RACINE — A local leader of landlords isn’t excited about the new plan to provide funds to city homeowners to fix up and improve their houses, but excludes landlords.
Two new tax districts the city is in the process of creating would provide grants and/or loans to owner-occupants. As such, landlords wouldn’t be allowed to apply for these planned grants to improve the properties they own and/or manage.
This provision irked Jon Frickensmith, the president of the Racine-based Southern Wisconsin Landlords Association.
“We applaud the fact Mayor (Cory) Mason is trying to come up with a solution to the city’s budget issues, but this is not it,” Frickensmith said in an email to The Journal Times.
Frickensmith believes that landlords would be more likely to take up the city’s offers than owner-occupants, and thus should have be given access to the planned grants/loans.
“Quite often, housing improvements don’t bring in enough additional revenue to pay back what was spent (by landlords),” Frickensmith said. “So why would the group that needs incentives be excluded? Why does Racine offer incentives to other businesses but not landlords? Like the $2 million proposed for the Tannery Project or $7.5 million for the @North Beach project,” both of which are receiving money through tax-increment financing, the type of financing planned for the two new districts.
The city, however, wants to encourage its residents to become homeowners — and to take care of their homes once they have one.
“Focusing on owner-occupied homes is a policy decision,” Shannon Powell, director of communications for the City of Racine, explained in an email to The Journal Times. “We want homeowners to be able to make improvements, fix code violations and preserve historic features of their homes. If you live in the city, and own your home, you have made a serious investment in the city and it seems fitting that the city should also try to invest in our homeowners. Over time, this is one tools that we have which will help us stabilize neighborhoods.”
These two new tax districts mirror the Rebuild Racine program, although with some significant differences.
The $680,000 that was used to fund Rebuild Racine came from a tax-increment financing district.
Rebuild Racine allowed homeowners, but not landlords, to apply for home repair loans, ranging in size from $500 to $20,000. However, those loans were more restricted than the ones currently being planned, which will likely be available for more general home improvement projects.
“The idea of the Rebuild Racine program was to help encourage more homeownership or to help people stay in the homes they own,” Powell said.
However, landlords are still eligible for some city money, primarily through the Community Development Block Grant (CDBG) Revolving Loan Fund. Through that, landlords can get loans for as low as $3,000 or up to $50,000 “to help repair health and safety issues for tenants and improve the city’s housing stock.”
Addressing the problem
Frickensmith complimented the ideals of former City Development Director Amy Connolly, who left in August to take a job in Fort Worth, Texas. Last November, Connolly said “(If) you only address two houses on the block then you’ve done nothing to address the problem … You’ve really got to get at all the houses on the block, and you’ve got to drive investment on the whole block, or else nobody on that block truly benefits from that investment.”
Frickensmith said that the grant money should be available to everyone — not just owner-occupants.
According to data from the U.S. Census Bureau and confirmed by the city, owners only occupy 53.6% of the homes in the city, far below the countywide rate of 69%. Renter-occupied homes fill the remaining approximately 42.4% in the city.
Frickensmith closed by saying he felt the new plan would be unfair for the homeowners and landlords in the new districts districts who have “done a great job of keeping up their homes,” since they would end up bearing the cost of their neighbors using tax money to improve their homes.
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