13 - Approval of the 5 in 5 Housing In-fill Development Program Guidelines Criteria & Application FormItem No. 13
TO: Mayor, Mayor Pro -Tem & City Council
Grayson Path, City Manager
FROM: Andrew Mack, AICP Director Planning & Community Development
SUBJECT: 5 In 5 Infill Development Program Guidelines
DATE: January 10, 2022
BACKGROUND & DISCUSSION
For several months now City Staff has been working to develop a new program initiative to encourage and
incentivize new infill development housing in the core area of the City. Over the past 2 decades the City of
Paris has been vigilant in its efforts to remove dilapidated and dangerous structures left abandoned,
unmaintained or vacated due to fire. This resulted in approximately 1,000 house structures being removed from
the community over this period. These vacant lots present an opportunity to have new dwellings constructed on
them where existing streets and utilities are available to support existing neighborhoods. Unfortunately, the
character of many of these older neighborhoods have resulted in a steady decline over time, however this
program offers an opportunity to turn that around by an infusion of new, good quality, decent homes that will
be of modest cost because the majority of these properties are of smaller lot sizes as compared with newer
development that has spread further away from the downtown area. Limited constraints & flexibility are keys.
With the program guidelines as proposed, an eligibility boundary has been recommended to provide a series of
incentives in the core area. This is where the need for infilling of vacant lots holds great potential to improve
the overall quality and appearance of these older neighborhoods. There are 4 primary incentives associated with
the program guidelines. An applicant must enter into an agreement for approval by the City Council to build 5
or more new dwelling units in 5 years on 1 or more parcels. Under this agreement, the incentives are as follows:
1. Low cost tax forfeit lots to be sold for $1 to builders and/or investors, with approval of all the taxing
jurisdictions. Other privately owned, non -pubic trustee parcels in the eligibility boundary area will also be
counted toward the total 5 required newly constructed dwellings all up to fully modern building safety codes.
2. A 5 year 100% tax abatement to commence from the date of final completion by the builder. Upon
completion, if the builder sells the new home(s), a request can be made to the City Council to re -assign the
tax abatement for the remaining period under the agreement.
3. Reduced building plan review and permit fees. The higher the number of units built over time, the greater
the percentage discount of the fees.
4. Reduced water & sewer labor tap fees. The higher the number of units built over time, the greater the
percentage discount of the fees.
There are a number of additional specifics built into the program contained in the guidelines. To date there has
been strong interest expressed in the program from builders we shared the initiative with. This proposed
program was discussed with a representative of all the other 3 taxing authorities and was well received.
Recommendation
Approval of the resolution adopting the 5 In 5 Infill Development Program Guidelines is recommended.
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PARIS, TEXAS
ESTABLISHING THE 5 IN 5 HOUSING IN -FILL DEVELOPMENT
PROGRAM; AUTHORIZING THE CITY TO BECOME ELIGIBLE TO
PARTICIPATE IN RESIDENTIAL HOUSING TAX ABATEMENTS AND
APPROVING GUIDELINES, CRITERIA AND AN APPLICATION FORM FOR
THE PROGRAM; MAKING OTHER FINDINGS AND PROVISIONS RELATED
TO THE SUBJECT; AND DECLARING AN EFFECTIVE DATE.
WHEREAS, Sec. 312.002 of the Texas Tax Code requires local taxing entities to state their
intent to participate in tax abatement agreements and to adopt guidelines and criteria for granting
such tax abatements; and
WHEREAS, on October 14, 2013 in Ordinance No. 2013-036, the City Council designated
Reinvestment Zone No. 2013-1 for residential tax abatements; and
WHEREAS, concurrent with Ordinance No. 2013-036, the City Council also approved
Resolution No. 2013-036 electing to be eligible to participate in a residential tax abatement
program and approving Guidelines and Criteria for Residential Tax Abatement Program as
required by statute; and
WHEREAS, on February 9, 2015, the City _Council passed Ordinance No. 2015-002
amending Reinvestment Zone 2013-1 for Residential Tax Abatements to expand it to include all
Council Districts in the City and designated the new reinvestment zone as Reinvestment Zone No.
