Chamber Testifies in Support of Housing Diversity Tax Exemption

March 5, 2024

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The Springfield Area Chamber of Commerce spoke to the Springfield City Council in favor of the Housing Diversity Tax Exemption (HDTE) program during a public hearing Monday evening. The HDTE program is a critical tool for addressing Springfield’s pressing housing scarcity and housing diversity, both of which play a critical role in nurturing a robust economy.

The Chamber is especially encouraged by the program’s potential to stimulate mixed-use development in Springfield. By incentivizing projects that integrate commercial and residential spaces, we can create more dynamic and accessible neighborhoods. In developing the program, the City has convened stakeholder groups with local developers, and has taken their feedback into consideration in developing a program that provides clear and objective standards for approval, and focuses on certainty, efficiency, and flexibility. As the program is further evaluated, the Chamber has two areas of consideration they believe would bring increased flexibility to the program. See below for the Chamber’s full written testimony.

For more information on the Springfield Chamber’s efforts around housing diversity, please view the following articles in The Bottom Line:

March 4, 2024
RE: City of Springfield Housing Diversity Tax Exemption
TO: Springfield Mayor VanGordon and City Councilors

I am writing to you on behalf of the Springfield Area Chamber of Commerce, representing over 780 business member organizations, regarding the Housing Diversity Tax Exemption (HDTE) proposal.

Springfield’s housing scarcity significantly contributes to the local cost of living, impacting both residents and businesses. Our discussions with employers have emphasized the critical need for housing diversity and the impact it has on our local economy, particularly in attracting and retaining a qualified workforce. As the primary advocate for our business community, the Chamber recognizes the importance of addressing this issue to maintain a vibrant and sustainable local economy.

The Chamber commends the recent efforts of the City of Springfield’s staff and City Council in addressing housing and development challenges. By incorporating feedback from stakeholders, the City demonstrates a commitment to collaborative and effective policymaking.

The proposed HDTE program appears to be a promising step forward in catalyzing new housing starts while ensuring flexibility for projects that offer significant community and economic benefits. We appreciate the intention to minimize bureaucratic hurdles by providing clear and objective standards for project approval, thereby enhancing efficiency and certainty in the development process.

Moreover, the HDTE program has the potential to stimulate mixed-use development in our city, fostering vibrant communities and supporting local businesses. By incentivizing projects that integrate commercial and residential spaces, including market rate, we will create more dynamic and accessible neighborhoods.

However, we have heard several suggestions from the development community that would further enhance the program’s effectiveness:

We urge you to reconsider the exclusion of parking from the tax exemption, especially for mixed-use zoned properties. Adequate parking infrastructure is essential for supporting commercial activities and ensuring the success of mixed-use developments. Without this inclusion, developers may face challenges in providing sufficient parking, which could hinder the viability of their projects.

We recommend extending the application timeline beyond the permitting phase. This extension would allow developers more time to assess eligible community benefit options. By providing additional time for this assessment, developers can make more informed decisions that align with the needs of the community, enhance the overall impact of the program, and ensure projects make it over the finish line.

We are encouraged that the HDTE program largely reflects the sentiments expressed by local developers regarding the importance of certainty, efficiency, and flexibility. We urge the City and public agency partners maintain an adaptive and flexible view of the program guidelines, monitoring and adjusting in response to community and market trends, challenges, successes, and opportunities.

By including parking in the tax exemption, extending the application timeline, and maintaining an adaptive policy criteria, you will ensure that the program meets the objectives of flexibility and maximizes the program’s positive impact on our community.

The Springfield Chamber appreciates the City’s efforts in crafting a program that aligns with the community’s goals and solves housing diversity and mixed-use project development challenges.

Warm regards,

Vonnie Mikkelsen