Overland Park’s first foray into an economic development tool designed to encourage certain kinds of housing projects is going forward.
The policy — if ultimately adopted by the Overland Park City Council — would govern how the city utilizes the reinvestment housing incentive districts, or RHIDs, as allowed under state law.
Earlier this month, the Overland Park City Council Finance, Administration and Economic Development Committee voted 5-1 to recommend approval of a drafted policy, which includes targeted areas for the policy to be used.
Councilmember Melissa Cheatham seemed interested in such an incentive policy’s potential to help encourage reinvestment specifically in starter homes and missing middle housing options — housing that is on the middle of the spectrum in cost and size.
Councilmember Jeff Cox cast the lone dissenting vote, worried it would finance the development of a glorified “trailer park in Ward 6” or housing that resembles “Army barracks.”
Reinvestment housing districts work like TIFs
- Previously RHIDs in Kansas were expressly for rural housing, and the tool was called a Rural Housing Incentive District.
- In the last few years, Kansas lawmakers have expanded the policy to include more geographical areas and, most recently, amended it to emphasize reinvestment housing instead.
- Now, it can be used for redevelopment housing, new development or the renovation of existing housing.
- Functioning very similarly to the tax increment financing district, or TIF, a RHID sets a base year tax valuation, and all assessed tax on any increased value is returned to a developer for reimbursement of some infrastructure development costs.
- Like a TIF, an RHID is formed with a defined geographical location and a set end date.
Where could RHIDs go in Overland Park?
The draft policy that came out of the finance committee last week identifies some specific areas where RHIDs are specifically encouraged. Those include:
- Downtown Overland Park
- In a Vision Metcalf node or in the larger Metcalf corridor
- On Shawnee Mission Parkway
- In areas with approved special planning studies with development or redevelopment goals, like OP Central in the area around College Boulevard and Metcalf Avenue
- Anywhere in the Traditional Neighborhood character type zones as outlined in Framework OP
That doesn’t necessarily mean an RHID would be restricted from going somewhere else if the city council saw fit. It simply identifies where the city would prefer to see such districts form.
Read the full draft policy here.
Kansas puts limits on RHIDs too
- RHIDs cannot have more than 100 new units go up for sale or rent in a single calendar year under Kansas law.
- Plus, the average dwelling space size in a district cannot exceed 1,650 square feet.
- For an RHID to officially form, the affected school district, Johnson County government and the state of Kansas all have to sign off as well as the city council, said Assistant City Manager Jack Messer.
Next steps:
- Before the RHID policy is in effect, the full city council will have to vote on it.
- That being said, city staff have signaled that there will likely be a Committee of the Whole meeting before that for further discussion of this and other incentive policies the finance committee has reviewed.
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