2015-1; and
WHEREAS, on January 9, 2017, the City Council approved Resolution 2017-001 re-
authorizing the City to become eligible to participate in residential tax abatements and approving
guidelines and criterial for the residential tax abatement program; and
WHEREAS, on April 22, 2019, the City Council approved Resolution 2019-013 re-
authorizing the City to become eligible to participate in residential tax abatements and approving
guidelines and criterial for the residential tax abatement program; and
WHEREAS, in 2020, City Council re -authorized Reinvestment zone 2015-01 and renamed
it Reinvestment Zone No. 2020-1; and
WHEREAS, on April 12, 2021, the City Council approved Resolution 2021-012 re-
authorizing the City to become eligible to participate in residential tax abatements and approving
guidelines and criterial for the residential tax abatement program; and
WHEREAS, pursuant to Texas Tax Code Sec. 312.002(c), guidelines and criteria for tax
abatements are effective for two years from the date adopted; and
WHEREAS, the City Council desire to continue to participate in a residential tax abatement
program in the City of Paris and has now been presented with a new program to be known as the
"5 In 5 Housing In -Fill Development Program" (the "Program") with specific guidelines and
criteria for -residential tax abatements entered into pursuant to Program; and
WHEREAS, the City Council has identified a specific geographic area within the City of
Paris and within Reinvestment Zone 2020-1 in which lie properties eligibile for the Program; and
WHEREAS, the City Council wishes to offer other incentives in the Program through
Chapter 380 of the Texas Government Code; and
WHEREAS, said the City Council finds that Program and the incentives offered therein will
contribute to economic development within the Program area and the Reinvestment Zone through
the provision of much needed housing for workforce for industries and other employers within
the City; and
WHEREAS, on January 10, 2022, the City Council conducted a public hearing regarding
the Program guidelines and criteria for residential tax abatements, and having taken into account
any testimony from said public hearing, wishes to adopt the Program and the guidelines and
criteria for residential tax abatements set forth therein;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PARIS,
TEXAS, THAT:
Section 1. The findings set out in the preamble to this resolution are hereby in all things
approved.
Section 2. The City hereby adopts the "5 In 5 Housing In -Fill Development Program," a copy
of which is and attached hereto and incorporated herein as Exhibit "A," elects to be eligible to
participate in a residential tax abatement program under said Program, and adopts the Guidelines
and Criteria for residential tax abatements contained in said Exhibit "A."
Section 3. The City Council hereby designates the defined geographic area for properties to
be eligible to participate and enter into an agreement for the "5 In 5 Affordable Housing In -Fill
Program", a map of which is attached hereto and incorporated herein as Exhibit "B".
Section 4. In order to qualify for the Program, an applicant shall agree to construct at least
five (5) new residential dwelling units on one (1) or more parcels within the boundaries set out
in Exhibit "B", which area lies within Reinvestment Zone 2020-1, within five (5) years of entering
into an Economic Development Agreement and Tax Abatement Agreement with the City.
Section 5. This resolution shall become effective from and after the date of passage.
PASSED AND APPROVED this 10th day of January, 2022.
Paula Portugal, Mayor
ATTEST:
Janice Ellis, City Clerk
APPROVED AS TO FORM:
Stephanie H. Harris, City Attorney
5 IN 5 HOUSING IN -FILL DEVELOPMENT PROGRAM
GUIDELINES, CRITERIA & APPLICATION FORM
CITY OF PARIS, TEXAS
January 10, 2022
L GENERAL PURPOSE AND OBJECTIVES
The City of Paris, working with our local government partners, is seeking to provide a series of
builder incentives designed to encourage new home construction for the purpose of neighborhood
revitalization and the provision of work force housing. New home construction within the existing
interior of the community can have a positive effect towards reinvestment in our neighborhoods
by providing stability and enhanced character, as well as a means to expand our community's local
labor force. Focusing on the existing interior of the City allows the builder to utilize existing
infrastructure rather than the extension of costly streets and utilities in undeveloped lands at or
beyond the urban fringe.
To achieve this purpose, the City will offer a series of incentives:
1. Where applicable, the City will provide low cost residential lots in the Program Area in tax
foreclosure city receivership. If a builder obtains properties through other traditional means
within the Program Area, other incentives within this policy may apply.
2. The City will offer a five (5) year 100% residential tax abatement of City property taxes.
3. The City will offer reduced rates on building plan review and permit fees.
4. The City will offer reduced rates on labor charges on water and sewer tap fees.
The city staff will work with interested builders to identify parcels from a pool of tax sale lots in
trustee status to develop a list of properties that will be suitable for the construction of new
dwelling units. This may consist of single-family, two-family, medium density, or high density
residences. Prior to any construction occurring from which the builder is seeking incentives, the
builder will enter into an Agreement to be approved by the City Council for the construction of a
minimum of five (5) or more dwelling units on one (1) or more parcels. Each of the dwelling units
subject to the Agreement must be constructed under the terms of the agreement within five (5)
years from the date of the Agreement, unless such deadline is extended by subsequent approval of
the City Council. All parcels under the Agreement must be built upon within five (5) years to
satisfy the terms of the Agreement. Failure to achieve this goal will result in certain claw backs as
provided in the Agreement. All applications shall be considered on a first come, first serve basis.
