City Plan Director Jeremy Skinner talks to a small crowd Wednesday night at Eisenhower Elementary about the concept of residential TIF districts. Another meeting at Eisenhower and two at Harrison Elementary are scheduled before the city considers establishing two districts. On the far right is city council member Cindy Dobbins. InkFreeNews photo by Dan Spalding.

WARSAW — Jeremy Skinner spent as much time Wednesday, Oct. 16, explaining what a residential TIF District is as he did explaining what it was not.

Warsaw’s Plan Director led a discussion Wednesday at Eisenhower Elementary in front of a sparse crowd in the first of four public meetings about plans to establish two residential TIF Districts, which is a new strategy allowed by the state for municipalities to help create more housing.

Municipalities, including Warsaw, have depended on tax increment finance districts for some 30 years to help stimulate economic development and a new state law sets the stage for cities to use that tool to help stimulate residential development.

Establishing TIF districts in certain geographical areas allows municipalities to collect new revenue from new development and use that money for infrastructure — often utilities and roads — to stimulate further development.

Warsaw has numerous TIF districts for economic development and those have been the driving force that has fueled everything from the city’s Central Park to the continuing development of the two industrial parks on the north side.

Less than 10 residents, including City Councilman Cindy Dobbins and council candidate Chris Plack, attended the meeting.

But those in attendance did have some questions.

One woman asked what type of housing the city seeks to develop. Others questioned if it would involve apartments or low-income housing.

Skinner said their primary goal is to develop single-family homes that are considered workforce housing and would carry a minimum sale price of roughly $180,000.

Skinner was asked if the city plans to buy land within the district. He said that is not the city’s intent.

He was asked about the tax impact and said that it would not lead to an increase in taxes and that new residential development would instead boost the tax base and help limit any hike in the tax rate.

He also pointed out that a TIF district does not affect zoning.

The development of housing in the two districts will be shaped by recommendations that will be part of a housing study the city will receive within the next few months, Skinner said.

“We’re talking about market-rate affordable housing. For our target, we think it will be in the $180,000 to $250,000 range,” Skinner said. “Until that housing study tells us exactly what gaps we’re not hitting, it’s hard for me to say.”

Local housing construction fell off dramatically in the 2008 recession and has been slow to recover. The impact on developers has lingered for years.

“The issue we have is we have builders, we have lots, but they don’t have access to the capital that is sustainable for them to build ten homes at the price point they are trying to get,” Skinner said.

Providing infrastructure, Skinner said, could be an incentive.

Much of the discussion involved why there has been a lack of housing construction on the south side of the city.

Paul Scheuer said there are more than 50 lots available for construction in the area, yet there is little development. He said the biggest concern is the lack of services on the south side and pointed repeatedly to the lack of a grocery store after Marsh Supermarkets and Owens closed stores in recent years.

Skinner said the city has attempted to see those two empty stores filled with a grocery store and are continuing to try to work on the issue.

“Without providing services that this side of town needs, you’re not going to get the growth,” Scheuer said.

The process of establishing the districts would require approval by the redevelopment commission, the plan commission, city council and the Warsaw Community’s School Board. The city hopes to do this by the end of the year.

Municipalities that qualify for residential TIF districts must have less than 1 percent of new residential housing compared to the amount of existing single-family homes in a three year period. Skinner said existing stats would accomplish that, but since the city has seen residential housing construction rise in the past year, it would likely not qualify if the process is delayed into next year.

The TIF districts could exist for up to 20 years. Dobbins asked if it could be a shorter amount of time. Skinner said that is possible and that if the districts spur residential development to their satisfaction, the city could discontinue the tax arrangement.

The second meeting at Eisenhower will be at 5:30 p.m. Oct. 30. Meetings at Harrison will be Thursday, Oct. 17 and Oct. 28. All meetings start at 5:30 p.m.

Skinner said he was not surprised about the low turnout and admitted that many people don’t understand how TIF districts work.

He said he expects the city will eventually approve the two districts.

The dark blue area of the map shows the outline of the proposed southern residential TIF district that includes Eisenhower Elementary

The dark blue area of the map shows the outline of the proposed northern residential TIF district that includes Harrison Elementary.