JOHN DAY — The John Day Urban Renewal Agency is suspending its housing incentives program until further notice.

“Suspension of the Agency’s incentive program is necessary due to funding unavailability or insufficiency,” John Day City Manager Melissa Bethel said in an email to the Blue Mountain Eagle announcing the suspension.

Bethel also said that all pending applications for the program will remain in “pending status.” The URA will not issue any further payments on applications that have already been approved during the suspension.

The city currently has three pending applications for the URA incentives program. Bethel said she believes payments for applications that have already been approved are already paid out.

Concerns over the city’s ability to pay incentives stem from a $1.8 million line of credit the city was approved for, of which the city has tapped $900,000 to assist in helping develop properties within the urban renewal district. While the amount the city owes for the $900,000 has not yet been calculated, the cost of repaying the full $1.8 million would be $120,000 a year for 20 years.

Bethel said the city currently collects about $92,000 in property taxes annually from its urban renewal program. She added that the city will not be seeking to access the remaining funds in the $1.8 million line of credit.

The John Day Urban Renewal Agency, created in 2018 as a way to encourage new home construction in the city, has four incentive programs available for homebuilders, homeowners and developers.

The new home incentive program gives builders a 7% cash rebate on new home construction. The amount of the cash rebate is based on the increase in the property’s assessed value.

The existing home remodel incentive program pays homeowners a 15% cash rebate on substantial improvements to a home’s facade or structure, major remodels and new additions that add rooms and living space. Like the new home incentive program, the amount of the rebate is based on the increase in the property’s assessed value following the improvements.

The minimum assessed value increase required to qualify for the existing home remodel incentive program is $10,000.

The land development incentive program provides incentives for the development of housing units within the URA’s plan area and is one of two incentive programs aimed at land developers. Incentives for the land development incentive program include a direct contribution of funds, a rebate of a portion of property taxes paid, contributions to the developer for the development of infrastructure and an agreement for the URA to complete infrastructure improvements that are otherwise required as a condition for development approval.

The final incentive the URA is suspending is the infrastructure investment program, which allows the URA to directly complete infrastructure improvements as outlined by the URA board to help facilitate housing development or complete improvements specified in a development agreement that tie the improvements to a specific housing development.

The land development incentive program contemplates incentives for private land developers. The infrastructure investment program assumes work will be done by either the URA, by the city of John Day through a public agency cooperative agreement or through another public entity affiliated with the URA.

Bethel said the long-term future of the incentives program won’t be known until after budget season. If the city has enough money, Bethel said, the incentive program will be restarted after a budget is adopted for the new fiscal year that begins July 1.