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<br />Proposed Tax Abatement & Loan Program <br />as part of Rambler Redesign Concept to revitalize aging housing stock for today 's families <br /> <br />Concept: Encourage homeowners to use quality design and reconstruction on their 40's-70' <br />style homes with a combination tax abatement and deferred loan program. These <br />types of improvements would provide amenities for today's families like what the new <br />homes are providing that are being built in the suburbs such as larger kitchen. extra <br />bathroom and bedroom, great room, large garages and appealing entries. <br /> <br />Goal: To retain and attract families with children that will diversify and strengthen the <br />community by providing a variety of housing choices. <br /> <br />Challenge: The builders market of escalating construction prices and shortage of skilled <br />contractors adds to the cost and quality design of extensive home improvements. The <br />program seeks to make the homeowners monthly payments as part of the remodeling <br />competitive with payments they would make for a home with similar features in the <br />outlying suburbs. <br /> <br />Loan: The city would provide a 20-year loan on 20% of the construction costs over $50,000. <br />. The loan would be at a zero to very low interest rate depending upon income. The <br />second half of the loan would be forgiven if the homeowner stays in the home longer <br />than 10 years. <br /> <br />Abatement: The proposed abatement would include Y2 of the new City and School District taxes <br />on the improvement. It is estimated that the abatement would equal close to the <br />amOlli1t of the payments on the City loan, making the homeowners total repaymentf <br />cost of the loan less than several thousand dollars. The City and School District would <br />then receive the remaining half of the tax increase on the improvement for. 1 0 years . <br />and the full amOlli1t after 1 0 years. <br /> <br />Why Abate? The School District is likely to realize an increase in their school population, receiving <br />or retaining a per pupil revenue that exceeds the abatement. It can be assumed that <br />families with children may not otherwise remain or come to Roseville if the housing <br />choices were not available to meet their needs. <br /> <br />Examp~e: Assume $100,000 home improvement cost, a $20,000 loan and 4 percent appreciation. <br />After 10 years the City realizes the repayment of $1 0,000 principal amOlli1t. The City <br />abatemenfequals $2,027 and the School District abatement equals $6,758. <br />After 25 yearsJhe total City tax increase equals $14,282 and the School District <br />increase equals $48,189. <br /> <br />Q:\Housing\Rambler Rcdesign\Abatememt and loan swnnuuy.doc <br />