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Paul Scott comment: Tax abatement program has its pluses and minuses

Posted: Fri, Jun 2, 2017 11:44 AM

(The following is a comment by's Paul Scott):

"I attended a meeting recently in which people were asked to give their opinion about the City of Decorah's program to award property tax reductions to people building homes within the city limits.  The three-year program is coming to an end in December, so the Decorah City Council has to decide whether to continue it or let it lapse.

There was a long silence after the question was asked.  I can understand the reluctance of contractors and real estate agents and bankers to say anything about the tax abatement program.  But I'm a news reporter, so I get paid for my opinions--and for taking flak after giving my opinion.

Has the tax abatement program been a success?  Yes--just not in the way it was intended.  If you'll remember, the program was sold as a way to create more affordable housing in Decorah.  The concept was that people would move out of $100,000 into $200,000 houses, opening the lower-priced homes to be bought by people who needed more affordable housing.

What has happened instead is that people have built $300,000 homes instead of buying existing $250,000 homes.  This has been a success--for Decorah's economy.  People continue to move here from out of town for their retirement.  Builders continue to make money building and selling the more expensive homes.  Realtors and bankers and advertising salespeople have made money working with the builders.

In three years, however, affordable housing has gotten more difficult to find, not less.  So does that mean the tax abatement program should be allowed to expire?  Or does it make sense to continue it--not as an affordable housing program, but as an economic development program?

Whatever the city council decides, there's one issue that city council members MUST find a way to tackle--it's getting increasingly tough for young couples or retired couples to afford housing in Decorah.  Having a lot of new construction happening in Decorah is good news--so long as Decorah housing options aren't limited to $300,000 houses."