Citizen Residential Tax Abatement Meetings
Questions & Comments

South Side Library
11/01/05

QUESTIONS:

• Has the city calculated models for the numbers being proposed for tax abatement changes/proposals?
•  Has the city considered a date for end of residential tax abatement?
•  What other US cities have gone through a similar process with tax abatement?
• Has the amount of tax value abated been totaled?

COMMENTS: 

• Keep tax abatement the same as it is now, as it makes Des Moines’s older neighborhoods more viable, as well as sustaining or building on new construction starts.
• Tax abatement, as a tool to attract residential development downtown is an attractive one in luring new housing starts.
•  Tax abatement on new construction does not benefit all existing homeowners.
•  There is a negative perception of the City of Des Moines that some people have, tax abatement provides an attractive incentive in luring residents to the city.
•  With the increased desirability of the downtown housing market, a 10-year tax abatement incentive may not be required to spur residential development.
• There are people possibly abusing the tax abatement process in never having to pay taxes on improved property in the City of Des Moines by moving from house to house when tax abatement ends.
•  The increase in value of the local housing market, and associated costs with real estate transactions may limit people from switching from house to house when residential tax abatement ends.
• Conduct a comparison with Des Moines metro area cities on how they fared before and after tax abatement was initiated.
•  Development and construction companies would use the continued implementation of tax abatement as a tool in deciding whether or not to build in Des Moines.

East Side Senior Center
11/02/05

QUESTIONS: 

• What types of improvements on existing homes require permits, or will tax abatement apply to?

COMMENTS: 

• Retain five year full residential tax abatement, reduce downtown residential tax abatement to five years, full abatement—on a test basis only to evaluate the amount of residential housing starts, tax revenue coming in, etc.
•  “Cap” tax abatement on homes with higher values.
•  Tax abatement spurs development within Des Moines, helping to balance growth metro-wide.  Growth in Des Moines helps change opinions and/or misconceptions about the City of Des Moines being a safe, livable community.
•  Provide a continued level of abatement to senior citizens, long time homeowners.  Such abatement for seniors may retain those who may wish to move away from Des Moines.
•  Larger cities in Iowa could lobby their legislators to change the tax abatement laws within the State Code, to provide equity to long-time homeowners who maintain their property.
•  There needs to be more homeowner education/advertisement about tax abatement, including the reinforcing fact that taxes on improvements will be due at some point.
•  Tax abatement is an incentive to redevelop older neighborhoods, encourage infill development, increasing the pride in homeownership, keeping neighborhoods viable.  It also makes putting proper improvements into existing houses more enticing.

Weeks Middle School Library
11/15/05

QUESTIONS:

•  None.

COMMENTS: 

• Renew for 3-5 years and allow Council to have flexibility to have 10 years.
• Leave as is.
•  Abatement is essential to compete and increase population.
•  Leave as is.
•  Keep 5-year abatement, its sacred.
•  Track whose going into units.
•  Downtown market is not mature enough to end tax abatement.
•  Need infrastructure and units before reducing abatement.
•  Keep as is.
• Build out in 3-5 years.

Northwest Community Center
11/16/05

QUESTIONS: 

• Why is it so difficult to crack the surrounding neighborhoods?  Is there something working in other places around the country that staff can utilize?
• Are there some other options used by other metro cities?
•  Can a notice be sent out to homeowners, especially highlighting abatement on repairs?
•  Is it retroactive?
•  Do some homes have a higher target for rehab/repair?
•  Did they build the malls because people quit coming downtown or they didn’t want people to go downtown?

COMMENTS: 

