The City will lose out on a lot of taxes over 15 years.
  • What is the tradeoff?
    • By law the City was obligated to run a financial analysis of the proposed improvements, the estimated eligible costs, and the estimated increase in assessed valuation/taxes.  There is a known tradeoff for this incentive.  Each district and development would see a reallocation of the tax revenue.  The City would look to forego the collection of property taxes for a fixed number of years to capture those in the future years once the eligible project costs are paid for.  The City will still collect sales taxes for any purchases these new residents would make within the City.
  • Is there more housing to be had outside of these districts?
    • The City of Louisburg is comprised of existing housing and a certain quantity of buildable lots.  Aside from those, there are approximately 1,100 acres of potentially developable land within the City limits.  Approximately 844 acres of that is identified for future residential development, including the districts under consideration.  The two districts have been platted for the proposed development for over a decade, and they collectively account for only 5.16% of the future residential land.
  • Why are builders unable to extend infrastructure at their own cost?
    • With the minimal number of buildable lots (those that have existing infrastructure immediately available), the City may not otherwise see additional residential development if a developer is not willing to use the traditional method of paying for infrastructure and recouping the costs through lot or home sales, or by using special assessments.  Special assessments have been used by the City in the past to collect the cost of providing public infrastructure to subdivisions and other areas, but it has proven to be a less desirable approach.  With the past defaulting of developers for cost of new infrastructure, those failed developments were paid for by banks and eventually sold off at artificially low costs.  The RHID approach is arguably more stable from a cost/benefit standpoint of a developer.  The City stands to lose nothing currently available.  Even if the City is not collecting property tax revenue on homes in the RHIDs for 15 years, there will be tax revenue from those homes far into the future.  As unimproved land the City receives very little tax revenue on those properties.  If these properties were developed now, City officials will know there will always be tax revenue.  If no development occurs then the City is in a wait-and-see approach as to if or when the properties are built upon.  Aside from the recent construction at Rockville Place, that built out all available lots in that subdivision, there has been little significant development inside the city limits since 2007.

Show All Answers

1. What are Rural Housing Incentive Districts?
2. Why are RHIDs being considered?
3. What does this proposed incentive cost current taxpayers?
4. Are there other potential costs that will increase my property taxes?
5. What about burden on, or capacity of, utility systems?
6. The City will lose out on a lot of taxes over 15 years.
7. Why is the City considering this incentive now?
8. How will the City benefit from growth?