RHID is a program designed to aid developers in building housing within rural communities by assisting in the financing of public improvements. RHID captures the incremental increase in real property taxes created by a housing development project for up to 25 years.
In order to take advantage of the incentive, property must be within a redevelopment district. Districts are defined by the City or County and must be based on the Housing Needs Analysis.
RHID is authorized for any city in Kansas with a population less than 60,000 in a county with a population of less than 80,000 or for any county with a population of less than 40,000.
The City/County HNA must demonstrate the following:
Once the HNA is completed the City/County takes action to adopt a Resolution making certain findings regarding establishment of the RHID and providing the legal description of the property to be contained within the District. After publishing the Resolution, a copy of the Resolution and the HNA are sent to the Secretary of Commerce requesting agreement with the findings in the HNA. If the Secretary agrees with the findings, the City/County may proceed with the establishment of the District and adopt a plan for the redevelopment or development of the housing project in the District.
The City/County must adopt redevelopment plan, including:
Rural Housing Incentive District Act is intended to encourage the development and renovation of housing in rural Cities and Counties by authorizing Cities and Counties to finance certain public improvements to support housing in rural areas of the state experiencing a shortage of housing. The Act focuses on the economic and business benefits of providing additional housing options.
The Act is publicized at K.S.A. 12-5241 et seq and provides a financing tool for Cities and Counties to address housing shortages within their communities. RHID may be utilized by any City or County with fewer than 60,000 residents.
The ACT allows Cities and Counties to address specific types of housing needs e.g. multi-family or single family, in variety of price ranges. The process involves using the property tax increase created by the new housing project to pay for or reimburse certain infrastructure costs. This results for a more economic incentive to defray developer costs.
The incremental increase can be used to pay debt service on bonds issued to fund the project or transferred to the developer as reimbursement for costs incurred. The property tax “baseline” is determined at the time the District is created. As the developer adds infrastructure and the housing itself, the incremental gain in property tax over the baseline may be returned to the developer as reimbursement for the infrastructure costs. If the City/County issued bonds to pay for the infrastructure, then the increment may be used for debt service. The term of such reimbursement can be up to 25 years. City/County has discretion over what percentage of the increment is paid to the developer. The increment can be used to reimburse costs for the following items: land acquisitions; site preparation; sanitary/storm sewers; drainage conduits, channels and levees; street grading and paving; street lighting fixtures, connections and facilities; gas, water, heating, and electrical services in public right of way; sidewalks; water mains and extensions and certain costs for upper level improvements in older downtown buildings.