The Decorah City Council voted unanimously last week to renew the city’s residential tax abatement program.
The three-year tax abatement program, implemented in November of 2014, expires Dec. 31, 2017, but the Council reviews whether to continue it annually.
“The program was intended to increase affordable housing,” City Manager Chad Bird commented.
He said he’s aware of residents who used the abatement program to “build up,” making their former homes of lesser value available to buyers who have either been renting or living outside the community.
“Those are clear examples of what you’re trying to effect – affordable housing,” he said.
In 2016, 20 new homes totaling $7.5 million were built, up from $3.9 million in 2015, and 11 homes were improved for a total of $1.4 million, compared to $408,000 the year before. Before the tax abatement program was initiated, the city was averaging about four new homes a year.
Council member Randy Schissel commented the program has spurred development and helped rehabilitate older neighborhoods. Council member Kirk Johnson said at a recent housing meeting at Northeast Iowa Community College, the results of Decorah’s residential abatement program “raised some eyebrows.”
“It’s pretty apparent it seems to be working,” Johnson said.
The tax abatement program provides residents a five-year, 100-percent property tax abatement for new residential construction and remodeling, and commercial residential properties (apartments) anywhere within city limits.
Under the program, taxes are abated on up to $400,000 for new, single-family homes, $40,000 per unit for multi-family homes/apartments and on renovations to existing homes that increase the home’s assessed value by 10 percent.

Housing study
In a related matter, the Council approved contributing $3,234 toward a housing study proposed by Winneshiek County Development Inc. (WCDI).
“The new study may coincide well with the end of the current residential abatement program and provide the Council with additional information,” Bird told the Council.
He said the study would be more “in-depth” than a housing study conducted in 2013 and would utilize local resources through the Upper Explorerland Regional Planning Commission.
Housing countywide will be studied, WCDI Director Stephanie Fromm told the Council. The survey will look at average incomes, the percentage of income spent on housing, and the number of residents renting versus paying a mortgage, she said.
According to Fromm, the goals for the study include determining where the county and area communities sit in terms of available affordable housing, developing a needs assessment and gaining a better understanding how more people can be attracted to the area to live.