Metro Multi-Family Construction

[earthling]

^Which is a part of a lender's bet and risk assessment. Seems so far they've been confident in KC market but don't be surprised if permits slow down for metro as a whole, though would expect streetcar corridor to do well long term as well as any potential future lines.

[CrossroadsUrbanApts]

Don't worry the City Council will impose linkage fees on new development just in time for the big slowdown in new construction as all those apartments get absorbed and rents keep staying flat (in Class A, at least).

From the NPD Committee agenda this week:

210688 Directing the City Manager to issue a Request for Proposals for a nexus study to evaluate the implementation of linkage fees on commercial development within the City for the purposes of funding workforce and affordable housing and to evaluate and develop a commercial linkage fee program within the City.

[Riverite]

Don't worry the City Council will impose linkage fees on new development just in time for the big slowdown in new construction as all those apartments get absorbed and rents keep staying flat (in Class A, at least).

From the NPD Committee agenda this week:

210688 Directing the City Manager to issue a Request for Proposals for a nexus study to evaluate the implementation of linkage fees on commercial development within the City for the purposes of funding workforce and affordable housing and to evaluate and develop a commercial linkage fee program within the City.

Linkage fees don’t really make sense in KC, as there is most definitely a net tax benefit from having the development than not unless they have insane tif

[earthling]

This is from Collier's Q1 report, Q2 report might be another month. It shows a whopping 9% inventory increase for Central KC in just a year. The industry considers over 3% as risk of overbuilding if absorption doesn't keep up. Some of that might be existing Class B/C apt buildings taken off market, restored/reconfigured to Class A, then put back on market so might skew what 9% means, not sure but would think not the case. Refurbs shouldn't be considered new inventory.

[langosta]

This is from Collier's Q1 report, Q2 report might be another month. It shows a whopping 9% inventory increase for Central KC in just a year. The industry considers over 3% as risk of overbuilding if absorption doesn't keep up. Some of that might be existing apt buildings taken off market, restored/reconfigured, then put back on market so might skew what 9% means, not sure but would think not the case. Refurbs shouldn't be considered new inventory.

Not sure how that’s possible unless you have a very narrow definition

[earthling]

^Which part, refurbs being considered new inventory? Yeah would think not. BTW 9% jump in inventory explains why occupancy lowered down to 92% for Central KC as a huge jump will do that.

[AlkaliAxel]

Don't worry the City Council will impose linkage fees on new development just in time for the big slowdown in new construction as all those apartments get absorbed and rents keep staying flat (in Class A, at least).

From the NPD Committee agenda this week:

210688 Directing the City Manager to issue a Request for Proposals for a nexus study to evaluate the implementation of linkage fees on commercial development within the City for the purposes of funding workforce and affordable housing and to evaluate and develop a commercial linkage fee program within the City.

What's a linkage fee?

[flyingember]

Don't worry the City Council will impose linkage fees on new development just in time for the big slowdown in new construction as all those apartments get absorbed and rents keep staying flat (in Class A, at least).

From the NPD Committee agenda this week:

210688 Directing the City Manager to issue a Request for Proposals for a nexus study to evaluate the implementation of linkage fees on commercial development within the City for the purposes of funding workforce and affordable housing and to evaluate and develop a commercial linkage fee program within the City.

What's a linkage fee?

http://www.mitod.org/linkagefees.php

[earthling]

Don't worry the City Council will impose linkage fees on new development just in time for the big slowdown in new construction as all those apartments get absorbed and rents keep staying flat (in Class A, at least).

From the NPD Committee agenda this week:

210688 Directing the City Manager to issue a Request for Proposals for a nexus study to evaluate the implementation of linkage fees on commercial development within the City for the purposes of funding workforce and affordable housing and to evaluate and develop a commercial linkage fee program within the City.

Linkage fees don’t really make sense in KC, as there is most definitely a net tax benefit from having the development than not unless they have insane tif

Yes shouldn't be used but if so at most if significant incentives involved. The City should perhaps instead come up with an incentives program for refurbing dilapidated homes/buildings, dedicated to mixed affordable housing.

[flyingember]

Don't worry the City Council will impose linkage fees on new development just in time for the big slowdown in new construction as all those apartments get absorbed and rents keep staying flat (in Class A, at least).

From the NPD Committee agenda this week:

210688 Directing the City Manager to issue a Request for Proposals for a nexus study to evaluate the implementation of linkage fees on commercial development within the City for the purposes of funding workforce and affordable housing and to evaluate and develop a commercial linkage fee program within the City.

Linkage fees don’t really make sense in KC, as there is most definitely a net tax benefit from having the development than not unless they have insane tif

Yes shouldn't be used but if so at most if significant incentives involved. The City should perhaps instead come up with an incentives program for refurbing dilapidated homes/buildings, dedicated to mixed affordable housing.

What would you do differently from the existing program?

https://www.kcmo.gov/Home/Components/News/News/1576/625

[Riverite]

Linkage fees don’t really make sense in KC, as there is most definitely a net tax benefit from having the development than not unless they have insane tif

Yes shouldn't be used but if so at most if significant incentives involved. The City should perhaps instead come up with an incentives program for refurbing dilapidated homes/buildings, dedicated to mixed affordable housing.

