Rockford City Council moves homebuilding incentive program forward

By Kevin Haas
Rock River Current
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ROCKFORD — City Council members on Monday moved forward with plans to offer property tax rebates and waive permit fees in an effort to encourage homebuilding.

The council’s Finance & Personnel Committee voted unanimously in favor of the measure. It goes before the full City Council for approval next week.

Related: Homebuilding never recovered after the Great Recession. Here’s Rockford’s latest effort to change that

The program provides a three-year property tax rebate on single family, townhome, two-family, three-family or multifamily structures built before the end of 2024. Such construction projects would also have building permit, building inspection, building plan review and water connection fees waived.

Rockford Public Schools, the Rockford Park District and the Winnebago County Board will also consider the measure.

“They are the main taxing bodies that are identified within the intergovernmental agreement. However, additional taxing bodies are welcome to join the property tax rebate,” said Todd Cagnoni, city administrator. “The four principal taxing bodies would represent approximately 85% of the property tax bill that an individual property would get.”

If approved, the effective date would be Sept. 1.

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Homebuilding in the city, as well as across the country, has been stagnant as high material and labor costs have significantly driven up construction costs. Local developers and homebuilders have said even with the rebates and fee waivers building is still a difficult economic proposition. Cagnoni reiterated that Monday.

“Whether the cost reduction incentives that we put together are going to be significant enough to push projects over the hump, I honestly don’t know, and it’s very difficult to predict,” he said.

Before the housing crisis in 2007, city officials said they would regularly see about 225 single-family homes built. There have been 19 so far this year and 17 last year. Meanwhile, the city has demolished roughly 100 blighted homes per year, Cagnoni said.

“This program is looking to build up new residential construction within our community,” Cagnoni said.

More new homes can also help lower property taxes in the long run by adding money to the tax base, or overall equalized assessed value of all property in the city.

“As we bring new construction into our community it increases the EAV,” Cagnoni said. “If we have a flat tax levy and we increase the EAV, it’s going to drive the rate down for our taxpayers.

“Ultimately that’s a significant goal of our organization is to reduce the tax burden onto our property (tax) payers.”

Cagnoni said the city has set aside $365,000 in its federal coronavirus stimulus money for the rebate program. He said the fee waivers are estimated at less than $100,000 combined.

“When you look at the budgeting efforts of our Finance Department, that’s insignificant to have an impact on our overall budget,” Cagnoni said.

This article is by Kevin Haas. Email him at khaas@rockrivercurrent.com or follow him on Twitter at @KevinMHaas or Instagram @thekevinhaas and Threads @thekevinhaas