Newton purchases 100-year-old home to remove neighborhood blight

Newton City Council voted to use low-moderate income set-aside funds to buy a 100-year-old home that is in poor condition and is likely going to be demolished.

According to city documents, the owner of the property at 335 S. Fifth Ave. W. agreed to sell it for $63,804. The county assessor had classified the property as “very poor” condition. The purchase price is 58 percent of the total assessed value of $109,470, which is consistent with other D&D program purchases.

Jerry Chandler, Jr., a Newton resident, criticized the city for buying the property, especially if its taxes are not delinquent. He felt it didn’t make sense for the city to buy the house when the homeowner was already supplying revenue through property taxes. Chandler said, “Newton shouldn’t be in the real estate business.”

If the home is demolished, the remaining property is of a suitable size for redevelopment. The property is approximately 63 feet by 123 feet, which is a similar lot size for a nearby home (70 feet by 107 feet) that was built this past summer near the 500 block of West Fourth Street South.

Council member Randy Ervin asked where the LMI money comes from and why it is apart of this action. Newton City Administrator Matt Muckler said when the city creates a residential TIF it has to set aside funding that is to be used for housing projects that have some type of low-moderate income use.

“Council has adopted a policy on what are the acceptable uses for those funds, so that’s where this money would come from,” Muckler said.

Agenda documents explain that when tax increment financing (TIF) is used for housing development, the state requires a portion to be set aside for LMI uses.

One of the permitted uses for LMI funds is blight removal to uplift LMI neighborhoods. Specifically, the policy states: “Acquiring and demolishing blight in neighborhoods uplifts property values for the surrounding owners. In addition, it provides a redevelopment lot for the construction of a new affordable home.”

The property in question is located within Census Tract 405, which has a median household income of $46,127. This is less than 80 percent of the $54,227.20 median household income for Jasper County. Staff and the property owner went back and forth on pricing; the final price was the lowest staff felt they could get.

The city council voted 5-1 to approve the purchase, with Ervin voting no.