ROCHELLE — At its Sept. 23 meeting, the Rochelle City Council unanimously approved an ordinance authorizing the creation of a housing incentive program to encourage future housing growth.

Mayor John Bearrows has been in discussions with Ogle County, the Flagg-Rochelle Library District, the Flagg-Rochelle Community Park District and Flagg Township about participating in the program as well. 

The program will be a five-year 100-percent city portion-only property tax rebate for newly-built single-family homes and newly-built residential townhomes. The program will be capped at 15 homes per year. Property must be owner-occupied and not used as a rental property.

The program will involve rebate and reimbursement and applicants are required to pay their full tax bill each year. Owners will be required to bring proof of tax payment by Oct. 1 to the city manager’s office. All rebates will be issued no later than Nov. 15 of each year.

The program will begin Jan. 1, 2025, and run for the next five years until possible renewal for more years. The program has $45,000 budgeted for it for 2026.

The city has made efforts in the past to encourage new housing, including not charging permit fees or utility tap on fees since 2018.

“It felt good to get that program into place,” City Manager Jeff Fiegenschuh said Oct. 16. “The housing shortage is an issue facing the entire country. Mayor Bearrows really spearheaded this and worked very closely with the other taxing districts. We're going to move forward with what we can do and I think it's great. We need to try to find people who are willing to develop and build more housing. A housing incentive is great, but if you don't have anybody who's willing to build houses or take that risk, then it's all for nought. People build houses to turn a profit. We have to have people who are willing to take that risk. I'm very proud of our incentive program and I hope we're able to see more home construction in the next couple of years.”

Fiegenschuh said he’s spoken with stakeholders in Rochelle’s industrial community that have concerns about the lack of housing availability locally for their workers. The city wants to use pathways like the incentive program and waiving of fees for new homes to attempt to overcome economic factors out of its control, such as mortgage rates and the cost of building materials.  

“There's so much tied into the lot before you even build a house that it becomes hard to turn a profit,” Fiegenschuh said. “You have to have affordability. You have to have good-paying jobs in the community so people can afford to live here and have housing. And we have to have a mix of housing like the current workforce housing development on Willis Avenue, which is based on income.”

The city manager said the next step in encouraging more housing is talking to housing developers about what they need and why they aren’t building in Rochelle. Housing growth plays into other aspects of the city’s work such as economic development and infrastructure improvements. 

“I think there's a lot of factors that go into people's decisions on whether they're going to move to a community besides whether they want to buy a new house,” Fiegenschuh said. “If there are little things that we can do, like if they're already considering Rochelle and maybe there's an extra $2,000 that will come back to them in the form of property tax rebate, we should try to do it. If the housing isn't there now, we're not getting any tax revenue. The mayor and council is willing to put off receiving tax revenue for five years because zero percent of zero is zero. There's no reason why we shouldn't be willing to put some of those tax revenues off if it assists people to build or purchase a home.”

Population growth benefits the city because its state-stared revenues are based on a per-capita basis. The more people living in a city means more revenue. 

“A growing residential base shows an underlying positive economic impact in your community,” Fiegenschuh said. “If you have more housing, it means there's more affordability and that people are moving there and the schools will have more enrollment. The more people that live in your community the greater long-term economic benefit there is. There are more people shopping and buying gas. Everybody benefits. We're excited about this program. The mayor and I are looking forward to trying to get a few more partners on the program and seeing what we can do.”