EFFINGHAM — The Effingham Unit 40 school board has adopted a resolution presented by the Effingham/Effingham County Enterprise Zone Board that provides a tax abatement and sales tax incentives to property owners who want to build multi- and single-family housing within the zone.
City of Effingham Economic Development Specialist and Enterprise Zone Administrator Sasha Althoff presented the proposed changes to the board members. They include a short-term property tax abatement for any additional property value that results from the construction of new housing on residential property.
“Local employers are needing more employees and one of the barriers to hiring is a lack of housing in the area,” Althoff said.
Attending the meeting with Althoff were Effingham Economic Development Director Todd Hull and Effingham City Administrator Steve Miller.
Hull emphasized the changes would offer tax incentives to residential property owners deciding to build new structures or improve their property within the zone. Currently, the Enterprise Zone offers tax abatement incentives to industrial and commercial business property.
“It’s been a tool we’ve utilized over the years to attract industries and businesses into the city, assist existing businesses to expand and continue to grow,” Hull said. “We have not had the housing component as part of it (the enterprise zone). Altamont does have housing (tax incentives) in their zone and other enterprise zones around the state that has housing.”
Hull believes extending tax incentives to residential property owners would be just the tool needed to help take care of the lack of local housing for potential workers.
The changes include:
• Three-year property tax abatement of taxes over the original assessed base property value for new multifamily dwellings of two units or more.
• Five-year property tax abatement of taxes over the original assessed base property value for new construction of single family homes.
• Residential housing projects in the zone would also receive a sales tax abatement on permanently affixed building materials.
• Residential rehab projects could be eligible for a building materials sales tax abatement that would apply only for projects with a total minimum cost of $50,000.
Property tax abatements and sales tax incentives would not apply to Enterprise Zone properties that also are located in a TIF district.
Unit 40 Superintendent Andrew Johnson represents the district on the Effingham/Effingham County Zoning Board and voted to move the changes to the enterprise zone forward during the zoning board’s last meeting.
“From my standpoint, I see no reason why we should not support it,” Johnson said. “It promotes growth and I think that’s what we all need.”
He said the school board experienced the loss of a job candidate due to the lack of housing in Effingham.
“We had a young lady accept a job here in May, then turned around and resigned before summer was up because she couldn’t find affordable housing here,” Johnson said. “So, there is a problem.”
School board member Desha Wear wanted a little more clarification about the abatement before the board voted on changes to the zone.
“So the downside about that is that we don’t get tax money for three years,” Wear said. “The benefit, then, is it brings more people in and we eventually will be getting more tax money.”
Hull clarified. “It is the increase of the base (tax). So, whatever tax revenue the property is generating at the time. The taxing body gets to keep that. Just the improvements (extra property value generated from the new construction) are abated,” Hull said.