ROCHELLE — Local taxing bodies have had recent conversations about a potential incentive program to help with a shortage of homes in the area, Rochelle Mayor John Bearrows said April 17.

The taxing bodies include the City of Rochelle, the Rochelle Elementary School District, Rochelle Township High School District, the Flagg-Rochelle Community Park District, the Flagg-Rochelle Public Library District, Flagg Township and Kishwaukee College. Bearrows said two meetings have been held thus far on the concept and a third is planned to clarify the mechanics of the potential program, who is qualified for it and how it will be handled internally by the taxing bodies.

The potential program would be a five-year plan and 20 percent of tax rebate each year for new construction. There would also be incentive for buyers of existing homes in Rochelle, such as a freeze in property tax rates for five years. Incentives could also include discounted use of local amenities like Fairways Golf Course and The REC Center, which are owned by taxing bodies, for participants. 

Bearrows said he feels strongly about the home shortage in the area and wants to incentivize home builders and purchasers to do those things in Rochelle.

“We should create some type of incentive to make them want to live here versus any other town in the area,” Bearrows said. “Our job is to be good stewards of the community, not just the tax money. We have to lay out a roadmap of how we can promote growth and development on the residential side, which will ultimately positively impact our schools, tax base, and equalized assessed value (EAV).” 

The plan will be made public once it is finalized, Bearrows said. He’d like to see the program ready to come before the taxing bodies’ boards within 60 days. The concept has been discussed for “well over two years,” he said. 

Bearrows said each of the taxing bodies have been supportive of the thought process and proposal. 

“For all of our taxing bodies, no one would ever take in less revenue than they are earning today,” Bearrows said. “If you are talking about new construction, the farmland that could be developed or areas that could be buildable, they're receiving a base tax rate today. This program would never take any tax money away. What I prefer to think of is, this is a way that we as good stewards and elected officials can make a commitment to the longevity, growth and promotion of our local community. As we bring more residents in, our EAV goes up and hopefully our tax rate can go down. We want to bring new people in and do it in a way that's a benefit to existing residents.”

Bearrows said the closure of May Elementary School in recent years due to declining enrollment numbers was “very discouraging” from his perspective and is one of the reasons he’d like to see the home incentive program move forward.

“That's not the sign of a community that's growing,” Bearrows said. “We need to do something that's proactive to make our community grow and we can reopen that school and get the numbers up for our school districts and with new construction have our young people stay here. Currently, there's no housing to allow for that. It's very limited. My hope is this program will help correct that problem.”

If it goes forward, Bearrows expects the housing incentive program to start with a small portion of lots and developments, due to conversations he’s had with developers. That wouldn’t make for a large burden on taxing bodies when they cut checks back to homeowners or the buyers of a new home for their portion of property taxes.

From Jan. 1, 2023 to about a month ago, the city saw two building permits for residential. Bearrows said his hope once the program and “several other ancillary programs” are put into place. that there would be around 12 new homes per year.

“If 50 percent of those are local folks that build a new house because of the incentives, that opens up existing homes for new owners,” Bearrows said. “Let's say a home has an established value and someone's been there a long time and the tax bill is $3,500 a year, when that home sells, maybe the tax bill based on current rates could become $5,500 a year. Instead of having that rate go up, we could potentially freeze that rate for a five-year period for the existing home. There's an incentive for someone to build a new house, and also an incentive for someone to move here and buy an existing home from another area. They'll have a huge benefit for five years. It gives us something to offer that no other community is offering. In today's world, it's all about incentivizing. That's the mindset we have to have and we have to market our community as a great place to live. It is, but we have to give a little extra.”

When asked about potential areas in town that could lend themselves well to new homes, Bearrows mentioned land north and west of 20th Street, on Veterans Parkway, and in the Lake Lida area.

The city works to incentivize employers to bring their businesses to Rochelle, and Bearrows said he wants to make sure having available housing for those businesses’ employees goes hand in hand with that to bring their spending and families to town as well to help with sales tax and school enrollment numbers.

City Manager Jeff Fiegenschuh stressed an importance of a multi-pronged approach to housing and focusing on apartment and multi-family housing, along with single-family. 

“It's an issue nationwide,” Fiegenschuh said. “Locally, one of the things we can do to try to offset the increase in interest rates and housing costs is to provide a rebate on taxes. And nobody is losing anything. If there's a piece of vacant ground and someone comes in and builds a $350,000 house on that, why not rebate those taxes back? Because you're not losing anything. You're getting nothing now. But after that five years, then you get that full tax benefit and you have another person living and shopping in your community.”