There will be no income guidelines under this program for occupants of the dwelling units, whether
owner or renter occupied. In the event the applicant constructs a new dwelling unit and sells said
unit, the tax abatement shall lapse and be terminated as to that parcel unless the City Council
approves an assignment of the tax abatement agreement to the new owner.
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In order to further encourage local development, employment and enhancement of our economy,
to be eligible for incentives in this policy, building materials and fixtures used in the construction
of new dwelling units, where possible, must be purchased locally within the City of Paris.
IL DEFINITION OF TERMS
Act - The Property Redevelopment and Tax Abatement Act, Texas Tax Code Ann. 312.001 et.
seq., as amended from time to time.
Agreement - A contractual agreement between an applicant and the City of Paris for the purposes
of a 5 In 5 Housing In -Fill Development Program to include an economic development agreement
pursuant to Chapter 380 of the Texas Local Government Code and a residential tax abatement
agreement pursuant to the Act.
Applicant - An owner, proposed owner, builder or authorized agent of the owner of eligible
property seeking an agreement under this policy.
Base Year Value — The assessed value of eligible property on January 1, preceding the date of
execution.
Eligible Property - Property located in the defined Program Area, whether foreclosed on due to
taxes or not. Also, property located outside the Program Area if foreclosed on due to taxes.
New Structure - Residential improvements made to a property previously undeveloped or a vacant
parcel which is placed into use by means other than by expansion or modernization without full
demolition of an existing substandard or condemned structure.
Program Area - An area depicted in "Exhibit B" of the approved resolution for the 5 In 5 Housing
In -Fill Development Program, which area is wholly within the boundaries of Reinvestment Zone
2020-1 for the purpose of residential tax abatements.
Residential Improvements - The construction of new residential structures and all the
appurtenances thereto. This term includes single family, duplexes and multi -family structures.
Value of Improvements — The appraised value of the Residential Improvements as determined
by the Lamar County Appraisal District and as described in the Agreement.
III. ELIGIBILITY AND GUIDELINES
Real property is determined eligible under this policy as provided in the Definitions. If property
is eligible, an Applicant may apply for an Agreement to receive incentives provided for in this
policy. For tax foreclosed properties, all taxing jurisdictions shall be required to sign off on the
low cost land sale according to the provisions of State Law prior to transfer of the property to the
applicant.
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Minimum Investment — To be eligible for residential tax abatement, an Applicant must construct
a new structure or structures on the property parcel(s) identified in an Agreement between the
applicant and the City.
Incentives
Low Cost Sale of Foreclosed Properties — As part of their agreement, an applicant may choose to
purchase eligible properties that are in a state of tax foreclosure. These properties are strictly first
come, first serve and the City makes no warranty on having available properties for this incentive.
The City will work with the Lamar County, Paris Independent School District, and Paris Junior
College to seek a low cost sale of the foreclosed property, but the City can only guarantee a low
cost of its share.
Tax Abatement - An Applicant who has satisfied all the criteria and guidelines for the low cost
property sale and residential tax abatement as set out herein, will be eligible for a 100% five (5)
year tax abatement on each parcel on which a dwelling unit or units are constructed and completed.
The abatement will become effective on January I" of the year following issuance of a Certificate
of Completion following final construction inspection. As provided in the Act, a tax abatement
may only be granted for the value of the Residential Improvements which exceed the base year
value of the property and which are listed in an Agreement between the City of Paris and the
applicant, subject to such limitations as the City of Paris may require. The base value will be set
as of January 1st of the year in which the Agreement is executed. Upon completion of construction,
the Applicant shall provide a copy of all material and fixture purchase invoices to prove that those
materials and fixtures were purchased locally within the City of Paris when possible. The tax
abatement is available only for improvements made after the execution of the Agreement.
The Agreement may not be approved by the City Council until at least thirty (30) days after
notice of the consideration and possible action on the Agreement has been posted.
Reduced Fees for Building Plan Review and Permitting —The Applicant will be entitled to reduced
rates for building plan review and permit fees on a cumulative basis for all new dwelling units
under agreement with the City according to the following schedule:
Total Dwelling Units Plan Review Fee Discount Building Permit Fee Discount
5-9 100% 50%
10-19 100% 75%
20+ 100% 100%
Reduced Fees for Water & Sewer Tap Labor — The Applicant will be entitled to reduced rates for
water and sewer tap labor fees, where required by the Public Works Department, on a cumulative
basis for all new dwelling units under agreement with the City according to the following schedule:
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Total Dwelling Units Water Tap Labor Fees Discount Sewer Tap Labor Fees
Discount
5-9 50%
10-19 75%
20+ 100%
50%
75%
100%
Claw Back Provision — The Applicant who enters into an Agreement with the City of Paris shall
construct at least five (5) or more new housing dwelling units on one (1) or more parcels within
five (5) years from the effective date of the Agreement, or the City shall have the right to
automatically take back any undeveloped parcel under the terms of the agreement and transfer of
the property by all taxing entities. This shall be recorded with or as a part of the deed as a right of
reversion for all uncompleted construction lots deeded under this agreement against the property.
