Shot In the Arm Housing Incentive
Shot In the Arm Housing Incentive
Shot in the Arm - Phase Three has begun!
Workforce housing development continues to dominate the discussion in economic and community development circles throughout Nebraska and in most of rural America.
North Platte Chamber and Development leaders a few years ago began brainstorming about the issue and why the community was lagging behind its peer communities in building new houses. Speculative housing (not custom pre-sold) was almost non-existent. There were numerous reasons that were identified as part of the housing problem. This led to the creation of the “Shot in the Arm” housing incentive program.
The “Shot in the Arm” housing incentive program has impacted an impressive list of over 80 local businesses while creating new homes for the community.
That impact has been just through the construction stage of the program. Once houses are sold, then another level of local businesses are impacted by the furnishings, amenities and services that are purchased. Those additional impacts are not factored into the business list provided being impacted by the program, making the local business impact even more meaningful. The residual economic spillover from the program into the community has also been welcomed by the business community. It also doesn’t include the local economic impact those additional families buying the homes will have long term in the North Platte / Lincoln County region.
Most state or federal housing programs of the past enticed developers by offering grant funding and tax credits for the construction of “low income” and “low and moderate income” restricted housing. Only the speculative market (not pre-sold custom homes) was dealing with market rate work force housing needs and it was getting increasingly more challenging for developers to make the numbers work to match up with a home purchasers ability to pay.
“Shot in the Arm” brought North Platte a lot of positive publicity throughout Nebraska and local Chamber leaders have been asked to do numerous local, regional and state presentations on how the program works. North Platte has been lauded for its innovative and creative way to tackle the problem by providing an incentive directly to the developer for each housing unit built.
“Shot in the Arm” – Phase 1 – ran from 2015-2017. There were 48 new homes constructed and all have been sold, creating an estimated $11 million in new valuation, approximately $125,000 in retail sales from purchases of materials, generates $240,000 in annual property taxes and brought over 100 new residents into the community either through direct sales, or step up sales that opened up older housing for other residents. The original incentive investment was $350,000 – half from Chamber Devco and half from the City of North Platte’s Quality Growth Fund.
Phase 2 launched in 2018 with commitments of $1,183,400 in incentives pledged by the State of Nebraska’s Rural Workforce Housing Fund, Union Pacific Foundation, Great Plains Health, City of North Platte’s Quality Growth Funds and Chamber Devco incentive partners. There were initially 118 housing units committed in the program.
Program guidelines require houses to be 1,400 square feet minimum with two car garage. Incentive is $12,000 for single family; $6,000 per unit for multi-family built to city standards. Each developer had to commit to at least two and no “pre-sold” are allowed.
Even with much of 2018 dedicated to getting construction plans and developments in place, still 9 new houses were constructed by five different developers, creating another $2.5 million in new valuation. Anticipated additional valuation being created by Phase 2 is expected to exceed $25 million. That does not include several other housing projects being proposed that were attracted to North Platte because of the statewide publicity of the program.
Chamber Devco have approved 79 single family houses with 39 multi-family units for a total approval of 118. Those units have to be constructed by 2020/2021 to receive the incentive. By Fall of 2020, several contracts were adjusted and 28 single family homes, and 141 multi family units were approved. There are over 300 additional housing units proposed on the pending project list that have been in contact with Chamber Development officials. Total participants of “Shot in Arm 1 & 2” include nine different developers and six others are on the waiting list. The majority on the waiting list are multi-unit developments primarily targeting the rental market.
Chamber Devco officials contacted each of the developers in Shot in the Arm - Phase 1 and the 9 houses constructed thus far in Shot in the Arm – Phase 2 to find out which local businesses were involved in their projects. Thus far 81 have been identified and it’s very likely some may have been overlooked. That list is likely to grow considerably once Phase 2 is completed. A list of those local businesses and entities impacted are included here.
The program has helped North Platte play catch up on the housing market as its construction has lagged behind peer communities such as Hastings, Kearney, Columbus, Norfolk and Fremont. This decade North Platte has averaged 35 new housing units per year. In previous decades those numbers were: (52 per year) – 2000-2009; (79 per year) – 1990’s; (64 per year) – 1980’s; (284 per year) – 1970’s; (158 per year) – 1960’s; (134 per year) 1950’s; (115 per year) – 1940’s.
The recently completed 2018 North Platte / Lincoln County Housing study documented the various housing needs and demands both in new units estimated at an immediate need of 523 additional to have a healthy housing market, and the rehabilitation of older and substandard housing being another critical point of emphasis. Approximately 75 percent of North Platte’s housing stock is a half century or older. That aging housing structure percentage is even greater in the villages of Lincoln County.
On April 15, 2021 Governor Pete Ricketts and the Nebraska Department of Economic Development announced that North Platte received $500,000 of the 2020 round of Rural Workforce Housing Funds. Paired with the local matching funds of $550,000 the Shot in the Arm Application Review Team began working on the revised application to meet state guidelines with a total of $1,050,000 to award to North Platte housing developments.
“Shot in the Arm – Phase 3” housing development guidelines:
- A developer must commit to constructing at least two new housing units (4 was the requirement in Phase 1, and 2 homes in Phase 2). The homes cannot be owner occupied and cannot have already been permitted.
- The housing units must be reasonably ready for occupancy by the summer of 2023.
- Only North Platte city jurisdiction is eligible to participate in Phase 3.
- For sale or for lease (rent) are both eligible.
- The homes must sell for less than $275,000. Multi-unit apartments cannot cost more than $200,000 per unit to construct. Housing structures must be a minimum of 1,400 square feet with two car garage.
- Single family houses can qualify for $12,000 in incentives.
- Townhomes (duplexes) can qualify for $12,000 per side.
- Upper-floor Downtown living quarters can qualify for $15,000 per living unit.
- Multi-unit structures (over 2 units) can qualify for “up to” $6,000 per living unit.
- Modular Homes (as defined by the State) can qualify for $6,000 per unit upon certificate of occupancy.
- Incentives are dispersed at the drywall stage of the project for single family and duplexes and at certificate of occupancy from multi-family and modular homes.
- Experienced developers must have proof of credit from a reputable financial institution and references. Final decision of eligibility lies with the Chamber Development Application Review Team and Board of Directors. Individual housing projects must be approved in advance and enter into an agreement with our organization.
- Any of the state funds not used within two years from the date of release of funds must be returned to the State.
Only North Platte city jurisdiction is eligible in Phase 3 Shot in the Arm.
LOCAL - $550,000 – North Platte Area Chamber business members and incentive investment partners.
STATE -$500,000 – State Grant Application matching request – Nebraska Rural Workforce Housing Fund. Applications were due December 2020. Grant awards announced April 15, 2021. Program launched in May 2021.
Housing Application Deadline due from contractors extended to June 8th, 2021.