May 27, 2011; Source: Watertown Daily Times | In many instances, municipal plans for payments in lieu of taxes are strategies to lure socially and politically important investments. In Upstate New York, the return of military units from overseas deployments will put pressure on the local housing stock. Over the next two years, Jefferson County expects a need for 1,035 housing units.
The County as well as its Industrial Development Agency have set aside $2 million in gap financing for developers. The Development Authority of the North Country is targeting $3 million as subsidy funds. Local authorities are looking to devote $10 million in county and state funds to be able to subsidize the new apartments at around $10,000 per unit. The likely developers, to be recruited by RFP, based on past practice, will ask for reductions in the property taxes they will pay.
Typically, in this area, apparently, affordable housing developers get a three-year PILOT deal, but Dawn Homes of Albany, which has developed apartments in this region before, may ask for a 10-year PILOT deal. Readers should know that local counties typically cut deals with private developers offering tax abatements – agreements for payments in lieu of taxes – for both housing and business ventures. The developers do not have to be nonprofit at all, and the beneficiaries in many cases are hardly the low- or moderate-income households that will be the primary beneficiaries of the Fort Drum population.
The Watertown Daily Times suggests that there may be concerns about offering the developers tax abatements, perhaps because in the current political environment, property taxes and PILOTs are a flash point. Hopefully, this flash point won’t develop to a point where the families of Fort Drum soldiers lose out on affordable housing opportunities –and hopefully the Jefferson County and North Country authorities will remember to recruit nonprofit as well as for-profit developers.—Rick Cohen