The Applicant may request approval of an extension for such failure to construct a new residential
dwelling unit(s), based upon reasonable circumstances, as may be approved by the City Council
under a subsequent revised agreement. Parcels under the agreement cannot be sold or assigned to
another individual except by prior approval and re -assignment of the parcel(s) and approval of a
new agreement by the City Council. Failure to meet the requirements of construction the minimum
of five (5) dwellings within the five (5) year period will result in a reversion of the all parcels
upon which Residential Improvements have not been constructed and completed to the City and
will result in the Applicant's being ineligible to participate in this program in the future.
As a further claw back provision, and in accordance with Texas Tax Code Sec. 312.205, the
Agreement shall provide for recapturing property tax revenue lost as a result of the agreement if
the owner of the property fails to make all the Residential Improvements as provided in the
Agreement regardless of how many dwelling units applicant builds.
Compliance with all other City Requirements — The Applicant shall be fully responsible for
compliance with all zoning, subdivision platting, and building code requirements as may
specifically pertain to the subject parcel(s) under the approved Agreement. The applicant shall be
fully responsible for all such costs which may include, but not be limited to: Zoning Changes,
Special Use Permits, Variances, Platting and Surveying Costs, Plan Preparation, and Building
Permit Fees.
V. APPLICATION PROCEDURES
Applications for an Agreement with the City shall be reviewed for completeness. City Staff shall
determine whether the application satisfies guidelines and criteria and Staff may request
additional information or documents from Applicant. City Staff will make final
recommendations on each application to the City Council. Any Applicant desiring
approval of an Agreement shall comply
4. If an application for the 5 In 5 Housing In -Fill Development Agreement is to be
recommended for approval by staff, then an Agreement as defined herein with the City of
Paris as prepared by the City Attorney for approval by the City Council.
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5. If the Applicant's property is not found to be eligible, the application will be rejected and
returned to Applicant.
6. The City Council reserves the right to amend these policies and guidelines as needed.
VL LEGAL DOCUMENTATION PREPARATION
The Director of Planning and Community Development and the City Attorney will be responsible
for drafting the required Agreement in accordance with state law and this Policy.
The legal document will include the following:
Estimated value of new structure or residential improvements to be constructed.
2. Total amount of value to be abated over five (5) years.
3. Effective date and the termination date of abatement.
4. Description of the Residential Improvements, schedule of completion, property
description, all required City approval requirements and a platted lot site plan or sketch of
the parcel(s) to be platted and developed.
5. Applicant agrees to make the new structure or residential improvements available for
inspection by City of Paris, or its authorized representatives, and Lamar County Appraisal
District (LOAD) during construction and upon completion of the project.
6. Contractual obligations in the event of default, violation of terms or conditions, delinquent
taxes, recapture and administration.
7. A signed and notarized statement as an attachment to the application agreeing to construct
five (5) dwelling units on one (1) or more parcels within five (5) years from the date of
City Council approval of an Agreement, unless extended by the City Council, or consenting
to allow the City to automatically take back the parcel(s) under the initial terms of an
approved agreement.
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CITY OF PARIS, TEXAS
APPLICATION FOR RESIDENTIAL TAX ABATEMENT
Property Owner:
Name Current: Name Planned:
Mailing Address:
Telephone Number: email:
Builder or Contact (if different than current/planned owner):
Name:
Mailing Address: State GC License No:
Telephone Number: email
Property Parcel(s) For Low Cost Land Sale and Tax Abatement:
(Please submit an attached list of addresses and/or LCAD #'s on Excel Spreadsheet, if possible)
Street Addresses:
LCAD #'s
Summary Legal Description Lot: Block: Addition:
Full Legal Description: Include as an attachment a full legal description with metes and bounds
and a copy of the deed, if available.
Improvements:
Type improvements for new Construction: SF 2F—MF— No. of Dwelling Units:
Estimated Value of Improvements by type:
Estimated Start Date of Construction:
Estimated Date of Completion of Project(s)
Description of Project (attach site plan, floor plan, etc.:
Applicant(s) Signature: Date:
Date:
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