Harmony Offers Incentives for Home Building

Created: 06/30/2014 7:28 PM
By: Steph Crock

(ABC 6 News) -- A smaller southeast Minnesota community says their businesses are thriving, but they're still struggling to get people to build new homes in the area. The city of Harmony has voted to use extra dollars that have been set aside for economic development, for incentives to home builders.

Harmony is used to having visitors with their numerous tourist attractions. "There's the Niagra Cave just south of town, a wood carving museum, and there's the bike trail..." listed Harmony Mayor Steve Donney.

What they're struggling with is getting people to stick around long-term. "How can we get them to live here in Harmony not just be here during the day then go home at night," said Chris Giesen with the Harmony Economic Development Authority.

Mayor Donney has lived there for 35 years and says he's noticed fewer young families moving to town. "Aging population is probably the most significant," he said.

"One of the things that we were finding out through conversations with employers, was that they were looking to move or start a family or life on their own, ( their employees) and they didn’t want to move into a $50,000 'fixer-upper,'" said Giesen.

To attract the younger generation, plus spur construction and economic growth, city council has voted to give cash incentives to people who build homes in Harmony. "Depending on what type of house you build, houses $125,000 and above will qualify for some sort of rebate starting at $5,000 all the way up to $12,000, so to qualify for a $12,000 rebate, it would be approximately a $250,000 house," said Giesen.

"We've identified at least 15 vacant lots that could be built on right away," said Mayor Donney.

We wanted to know, where is this extra cash coming from? "It was through an old tax increment financing district, or TIF, and it was an old district that was set up in the 80's and so when that was decertified a few years ago, we had some money that was returned to us as a part of that," said Giesen.

"That way it didn’t have to come right from taxes," said Mayor Donney.

The building incentive idea was actually modeled after the city of Stewartville. They did something very similar only with the Rochester City Sales Tax money.