And now the city staff has pitched a pilot program, which requires council approval, to waive thousands of dollars of permit fees so low-to-moderate-income residents can build new homes. Those fees are often a barrier to new construction, said Liz Hayden, executive director of Neighborhood Services.
“We are trying to figure out how to move forward with the city’s goal of adding new housing units to our community, especially in our traditional neighborhoods, like the Jefferson neighborhood,” she said. “(Permit fees) are a significant cost, it’s a real cost as part of someone’s building a new home, and we’re trying to figure out how to get new homes built in our neighborhoods and overcoming cost barriers is probably the biggest challenge we’re trying to figure out.”
Hamilton City Council will further consider this pilot program (which would run for three years) later this month, and vote on it March 12. The initial plan is for any vacant lot in the Jefferson neighborhood, but the project area outlined also includes parts of the East End and Riverview neighborhoods.
As city staff perfects this process, Hamilton City Manager Craig Bucheit said they plan to eventually apply it across the city. However, they had to start somewhere and chose the greater Jefferson neighborhood area, one of the city’s most economically challenged neighborhoods.
Citywide, there are hundreds of vacant lots with established infrastructure supporting them, from roads and sidewalks to utilities. Getting these properties back into a productive use is a priority, which means new homes which Bucheit said represents “workers in our workforce, students in our schools, customers and neighbors in our neighborhoods.”
The pilot program works like this: over the next three years, the first 30 new single-family homes to be built in what’s being dubbed the Jefferson+ area would be eligible to have utility and building permit fees waived apart from paying for the utility meters to be install. The meter installation is an $850 cost. Prospective homebuyers could save upwards of $9,200 in permit fees.
Neighborhood Housing Services of Hamilton and Habitat for Humanity have been tapped to partner on the new homes builds. Both organizations have worked with the city in the past, and NHS is a partner in that December-approved city plan to build new homes on East Avenue.
Habitat for Humanity of Greater Cincinnati spokesperson Sarah Reynolds said they’re still working out the details of their role in this project, but supports efforts that lead to affordable homeownership.
“We believe that thriving community means a mix of different housing options at every income level, and we fill that niche,” she said. “Home ownership means stability. When you’re renting a lot of times, you’re at the mercy of the landlord.”
Clients of Habitat for Humanity are usually low-income first-time homebuyers, and after taking financial and homeownership classes, they can purchase their home with a mortgage with a zero percent mortgage, with payments no more than 30 percent of their income.
Credit: Nick Graham
Credit: Nick Graham
“Once you’re able to have a home and a mortgage that is affordable, you are able to focus on other aspects of your life,” Reynolds said. “We find that homeowners get more involved in their communities, there’s civic engagement, they commit more of their resources to their health, to higher education, to increased job training.”
The primary requirement for Hamilton’s permit waiving program is that any prospective home-buyer must be an owner-occupant and the deed must include a five-year owner-occupant restrictive covenant.
Hayden said the permit fees typically cover staff time processing applications, and though the city will absorb that cost on the front end, they can eventually recoup the waived utility fees once they are put back into productive use.
According to city projections, if new homeowners are the average utility user, water and sanitary sewer fees could be recouped in less than four years, natural gas fees in less than five years, and electric fees in less than four months.
There is no opportunity for repayment of waiving the building permit fees.
Bucheit said this pilot project “is an investment” in the city’s neighborhoods and its infrastructure.
“It’s going to be a utility customer for 100-plus years, generations of income there for our utilities,” he said. “There’s a vacant lot there now that’s consuming resources, city staff for maintaining those, and to be able to eliminate that cost, this is a great proposition for us.”
While it requires city council approval, some members voiced support for the project.
Council member Tim Naab called the project “out-of-the-box thinking” as it’s pushing toward fulfilling a promise to the city. He said these traditional neighborhoods “need that breath of new life.”
“Having people live there, work there, play there, families moving in that are confident in what we’re trying to do in re-energizing those traditional neighborhoods that need the new parcels,” he said. “We’re excited for this opportunity.”
Mayor Pat Moeller said the short-term cost will have “multigenerational gains.”
“This is how you create a family neighborhood is by having these types of projects,” he said, adding homeownership increases quality of life.
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