The city of Carbondale is exploring the option of adding a residential TIF district to turn rental houses into owner occupied homes.
The Carbondale City Council will hear an informational proposal from city staff to establish a tax increment finance district at Tuesday’s meeting.
The TIF district will be located in the city’s arbor district with the goal converting rental houses into owner occupied homes.
Economic development director Steven Mitchell says the creation of the TIF district can help fill some empty spaces left by declining enrollment.
“We’ve got a lot of vacant rental properties is what it’s done and so the time is right I think to be able to convert some of those properties into owner occupied.”
The arbor district has 242 properties and 153 of them are rentals.
If a house is converted from a rental and remodeled, then value increases which increases the property tax.
That difference or increment in property tax goes to the TIF fund.
“The developer gets 75% of the increment and 25 comes back to the city to do things like infrastructure improvements.”
Mitchell says about 70% of the housing units in Carbondale are rentals, but there’s an important rule to remember about the TIF.
“New construction is not reimbursable whereas redevelopment of an existing property is reimbursable as well as the purchase price.”