Jul. 29—An initial round of incentives has been approved toward the cost of demolishing five rundown properties and replacing them with new houses as part of Joplin's new housing revitalization program.
The program was created to address declining neighborhoods, a need identified by residents in a 2020 listening tour conducted by City Manager Nick Edwards. Results from the input resulted in City Council adoption of a strategic plan involving six goals. One of those was to address deteriorating neighborhoods.
Edwards said this first round was done as a pilot project to test how it works. "We intentionally limited the applications to five so we could see how it would go," he said. They hoped to draw applications from five builders or investors, but only two applied. Because no others applied, all of the money for the initial round was allocated to the two.
Four incentives were granted to Schuber-Mitchell and one to 13th Street Properties.
The process involves taking applications, which are available on the city's website, and scoring them based on criteria established by city employees. One of the requirements for participation is that the builder or developer must purchase a lot where there is an existing deteriorated building that will have to be torn down to build the new house.
Troy Bolander, the city's planning, development and neighborhoods director, said applications were open for any location within the city, but part of the scoring process involved awarding points based on the condition and need for a property to be removed.
Incentives are based on graduating scale tied to the selling price of the home. They are not paid out by the city until the new house is appraised, and that value determines the exact subsidy.
Locations for the demolition and construction by Schuber-Mitchell are at 1702 Annie Baxter Ave., 2424 N. Miller Ave., 2419 N. Highview Ave. and 206 Adams Ave. The location for the 13th Street Properties project is 911 S. McKinley Ave.
The city manager said the city subsidies for the five will amount to $180,000. The total value of the five new homes when completed will be more than $1.06 million.
Individually, the houses will be priced at $175,000 to $256,000.
City requirements include that the properties cannot be used as rentals for 10 years.
Asked if the housing prices fit the community need, Edwards said, "I go back to our housing study. The study said we need housing at all levels. I'm pleased to see the prices. I think it's a step forward in making sure we have desirable houses for people, and developers think they have a market at that price."
Terry Mitchell of Schuber-Mitchell Homes said that company started two years ago looking for properties in Joplin where houses could be built as the company used up its available lots and subdivision locations. Since the 2011 tornado, a shortage of lots developed and the price tripled.
"Since 2021, we have built and sold 95 homes in Joplin on infill lots," with 23 of those constructed on lots where old houses were demolished, Mitchell said.
The city's program allows the company to pass on savings to the homebuyers because of the incentives, he said.
Tyler Lipscomb, co-owner of 13th Street Properties, said the incentive allows his development company to build houses, particularly smaller ones, in locations where an investor would have lost money on the deal without the incentive.
"If I am able to go to the bank and to a builder and say 'I have this much money toward the cost,' it makes it an easier decision" to go forward with a project, Lipscomb said. It can cost $5,000 to $10,000 to tear down an old property, he said.
"There's a benefit to the city on a large scale. The city is benefiting and residents are benefiting" from removing vacant and dilapidated properties and replacing them with new houses.
Edwards said the deals are not complete yet. He said contracts will have be signed and other details completed to proceed.
The City Council in February agreed by a 6-3 majority vote to allow $1 million to be taken from the city's general fund to start the program. Most of the city's action plan programs are to be funded with proceeds from the recently passed use tax.
Because the pilot program drew applications, "I think it is encouraging that there will be some reinvestment in the neighborhoods," Edwards said. "We will be able to address the citizen concerns and work on what they wanted us to work on. It is encouraging to see some good community benefits" come from the work.
He hopes more builders and developers will be interested in future rounds of the program. He expects that applications will be taken for the next round early next year.
"I think there is a lot of growing inertia and it would be a good investment," Edwards said.