What would you do differently from the existing program?

https://www.kcmo.gov/Home/Components/News/News/1576/625

I like the mint prototype in Lykins hopefully it works well.

https://www.google.com/amp/s/www.brooki ... tself/amp/

I think localizing context is always a good solution, and neighborhoods pooling resources to manage housing to make it affordable seems smart. I think KC could even get help some of them started. I don’t think KC is really all that unaffordable although it’s good to make sure it doesn’t hit that inflection point. I’m not sure forcing developers to subsidize affordable housing is a good idea unless they are asking for a lot of TIF. There are still plenty of cheap places very close to downtown that have good bus access. I feel like sometimes there is this idea that if it isn’t on the west side of town then it doesn’t exist.

I just feel like ignoring the really affordable places we have now and hang tying the development just means there is less housing in the middle

[earthling]

^An additional approach could be for City to find national landords with a track record of being responsible landlords for affordable housing and market enticing incentives to refurb masses of dilapidated/abandoned homes in city. Need to directly approach several with an enticing pitch more attractive than other city programs elsewhere, not just publicly market incentives as an open call. Granted, maybe not as easy as it sounds if even realistic.

[beautyfromashes]

Seems the city gets money from TIFs when they expire. Why not spend that money on affordable housing? We have many TIFs that will expire fairly soon. Where is that money going to be spent?

[Riverite]

Seems the city gets money from TIFs when they expire. Why not spend that money on affordable housing? We have many TIFs that will expire fairly soon. Where is that money going to be spent?

Haha I agree and think they could allocate it towards affordable housing, but I also think any public discussion of TIF invariably turns into a witch-hunt

[flyingember]

Seems the city gets money from TIFs when they expire. Why not spend that money on affordable housing? We have many TIFs that will expire fairly soon. Where is that money going to be spent?

So basically, you want a Linkage Fee but it's not a specific charge to the owner of a property but it's a portion of their taxes they would otherwise pay?

The problem with that is too many companies try to get their assessment lowered, like this:
https://www.assess.co.polk.ia.us/info/w ... Fall18.pdf

So if we're redirecting property taxes and the retail project stops paying TIF and they pay less and less money there's no money.

Thus linkage fees which don't relate to assessment but are independently determined seem like the best plan.
I would create them with a term and legally tie them to the property so if the company moves out they still pay them. If they sell the property the new owner pays them. Basically setup a form of special assessment.

Could write the terms so the money goes to the community immediately around the project. The argument thus becomes we're creating customers for retail.

[beautyfromashes]

So basically, you want a Linkage Fee but it's not a specific charge to the owner of a property but it's a portion of their taxes they would otherwise pay?

The problem with that is too many companies try to get their assessment lowered, like this:
https://www.assess.co.polk.ia.us/info/w ... Fall18.pdf

So if we're redirecting property taxes and the retail project stops paying TIF and they pay less and less money there's no money.

Thus linkage fees which don't relate to assessment but are independently determined seem like the best plan.
I would create them with a term and legally tie them to the property so if the company moves out they still pay them. If they sell the property the new owner pays them. Basically setup a form of special assessment.

Could write the terms so the money goes to the community immediately around the project. The argument thus becomes we're creating customers for retail.

No, I want every new TIF, once it expires and starts paying full property tax, for all or a portion of that money to go into an affordable housing fund. The city shouldn't miss it because it's a new revenue stream since the property before the development was likely paying very little property tax if it was an abandoned building or empty lot. This would be much better than adding a linkage fee which could be considered a deterrent to development.

[AlkaliAxel]

So essentially a linkage fee is a tax? Why are they trying to raise a tax on development all of the sudden right when we're gaining...?

[beautyfromashes]

So essentially a linkage fee is a tax? Why are they trying to raise a tax on development all of the sudden right when we're gaining...?

Politics.

[earthling]

Newmark Q2 report claims KC metro's absorption is keeping up with supply. Makes sense that absorption would pickup after winter. If multiple reports show KC's absorption keeping up, should help maintain developer interest in KC.


https://www.nmrk.com/storage-nmrk/uploa ... 142832.pdf

[flyingember]

No, I want every new TIF, once it expires and starts paying full property tax, for all or a portion of that money to go into an affordable housing fund. The city shouldn't miss it because it's a new revenue stream since the property before the development was likely paying very little property tax if it was an abandoned building or empty lot. This would be much better than adding a linkage fee which could be considered a deterrent to development.

So you have the goal.

How do you do this? The city doesn't collect property taxes, each county does, so there's no special fund that separates post-TIF property taxes from all other taxes. Property taxes just go into one giant bucket in the general fund.

You need a method to (re)allocate money within the city budget. If properties asses lower does the fund get less money? If a project is making payments in lieu of taxes how do you adjust for this?

Seems like you're just asking for the city to increase it's allocation. At that point why bother with the source and just take a percentage of the general fund instead?