The city of Hot Springs is moving forward on plans to create more workforce housing in the city.
Hot Springs' housing market is stratified, having many low value housing properties and many high value properties, with not much in between. This median priced housing shortage makes recruiting working professionals to the city challenging, as they find it difficult or impossible to find a home within their budgetary means.
There are two major contributing factors to Hot Springs' housing issue. First, Hot Springs is a desirable place to live. It is the "banana belt of the banana belt." With the Southern Hill's, generally, temperate climate and quick access to all the Black Hills has to offer, property values tend to be higher.
The second major factor is Hot Springs' geographic isolation. There aren't many building materials produced close by. This means contractors must ship material to Hot Springs.
The combination of high property values and high overhead for materials tends to discourage builders from pursuing median value homes, as the profit margin isn't enough to justify the investment.
The city of Hot Springs is working on a number of resolutions to encourage the building of more median income homes.
The old water fill station on Canton Avenue and the armory located east of Butler Park are both sites the city is looking into developing.
Both properties are owned by the city. The vacant lot north of the armory is privately owned, but the city is looking into acquiring it.
In order to make it financially reasonable for contractors to build median income homes on the properties, the city is planning on opening home construction proposals. The proposals will be for single family homes or duplexes. Whatever company is awarded the bid will be able to buy the property at a negotiated discount, hopefully mitigating some of the overhead associated with constructing median value homes.
Depending on whether or not the city acquires the lot north of the armory, and what kind of homes are built, the property could yield as many as seven new homes.
The water fill station property was already subdivided into four lots a few years ago. These lots could produce four to eight new homes.
Currently, these lots generate no tax revenue for the city. As they are bought, developed and sold, the city should see an increase in its tax base.
Another project the city is working on is implementing a tax rebate for improvements to residential structures.
"We have an older housing stock that needs to be updated," said Kim Barbieri, Hot Springs city administrator.
The rebate has yet to be adopted as an official city ordinance. Under the proposal, property owners would be able to apply to a five year tax rebate on improvements to their residential properties after a project was completed.
The rebate would be the difference between the property's assessed value prior to renovation and the new assessed value of the property. Owners would still be taxed on the original value of their property until the end of the five year period.
The program will function as an incentive to improve existing properties by alleviating some of the immediate overhead associated with remodeling.
Also, the rebate would stay with the property for five years, regardless of owner. If a person were to make qualifying improvements to their structure and sell it, the new owners would retain the remaining years on the rebate.
The city is also working toward an updated vacant structure registry. Completing the registry will be an valuable resource for first responders, who need to know what kind of building they are responding to for safety reasons.
As a consequence of the registry, many owners of vacant structures opted to sell their properties, opening more available homes to potential Hot Springs residents.
Between the registry, tax rebate and development on city property, the city of Hot Springs is working hard to remedy the lack of median value homes in the community.
Making these homes more available could potentially make it easier to recruit and retain working professionals to the area, as they are currently finding it challenging to find a place to live.