Local governments could finance housing projects with property taxes

Local governments could borrow money and charge property owners to pay for district infrastructure. A district must cover at least five acres, require at least $5 million in development costs, and be planned to devote more than half its space to housing. A local government decides whether to approve a district after a public hearing; approval is at its discretion. Charges must be divided among properties according to the benefits they receive. Up to five percent of collections may go to administrative costs. Debt could last no more than 30 years. The district ends when all debt for its infrastructure costs is paid.

Participating local governments and taxing authorities could pay developers a share of property taxes from approved housing projects. A project must include at least 15 housing units in a district of no more than 1,000 acres. At most 20 percent of the district may be zoned for agriculture when the local government adopts the ordinance. A local government decides whether to create a district and approve an application. It may approve a project only if the developer would not start it without the payment. A taxing authority may join by passing a resolution. The developer and participating governments negotiate the tax share, payment period, and other terms. Payments would be annual, start six months after the project begins, and last up to seven years for new construction or 15 years for projects solely renewing existing buildings.

Local governments could create either type of housing district together and could change planning reviews in a housing development district. The joint process applies to residential infrastructure districts and housing development districts. Owners must receive notice when property is proposed for a housing development district. Local governments acting together must sign an agreement and follow the district procedures. They may hold one joint hearing for a residential infrastructure district. A planning exemption or alternative review process requires a public hearing and a separate vote. An alternative process cannot be more demanding than review for similar projects outside the district. An owner has 30 days after the district ordinance is adopted to ask the local government to exclude their parcel.