LIMA — After urgings by the business community, the City of Lima has agreed to eliminate the water tap-in fee that some investors say have been holding back housing development.
Lima’s tap fee, also known as a water-line connection fee, stood at $3,900 before its reduction to zero.
“The elimination of tap fees, paired with existing programs, will jumpstart private investment in Lima’s neighborhoods,” Mayor David Berger said. “Incentives like these for developing vacant lots and renovating existing homes are important opportunities.”
“Right now, there’s a negligible amount of activity,” Berger said.
The Allen Water District Board voted to reduce its water tap-in fee from $2,500 to $500 just this past week, and the Allen County Commissioners are expected to take up a similar measure before the end of the month.
Financial and business leaders have pushed for the reduction in tap-in fees throughout the last year.
“The city, the county and the Allen Water District have been discussing this for the last several months, and we all agree that reducing tap fees will spur housing development within the area,” Director of Utilities Mike Caprella said.
Other local governments with similar tap-in fee rates will often recoup the material and labor costs associated with connecting the city’s water system to residential construction by having higher water rates after someone taps into the system. Berger said the city had no plans to make changes to Lima’s water rates.
If the county reduces their rates by the end of the month, residential water connection fees will be zero for customers within the city and $500 for customers outside the city starting in July.
Outside of tap-in fees, the city has three programs on the books meant to incentivize housing investment. The Community Reinvestment Area Tax Abatements exempts up to 100 percent of improvements added to residential lots within particular neighborhoods for up to 15 years. HOME funding offers repair loans meant to assist homeowners who are repairing major health and safety violations. The First Home Lima program makes down payment loans available for residents with income below 80 percent of median income levels who are buying their first home in Lima.
“We’ve been looking for strategies to promote housing rehabilitation and construction to encourage new residents to move to Lima. The elimination of residential tap fees is just one tool the city will use to influence development and encourage revitalization in the city’s neighborhoods,” Director of Community Development Susan Crotty said.
Reach Josh Ellerbrock at 567-242-0398.