The Daily Reporter – WI Construction News & Bids Wisconsin's Construction Authority
The city of Madison will pump $300,000 over the next five years into redeveloping houses in two downtown neighborhoods.
But some city officials say the plan will benefit an area of Madison that is loaded with wealth and doesn’t need the help.
“I think it’s a pretty safe assumption we’re taking money from people of lower income in Madison and transferring it to people of higher income,” Alderman Jed Sanborn said. “I’m surprised the progressives are so fine with this, just because somebody said they want to stabilize some neighborhood, whatever that means.”
The redevelopment money will come from a tax incremental finance district, which has been expanded to include Madison’s Mansion Hill and James Madison Park neighborhoods. A TIF district allows municipalities to borrow against future property taxes to pay for redevelopment projects.
The $300,000 commitment is part of Madison’s small-cap TIF program, which uses TIF money to help homeowners convert property from rental units to single-family or owner-occupied housing. In essence, Madison is offering incentives for people to live in their own houses instead of renting them out.
Alderwoman Bridget Maniaci, an advocate for the program, said many properties in the James Madison and Mansion Hill neighborhoods have lacked “someone on site who actually gave a damn about what was going on with the property.”
The program, though, has been unsuccessful thus far. When Madison launched the program in its Bassett neighborhood in 2008, only two property owners applied for redevelopment money. But Maniaci hopes this time to better communicate the program and draw at least 20 property owners.
“I’m here with Version 2.0, trying to make it a very successful program,” Maniaci said. “My goal here is to stabilize the neighborhood housing stock and bring stakeholders in the neighborhood from out of town, or at least off-site property owners.”
There’s no limit to how many people could apply for the money, said Percy Brown, executive director of the city’s Community Development Authority. “We would like to make an impact on the neighborhood and do as many of these as we can,” he said.
But Sanborn, who is not running for re-election this spring, said people in these neighborhoods don’t need the money. For anyone who has the wealth to own property there, Sanborn said extra money would merely be a “windfall that drops in their lap because of this silly program.”
Maniaci disagreed, citing assessed property values in the neighborhoods of $200,000 and less as an indication that not every house is loaded with value.
But Alderwoman Judy Compton, a realtor, said assessed property value is a worthless indicator for houses that have only had one owner over several decades. Assessed value only changes significantly, she said, when houses sell.
“When you talk about the assessment, that is a ridiculous thing to speak to,” Compton said. “It’s not unusual in my day job to come in and see a property assessed for $200,000, but it might sell for $780,000. We have a lot of assessment districts that are dictated to us by the state.”
Acknowledging she doesn’t want to see Madison’s downtown neighborhoods overrun by rental units, Compton, who also isn’t running for re-election, said city intervention is not the solution.
“I see people who have taken beautiful single-family homes and taken them into all different directions,” she said. “It makes me sad, it makes me sick, but it is what it is. These neighborhoods are going to be brought back. But they’re going to be brought back by the market.”
Alderman Michael Verveer, whose district includes some of the areas that will benefit from the program, said the city is right to invest in these neighborhoods, even with the wealth that exists in them.
“It’s Madison’s oldest historic district, and it has some of the oldest structures in the city of Madison that will require additional resources to rehabilitate them,” Verveer said.
But Sanborn said the program’s previous failure did not warrant another try.
“We’ve taken away two rental units at a cost of $100,000 to $120,000,” Sanborn said. “This is real money. Just because we call it TIF doesn’t make it not real money.”
