Statesboro’s city government recently ordered a comprehensive study of the local housing inventory and is meanwhile updating a subdivision incentive program aimed at encouraging construction of more single-family homes within the city limits.
The housing study and plan will be done by a private firm, the Bleakly Advisory Group, and a multi-county public agency, the Coastal Regional Commission, at a combined cost of $60,720. City Council authorized this at its Nov. 17 meeting. The study is expected to take six months to complete.
“The good news is that this plan will be paid from funds remaining in the CHIP Grant Revolving Loan Fund and not from the general fund,” Statesboro Planning and Development Director Kathy Field told the mayor and council. “It has been determined that the use of these funds for a housing study is an allowable expenditure, and there is currently approximately $65,000 remaining.”
“CHIP” means the Community Home and Investment Program, which is funded through the U.S. Department of Housing and Urban Development, and the revolving loan program was created years ago to assist homeowners in Statesboro Pointe, a development by Habitat for Humanity of Bulloch County.
The original grant was closed out by the state, but the city’s fund continued to receive repayments, Field said.
Reasons for study
City officials plan to apply in 2021 for a new CHIP grant and also Community Development Block Grant, or CDBG, funds for housing and neighborhood improvements. An affordable housing plan is required for the grant applications and Statesboro currently doesn’t have one, Field said.
Beginning in fall 2019, Statesboro city officials proposed an unrelated study of only the rental housing supply and market in Statesboro in comparison to other cities. In January, Bleakly Advisory Group proposed to do that for $38,500.
But after the COVID-19 pandemic hit, council members informally put the apartment study on hold last spring to address other concerns. Some suggested that an inventory of single-family, owner-occupied houses might be added later, especially in light of Statesboro’s entry into the Georgia Initiative for Community Housing, or GICH.
The study now to be done will include all three elements. The Coastal Regional Commission, or CRC, will complete the affordable housing plan while Bleakly Advisory Group does in-depth analysis of rental housing and separately of the single-family home supply and demand both in the city and the surrounding county, Field said.
The CRC is being paid $15,000; Bleakly Group, $45,720.
Building incentives
The rewrite of the Subdivision Incentive Ordinance is not a part of the housing study. But Field also explained it to the mayor and council during their Nov. 17 work session.
Then, during the Dec. 1 regular meeting, the council received the first reading of the revamped ordinance and voted 4-0 to send it forward for potential final adoption at the council’s 5:30 p.m. Dec. 15 regular meeting.
One purpose of the incentives is to bring more single-family home construction into the city limits one way or another, City Manager Charles Penny told the elected officials in November.
“Since I’ve been in Statesboro I hear developers say all the time, ‘We can’t afford to build in Statesboro,’ so they form a ring around the city,” he said. “Hopefully, with these incentives, we may get some homes on property that’s already inside the city, but it might also be an incentive for some property that’s contiguous with us to be annexed into the city.”
A housing subdivision incentive program has been part of the city’s code of ordinances for 20 years. But the incentives it authorizes are out of date and spelled out in terms of unit prices, making them “very hard, really, for people to understand,” Field said.
The existing program also provides incentives only for subdivisions in R-20 zones, where the minimum lot size is 20,000 square feet, or nearly half an acre, and R-15 zones, where the minimum size is one-third acre, or in a planned unit development, or PUD, for single-family homes.
Extra for GICH
Field, who arrived on the job earlier this year, said Assistant City Manager Jason Boyles did a substantial part of the work to revamp the program. City staff members sought to add incentives for homes in smaller lots in areas of the city identified by the GICH program for redevelopment.
The result is a two-part proposal. Under Article 1, the city will pay a developer $10,000 per lot for homes built to standards in an R-15 or R-20 zone or an approved PUD. City crews would also install natural gas lines from the city-owned service at no cost to the developer, a benefit valued at approximately $4,000 per lot.
Those lump-sum incentives were arrived at by updating and lumping together the unit-price rewards of the existing program, Field said.
For construction of homes in neighborhoods targeted by the GICH program for rehabilitation or replacement of deteriorated housing, a completely new Article 2 has been added.
To qualify, subdivision land in a GICH neighborhood must be zoned or rezoned to R-8. Because only an 8,000-square-foot lot with setback is required, such a subdivision is denser, and would have smaller houses.
Additionally, the rules as drafted require that the homes in a GICH incentive subdivision be provided to residents making 80% to 120% of the HUD-determined median family income, which for 2020 is $54,900 for a family of four.
In addition to the $10,000 per lot payment to developers and the natural gas line installation valued at $4,000 per lot, additional incentives are planned for GICH subdivisions. These include waiving all application, permit, sewer tap fees and construction inspection fees not required by the state.
All utility lines, including power and communications cables, are required to be underground, and the ordinance pending final approval includes other requirements for both types of developments. It also provides a points system for determining which projects qualify, with the available incentives to be limited by the city’s budget.
City to recoup
The intent is for the city to recoup its spending on incentives through its property taxes, water tap fees and utility bills and to grow its tax and customer base for the longer term. For a 60-unit subdivision, the city would have an investment of about $825,000 in the incentives. In an R-20 subdivision with homes valued at $275,000 each and the subdivision fully built out, the city would recoup that investment in six years, in the estimate Field showed the council.
For an R-15 subdivision, where houses had an average market value of $175,000, the city’s investment would take nine years to recoup, according to the projections.
Field’s presentation in November had not included a return on investment projection for the GICH subdivisions, which are expected to be smaller overall. But after Councilman Phil Boyum requested one, Boyles presenting an estimate last week that nine years would be required to recover the city’s investment in a 10-home GICH subdivision with homes valued at $100,000 each.
Boyum, who made the motion for first-reading approval, added a requirement that a natural gas stub-out with a valve must be installed to each house. But homeowners will not be required to become natural gas subscribers.