Editor of the Herald

We have followed with interest the tax abatement policies implemented by our elected officials to spur an increase in construction of new single and multi-family homes in our area. If we understand correctly, those proposing to build homes or apartments in Austin and Mower County can apply to have their property taxes frozen, or “abated” for five years at their current level.

The program seems to be working as evidenced by numerous applications, some in excess of $400,000, being put before the taxing authorities for approval. And the August 24th edition of the Herald contained news of a new 82 unit apartment complex coming to Austin as a result of the tax abatement policies.

The unspoken downside is, of course, that those property owners not building homes or apartments will likely be picking up a share of any tax increases in the next five years that would normally be attributable to the new construction. U.S. Census Bureau Quick Facts estimates the median value of owner-occupied housing units in Mower County (2012-2016) to be $114,100. Although the census figures are old, this policy appears to be a government mandated transfer of wealth from current homeowners to those building homes at least twice as valuable as compared to the median. While additional homes and apartments are needed, would a limited abatement work almost as well?

Regarding the abatements being approved for rental housing units, will there be a benefit to the community, besides having additional rental units available? Will some tenants be afforded a reduction in their rent as a result of the abatement, or will taxpayers need to provide rent subsidies to some due to high rents?

The policies curiously exclude any mention of rebates to the owners of older single family homes who wish to make improvements to their property. We have to assume that their assessed valuation will rise with their improvements, along with their taxes. They will not get the five-year abatement, but will have to also help pay for those abatements afforded the applicants under the current policies.

Austin and Mower County have always enjoyed a high percentage of home ownership, resulting in stable families, great schools and churches and access to good health care. Housing costs have still remained quite affordable for most, but the emphasis now seems to be on building higher value homes and rental units. It would seem that the best way to assure a continued supply of affordable housing would be to first encourage the preservation of existing housing by resident owners with similar tax incentives, low-interest loans, and how-to expertise. A look at modifying current building codes for older structures may also be helpful. In return, these families would then have increased equity if they desired to move up to a higher value home.

Olmsted County is continually talking about the lack of affordable housing. A state task force is struggling with the same issue and wondering where the money will come from to create more housing. The solution often seems to be building more subsidized apartments that prevent the occupants from building equity. We believe that communities choose this problem to some extent by banning small backyard homes for aging parents, banning manufactured housing and enacting overly prescriptive codes and zoning laws. It would seem that allowing more choices could allow a young family to own a home that is affordable at less or no cost to the taxpayers, allowing them to make ends meet while building equity and becoming a stable part of our community.

With elections around the corner, we are hoping that some public discussion can take place among the candidates regarding this subject. It would also be helpful for the voters to have a running dollar total of abatements approved by each unit of government to date and who pays the cost.

Bruce and Chris Henricks

Austin