The Truesdale Board of Aldermen has agreed to a home builder’s proposal to place a special tax on 190 future homes in order to subsidize $3 million from the cost of their neighborhood’s …
The Truesdale Board of Aldermen has agreed to a home builder’s proposal to place a special tax on 190 future homes in order to subsidize $3 million from the cost of their neighborhood’s construction.
Developer T.R. Hughes Homes asked Truesdale to approve the special tax in order to help the company build a new subdivision on 40 acres of land along Veterans Memorial Parkway, just west of Faith Christian Family Church. The special tax will help pay for nearly everything other than the construction of individual homes; site clearing, grading, road paving, and utility installation could all receive funding from the $3 million T.R. Hughes is requesting.
Aldermen voted on Jan. 11 to agree to that request and create a special taxing zone called a “neighborhood improvement district” to help pay for the improvements. Here’s how that will work:
1) A lender (typically a bank or finance agency) issues a loan that helps pay for the neighborhood’s construction.
2) An extra property tax is collected on all properties within the improvement area — in this case, the T.R. Hughes subdivision. No one outside of that set area is charged the extra tax.
3) A board of directors is established to oversee the special tax funds and repay the loan for the public improvements.
4) The extra tax levy expires after 20 years, or sooner if the loan is paid off ahead of time.
Since there aren’t currently any homes within the area of the neighborhood improvement district, the only people impacted will be the people who move into the future homes that T.R. Hughes is planning to build. The extra tax would be part of the information that potential buyers are informed of before purchasing a home.
For the developer, the advantage of a neighborhood improvement district is that it reduces the up-front cost of building the new homes. That cost is instead deferred to the homeowners and spread out over a 20-year period.
The Truesdale Board of Aldermen still has several more steps it needs to carry out in order to put the neighborhood improvement district in place, but this week's agreement with T.R. Hughes was the most substantial step in the process.
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