New municipal tool
to encourage housing
House Bill 1588 would allow cities and towns to create special assessment districts to help finance public infrastructure needed to support housing development. These districts could be used for improvements such as roads, sidewalks, water mains, and utility extensions for projects already in the approval process.
Creating a district would require a two-thirds vote of the municipality’s governing body. The costs would then be assessed against the properties that directly benefit from the improvements.
The governing body would determine how those assessments are apportioned among the affected properties. That could be based on factors such as frontage, lot size, number of units, assessed value, or another reasonable metric. Municipalities could issue bonds for up to 20 years to pay for the improvements upfront, with those bonds repaid through the assessments levied under the new law.
These districts would differ from Tax Increment Financing (TIF) districts. TIF districts rely on the future increase in tax revenue generated by a development to fund improvements. By contrast, this special assessment district would front-load the financing through a bond, with the developer ultimately paying the cost through the assessments.
The bill has passed the House and was heard last week by the Senate Commerce Committee. READ MORE