DeKALB – DeKalb aldermen want more information before they decide to buy private homes and convert them at a financial loss.
That’s the central policy question the DeKalb City Council needs to decide under a proposal that would have the city use tax increment financing to buy multifamily houses and convert them into single-family homes in the Ellwood Historic Neighborhood, which is northwest of downtown DeKalb.
“Is that loss worth the benefit of reducing density in the neighborhood?” City Manager Mark Biernacki said.
No vote was taken at Monday night’s meeting. City staff will present more information about the pilot conversion program during the council’s Committee of the Whole.
DeKalb aldermen voiced positive sentiments about the program. Alderman Dave Baker, of the 6th Ward, said he would vote for the program.
“I think there would be a tipping point eventually where that would be the most valuable spot in the neighborhood,” Baker said.
Officials believe the city will lose $45,000 per house conversion. They are estimating buying a house at $150,000 and renovating it at $75,000, then reselling it at $180,000.
Biernacki said the program would be voluntary, and there would be legislation to ensure that the house could not be converted back into a multifamily unit. The program would start with one willing property owner.
“We have worked with a local realtor and contractor to identify a willing seller of a multiunit house in the neighborhood,” said David Castro, a member of the Ellwood House Neighborhood Group, a group of residents who have worked with the city in the past to restore the area.
However, neither Biernacki or Castro knew how many multifamily houses this program could apply to in the Ellwood Historic Neighborhood.
As the 5th Ward alderman, Ron Naylor represents residents of the Ellwood Historic Neighborhood. Although he indicated his support for the program, he wants more information, including information about the viability of converting some of these houses.
“How much more life is really left in some of those houses?” Naylor said.
David Jacobson, 1st Ward alderman who has been a vocal critic of how TIF funds are used, expressed some skepticism about the program. Jacobson wanted to see private developers take the initiative with this program, and was worried about the city getting involved in property speculation.
“I think it would be a great opportunity for a lot of developers and home builders to get involved and step up,” Jacobson said.