Manager's Note: Before reading this featured message, if you need a helpful reminder about tax increment districts (TID) or how increment works in a TID, I encourage you to click here and read through our May 30, 2019 overview on TIDs.
A common message heard by the Village from community members is the desire for more affordable housing options in Shorewood. It was a common response included in the 2019 community survey, 2020 Housing Market Study and Needs Analysis, and several of our elected officials hear this message while communicating with residents. State statute 66.1105(2)(ab) defines affordable housing as "housing that costs a household no more than 30 percent of the household's gross monthly income."
State legislation back in 2009 provided a provision that allows municipalities to extend the life of a Tax Increment Finance (TIF) district for up to one year for the purpose of using the TID increment generated from that period to benefit affordable housing. The Village can complete this action as long as a resolution is passed by the Village Board prior to April 15, 2021 that indicates the funds will be utilized in accordance with the statute requirements.
In 2020, the CDA and Village Board agreed on discussing the extension of Tax Increment District (TID) 1 as a priority in order to evaluate affordable housing options. Currently, TID 1 is scheduled to close in 2021 based upon the increment it will receive from the 2020 tax levies. Regardless of whether TID 1 closes or is extended for purpose of affordable housing, underlying taxing jurisdictions such as the Village, Shorewood School District, Milwaukee Area Technical College, Milwaukee County and Milwaukee Metropolitan Sewerage District will receive a portion of the residual balances of the existing TID balance associated with the current TID 1 currently estimated to be a total of $1,325,000. Extending the TID for affordable housing would allow the TID to generate one additional year of tax incremental revenues in 2022. These funds would be set aside in their entirety for that purpose. This action would not impact the amount or timing of the distribution of the current TID 1 residual funds.
State statute 66.1105(6)(g)3 reads "if a city receives tax increment...the city shall use at least 75% of the increments received to benefit affordable housing in the city. The remaining portion of the increments shall be used by the city to improve the city's housing stock." TIF law does not provide a deadline for using tax increment funds, so the Village can further discuss how to utilize the funds if there is a project that is only using a portion now, the rest could be used at a later date.
The Village Board voted to approve the TID 1 extension at their regular meeting on Monday, March 1 at 7:30 p.m. If you have any questions about the action to extend the life of TID 1, please contact Village Manager Rebecca Ewald at 414.847.2701 or via email at firstname.lastname@example.org for more information.
The Village Board adopted a TID Creation and TIF Assistance Policy on Monday. The policy passed by a 7-0 vote. The development of the policy took a strong collaborative effort from Village leaders, and it will serve as a guide to future TID and development projects for Village staff, the Community Development Authority (CDA) and the Village Board. The policy breaks down into five sections: (1) public assistance process, (2) requirements and evaluation criteria, (3) TIF goals, (4) policy statements, and (5) hiring and contracting for TIF funded projects. Click here to view the approved policy.
The policy originally went to the Village Board on January 25 for consideration, but it was sent back to the CDA to make adjustments to the policy. One of the major adjustments to the policy was to further define the disadvantaged class related to hiring and contracting requirements. The policy also added a statement that there must be other benefits to the project besides increasing the tax base to provide TIF assistance. There is a stronger emphasis on sustainability goals and green infrastructure now included in the policy. Another statement added clarified that development with only luxury and market rate housing is not eligible for TID creation or assistance. Lastly, language added confirms the developer will pay for all third-party costs associated with the review of the application, TID creation, and assistance.
The Village wants to personally thank members of the Village Board and the CDA for investing extraordinary amounts of time drafting this policy. The Village was able to listen to multiple opinions to formulate a strong and detailed policy that establishes impactful goals and clear guidance when the Village may receive an application for TID creation or TIF assistance. A special thanks to Conservation Committee members who met with the CDA Chair Peter Hammond and Village Manager Rebecca Ewald to include stronger language on sustainability and green infrastructure goals in the policy. It is so helpful to have engaged volunteer committee members who provide helpful feedback in policy areas that need attention and remain a high priority for the Village.
If you have any questions about the policy, please contact Village Manager Rebecca Ewald at 414.847.2701 or via email at email@example.com for more information.