By Kevin Haas
Rock River Current
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ROCKFORD — City Council members have approved a three-year property tax rebate program that’s intended to spur more homebuilding in the city.
Aldermen voted 13-0 Tuesday to approve the program, which provides the tax break on single family, townhome, two-family, three-family or multifamily structures built before the end of 2024. Such construction projects would also have building permit, building inspection, building plan review and water connection fees waived.
Mayor Tom McNamara said during the council meeting that if the city adds more homes it will lower the tax burden for all property tax payers long term. He said the city needs to focus on both spurring new building here and cleaning up existing blight.
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The proposed rebate is also being presented to Rockford Public Schools, the Rockford Park District and Winnebago County, which combine with the city to make up approximately 85% of a city of Rockford taxpayer’s bill.
The vote passed after much of the discussion centered around a proposal to require that structures with three or more units be built as condos to be eligible for the tax break.
Alderman Mark Bonne, who proposed that change, said the goal was to prevent the incentive from applying to large complexes that could become problem properties years down the road.
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“Building them new, I think it’s more often than not that they’re going to end up in a state of decline and become developments that we will regret three or four (decades) down the road,” he said.
Bonne’s proposal was ultimately defeated with 10 aldermen voting against. Alderman Frank Beach and Alderwoman Janessa Wilkins joined Bonne in voting in favor.
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The city had a similar tax rebate program in 2016 that offered a three-year break for buyers of foreclosed, short-sale or newly built homes. That incentive has since expired.
The high cost of materials and labor have led to a stagnant homebuilding industry in Rockford and across the country, and Realtors say the lack of homes on the market have driven up prices and made it difficult for first-time buyers to find a property they can afford.
Local developers and homebuilders say the rebate will help make construction more affordable, but even with the tax breaks and fee waivers it is still a difficult economic proposition.
Before the housing crisis started in 2007, city officials said they would regularly see about 225 single-family homes built. There were just 17 built last year, along with six two-family homes.
This article is by Kevin Haas. Email him at khaas@rockrivercurrent.com or follow him on X at @KevinMHaas or Instagram @thekevinhaas and Threads @thekevinhaas