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Commissioners review RHID policy as developers pursue housing incentives outside NRP district
Summary
Staff briefed the Ottawa City Commission on the Rural/Reinvestment Housing Incentive District (RHID) program, recent statute changes allowing vertical construction after 10 years of existing infrastructure, and the city’s gap-analysis process; staff sought direction on incentive levels ahead of pending applications.
City staff provided a detailed briefing Sept. 25 on the Rural (Reinvestment) Housing Incentive District program and asked commissioners for guidance ahead of one or more pending RHID applications.
Melanie (staff) summarized the program’s mechanics: RHID provides reimbursement of allowable developer expenses on a pay-as-you-go basis, typically requires a minimum of 10 renter-occupied units, and historically focused on infrastructure and land acquisition. She emphasized recent statutory changes allowing RHID funds to be used for vertical construction when public infrastructure has existed more than 10 years and noted that the city’s policy needs updating to reflect that change.
Bond counsel Tyler Ellsworth, participating virtually, said a single housing-needs assessment can designate an entire downtown as eligible, but development plans and terms can be carved parcel-by-parcel so each building may have its own reimbursement term. Staff explained the city’s ‘but-for’ or gap analysis to determine actual need versus requested incentives and showed historical per-unit incentives (city contributions and pairing with state programs such as LIHTC).
Commissioners asked whether incentives should mirror the NRP framework and debated terms (for example, whether to limit reimbursement years to 10–15 instead of 25). Staff said developers are approaching the city requesting RHID incentives because rising construction costs and interest rates make some projects financially marginal without assistance. Commissioners asked staff to proceed with gap analyses for pending applications and to return with concrete incentive options that consider infrastructure life-cycle costs.
