The city of Columbus could possibly tap into state funds to aid in marketing property it acquires through its blight program, Interim Director of Planning and Community Development George Irby told councilmen Thursday during a work session at City Hall.
Irby and Mississippi Home Corporation Executive Director Scott Spivey – who attended the meeting via Zoom – said the city could try to leverage about $3 million in state funds to give incentives to developers.
In 2022, the council set aside $500,000 of its American Rescue Plan Act money for a blight remediation program. Since then the city has been awarded $6 million from the federal Department of Housing and Urban Development in two different tranches to throw in the pot.
The Lowndes County Board of Supervisors had previously offered $350,000 of its ARPA allotment for the program, but de-obligated the money in March after deciding the money would be better spent buying equipment for the road department.
Once up and running, the program will buy blighted property, demolish or rehabilitate any existing structure on it and then market it to redevelopers who will build affordable housing. Vacant and overgrown lots also qualify.
Spivey said the Home Corp. has about $3 million available in a revolving loan fund that may be useful for the blight program.
“That money is not being utilized right now,” Spivey said. “If the city is using the HUD (money) to tear down blighted properties, I’m willing to propose to my board using the (loan fund) to do the construction lending for the home builders.”
Home builders would build homes at 0% interest, Spivey said, and wouldn’t have to start making loan payments until the newly constructed homes sell.
“The problem that we see around the country is that the cost of construction is just too high with materials and labor costs where they are,” Spivey said. “… If you take the land costs out (because the city owns the land) and construction costs out, you’re doing a significant job decreasing the cost of the home.”
Responding to a question from Mayor Keith Gaskin, Spivey said there are no similar programs in the state.
“This is a unique situation in the sense that you guys have $6 million from HUD,” Spivey said. “We had a small blight elimination program, and it was kind of a square peg in a round hole. Given that you’ve gotten federal funds, we think this will work more efficiently.”
Ward 5 Councilman Stephen Jones asked Spivey how to sell the program to developers.
“My recommendation would be to not nickel and dime this,” Spivey said. “You want to put out a request for home builders or developers to come in and do all of them. … I think there would be an appetite for something like this because land and construction prices are reduced.”
Ward 4 Councilman Pierre Beard wondered if the fact the properties in question are scattered across the city would be a disincentive for future developers.
“I think (developers) are used to doing infill development like this,” Spivey said. “Regardless of how they prefer to do things, developers like money and this is a great way for them to make some.”
“The risk is nil,” Irby added.
Spivey recommended, if the Home Corp. board approves the partnership, the city submit a joint proposal to HUD regarding the loan program.
“Ask HUD if it fits within the parameters of the grant it’s giving the city and if it fits within the parameters they want (with the blight program) before we move forward,” Spivey said.
Brian Jones is the local government reporter for Columbus and Lowndes County.
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