties.

It's a gamble, no matter how it's done. That's why it's too bad the city is in this position in the first place, even though it's trying to make the most out of a bad situation.

— The Ark Valley News