• Downtown is void of residence; need people downtown to create a vital city. Enjoy quality of life downtown. 
•  Building rental property downtown requires assistance.  Could not build downtown without incentives, both developers and potential residence.
•  Tax abatement means that tax rates stay the same.
•  Development creates jobs and a general benefit.
•  Short sided to cut back tax abatement, especially in the downtown.  Downtown will not be built in a decade.  We are at a threshold of reemergence. 
• Developers do not receive the incentives, homeowners do.   Cannot create demand.
• Energy efficiency tied to tax abatement should be discussed.
• 1960 $400/yr and now its $2,000.  If people can move into $400,000+ condos they should be able to pay for the taxes.
•  Ten years with no taxes is too much for $500K homes; if you can afford the home you should have to pay some sort of taxes.
•  Easter Lake homes hitting the tax rolls at a rate of $4.5 million per year.  Most of the homeowners have remained.
•  Land taxes are always there.
• Applaud the idea that we need stronger incentives to build in the infield lots such as changes to the building code.
•  Unfair for the high dollar properties not to pay taxes.
•  Did not know that tax abatement is available for existing home improvements.
•  Only learned about tax abatement on home repairs/improvements when City inspected home.
•  East side development that adds $3-4 million in taxes annually.  The reason that we are able to build is tax abatement.  Majority of residence are from the area and wanted a new home.
•  Concerned about tax abatement for a sizeable improvement.
•  Zoning Board of Adjustment receives numerous requests for infill.  Price points are so tight that projects could not be done without tax abatement; if you don’t have tax abatement vacant lots will remain so and developers will not come in to build.  Will probably take longer than 5 years.
•  In favor of tax abatement – 10 years is a short for a city. Helps maintain older housing stock.
•  10 yrs to fix up old houses
•  Without tax abatement projects would not happen.
•  Alternative to tax abatement is to let structures/houses just sit there.
•  Look at Easter Lake and north side.  Probably would not be built at the current level without tax abatement.  Downtown, condos add a lot more money to the tax base in 10 years.  Without tax abatement there would be empty houses downtown.
•  Tax abatement is an investment in the future for additional tax base and new business in the downtown.
•  Restoration is difficult in conjunction with abatement because you apply tax abatement at the end and taxes never go back to the base. Restoration (slow restorers) needs to be addressed differently in the process.
•  Do something about residential commercial, apartment complex as they are taxed at 100% and downtown condos are taxed at 50%.
•  Downtown is obsolete.  Prefer it as a place to shop.
•  Five-year abatement is plenty.
•  Issue with urban sprawl and development eating up all of the farmland.
•  People are selling a lot of the older homes for newer $300K+ homes and cars.  Others are not paying taxes while we continue to pay taxes for them.

City of Des Moines Website
11/01-11/16/05

• We have done several home improvements and feel we should have tax abatement coming soon.  We need reassessment of our home, as it is not showing our house correctly on the assessor’s web page.  How do we apply for tax abatement?

•  I was unable to attend the tax abatement meetings that were held these past couple of weeks. I did want the council and the manager's office to know how important we feel the current tax abatement program is to the increased vitality of downtown Des Moines. We are excited to see some momentum beginning to build with several developers as well as ourselves, investing millions of dollars into the community. Very few of these planned units have been completed and sold. Please do not kill the concept before it has even begun to take root. The financial markets are all watching us very carefully and if the sales velocity or pricing does not meet projections future projects will be very difficult to finance. The current tax abatement program is our strongest selling feature. Please continue with the current program. Thank you for your consideration.

•  Regarding residential tax abatement Downtown, I urge continuation of the present 10-year full abatement.  After 20-25 years of unremitting effort, we are finally at the point where Downtown is becoming a World Class place.  Now is not the time to construct barriers or throw cold water on its development over the next couple of decades.  Tax abatement is only one tool, but it is a very important tool.

• Please keep the tax abatement at 10 years, it’s been extremely beneficial to the heightened redevelopment and buyer/investment interest downtown - it has become vital in keeping the interest and momentum going.

•  I have been involved in downtown renovation and construction matters for at least 25 years.  One only need to look around and count the new and renovated structures to see the construction and renovation that has occurred and the success our downtown has experienced.  It is critical for Des Moines' future continued growth and success that the tax abatement program be renewed and continued without change.  And, frankly, our residential areas need all the help they can get--the suburbs are rapidly outdistancing us, and the pace will accelerate if the residential tax abatement program is not continued without change.

•  As a former Councilman for 10 years, I am concerned that the City does not have a transparent long term Budget Model that is regularly updated (at least annually) projecting the trade-offs between TIF Bonding, Tax Abatements and the net burden on property owners in the City over 10 year projection periods. I do not know how the City Council can make a rational decision about whether or how to phase out Tax Abatement or to wind down TIF Financing unless we pay attention to the broader objective--to build the City's tax base using these incentives and to eventually lower the property tax burden to Des Moines property owners, particularly in relation to the suburbs. My impression since leaving the Council in 1983, when Mr. Brooks and I pledged to wind down TIF financing to allow the tax base from downtown redevelopment to benefit the rest of the community, is that the burden has increased to those not receiving abatement benefits.

• It seems bad policy to establish TIF Districts to finance infrastructure to increase the tax base and, at the same time, to abate taxes in the same area.

• In regard to downtown housing, the 10 year 100% abatement is apparently having a considerable impact on spurring new housing projects; as a Developer, I am concerned that there are too many units chasing an indeterminate market and a shake-out will take place. If I am correct, post-2008 may be the time to suspend the abatements for housing downtown until the dust settles, the market is established and we can determine how soon the fruits of 35 years of TIF set-asides and Abatements can be enjoyed by the community at large.