The Fergus Falls City Council plans to continue the single- and two-family tax rebate program in 2021.
There were 35 new housing starts in the city in 2020. According to Fergus Falls Community Development director Klara Beck, 31 of those housing units were approved in the single and two-family property tax rebate program. What is eye-catching about the number is that it is more than twice the homes built locally in 2019.
The City Council held a 7 a.m. work session meeting Wednesday with some members gathering at City Hall and others attending via interactive video.
The county-led program encouraging the construction of new primary residence housing is also designed to replace dilapidated housing. The program has been operating since Jan. 1, 2020, and is set to end Dec. 31, 2022.
A home built in Fergus Falls can qualify for a city rebate of $5,000. The past year saw the city commit to $155,000 in rebates. Ten of the 31 housing units built in 2020 were single family homes. The remaining 21 were designed as twin homes.
The homes represented a mixture of developer and owner-built projects and represent more than $9.8 million in estimated housing value according to Beck.
City finance director Bill Sonmor said Wednesday afternoon that “we haven’t seen anything this high since the late 1990s, early 2000s.
The average price of a home in the program? $317,370.
Sonmor told the council that over a 10-year period the program’s 2020 building will generate new property taxes amounting to $550,000. He added that because of the $5,000 rebate, the actual gain in new taxes over a decade will be $395,000.
Yet there is something much deeper about the program. Like Kevin Costner in “Field of Dreams,” the program is an unwritten invitation for people to come, live and work in Fergus Falls.
“What we are trying to do is lower the barrier, to create an environment for people who want to build houses in the city,” Mayor Ben Schierer said. “The overriding principle is that we are a community that wants to encourage development so we can grow our tax base.”
When county officials first brought the rebate plan to the city council they saw a crying need for new housing in Otter Tail County. They had realized that if you want people to come to your area you have to provide the infrastructure - in this case - the places for them to live.
Otter Tail County Commissioner Lee Rogness was one of the online viewers who spoke up during the work session.
“We’re not only building houses but we are creating places for people to live that we want to work in our community,” Rogness said. “It is perceived that we are trying to create jobs and that is how we are going to grow our economy and there is without question truth to that, however, if we don’t have a place for our worker to live, he or she will never come to our community to take that job and we have jobs that are going unfilled on a regular basis. Filling jobs has ultimately become the need.”
Rogness also sees the program as an economic engine for the community and very encouraging for those businesses engaged in the trades.
“I hope it becomes a win-win for our community,” Rogness said.
Councilmen Justin Arneson, Jim Fish, Brent Thompson and Tom Rufer also voiced their support for the program.
The City Council will convene again at 5:30 p.m. Tuesday in a regularly scheduled meeting. The meeting will be held at City Hall but the capacity of the chambers is 25. Schierer pointed out the meeting will also be presented on an interactive video feed.