Unicoi County officials fleshing out proposal for home building incentives

Sue Guinn Legg • Nov 13, 2019 at 9:58 PM

ERWIN — Unicoi County economic development officials are continuing to flesh out a proposed incentive plan to stimulate new home construction in Erwin.

In a presentation to the Unicoi County Commission’s Budget and Finance Committee on Wednesday, Joint Economic Development Board Director Tyler Engle revealed several new options for a proposed one-year pilot program first introduced in a September meeting the development board.

Dubbed the Residential Infrastructure and Guaranty Fund, the program would offer developers a one-time reimbursement grant of 2 percent of the assessed value of a new homes built inside the town of Erwin.

The goal is to add to a significantly short stock of housing pinpointed in a U.S. Department of Agriculture-funded study of Unicoi County conducted by SmartGrowth America.

On Wednesday, JEDB President Lee Brown told commissioners the shortage is a deterrent to people who want to move to the Erwin but are unable to find homes and will not provide for an influx of workers expected to occur with anticipated expansion and turnover in the county’s manufacturing sector.

Mitch Barton with the JEDB presented the commissioners with population data that shows the county’s death rate outpacing live births to an extent that public school enrollment and funding are declining significantly. And if not for new people moving in, Barton said, the trend would have have already had a similar impact on tax revenues.

Barton also presented U.S. Labor Department figures showing 2,860 people commute into Unicoi County to work compared to 618 people who live and work in the county and 1,486 who live in the county and commute to jobs in other communities.

To reverse the population trends, increase revenues and avoid future tax increases, Brown said, “We think we’ve got something.”

Engle presented the plan for the 2 percent rebate grants to be paid to developers upon their completion of homes with assessed values of $150,000 or greater. The rebates would be paid by the county and the town in portions equal to their percentage of property tax collections.

For a new home assessed at $194,999, Engle said the total rebate to the builder would be $3,900 of which the town would pay 49 percent or $1,599, and the county would pay 51 percent or $2,300.

Over a five-year period, he said, the property tax collections on the same home minus the one-time rebate would be $4,240 to the county and $2,939 to the town.

Engle said the percentage of the rebate grant could be adjusted upward to increase both the incentive for developers to build in Erwin and the minimum assessed value of new homes included in the incentive could also be adjusted downward to help meet the demand for more affordable housing.

According to Engle, multi-family home construction could also be included in the program and would result in greater property revenues over time because they are taxed at a higher rate.

Brown told the commissioners the county has only three options to address its population decline, “Do nothing and see what happens, which is probably a continued decline in our population and tax base. Raise taxes. Or try something new and see if we can make a difference.”

On the request of Commission Chairman Loren Thomas, Engle agreed to set up a joint meeting of the commission and the Erwin Board of Mayor and Aldermen for further discussion of the proposal.

Brown said while the incentive “needs to be countywide” the SmartGrowth study recommended beginning inside the town limits where infrastructure and utilities are already in place.

Engle said two similar incentive programs were previously implemented by the city of Kingsport with “decent results.”