CHIP: Benefit or burden?
This letter is in regards to the redevelopment of the Colby Block as the Denison Project in Fairlee.
As a longtime elected member of the Budget Committee and the Board of Listers, I have some concerns about the CHIP program outlined in the opinion piece from the developers in the 10/28 edition of the Valley News. I stress that these are my opinions and not necessarily the consensus of the respective boards, although my experience gives me some perspective regarding the effects of development on the budget and grand list of the town.
The CHIP Program provides loans to develop infrastructure for housing development. The town assesses the new construction and establishes a value which is used to calculate the tax bill. The developer has projected that the taxes on the property will be around $79,000 per year, although I have not seen how this figure was arrived at. The owners will pay the equivalent of the value established by the town times the tax rate. However, for 20 years the town will only receive the taxes on the undeveloped lot (currently around $600 for municipal and $1,300 for education taxes per year). The rest will be used to pay back the loan.
The equivalent scenario for a private party would be buying a lot for say $35,000 and building a $400,000 house. With taxes assessed on $435,000 and 15% of the money going to the municipal and education taxes and 85% going to the bank to pay down the principal on the mortgage for 20 years.
The problem is that for the term of the payback the additional costs for town services to the development project are carried by the rest of the taxpayers.
We all know the need for housing. One of the biggest expenses that makes housing unaffordable is property taxes. From speaking with constituents, I have heard that folks who probably don’t struggle to pay their property taxes are all for this program. Those who do struggle, not so much. It seems irresponsible to add more cost to the current property owners during this time of rapid inflation.
We have another developer in town who has renovated several properties, many of which were uninhabitable, providing much-needed housing and adding a substantial amount of value to the grand list without burdening and in fact benefiting the rest of the taxpayers.