By Joshua Schuetz
The City of Harmony’s tax initiative program for new housing has proven a smashing success over the past eight years, adding 19 units and more than $3 million to the local tax base. It’s a
success that has gotten the city attention from the Wall Street Journal, Bloomberg and other national and international news outlets.
CEDA team member Chris Giesen said the program started in 2014 to tackle a big problem:
“We did studies and they showed that we were on the wrong side of some trends,” Giesen said. “We were the oldest city in our part of southeast Minnesota and had the lowest income, too.” Giesen and the Harmony EDA got to work on the problem and developed a program to offer cash rebates of up to $12,000 on new construction requiring that each project create at least $125,000 in taxable value. Starting in 2023, the maximum rebate increased to $20,000.
So far, the program has proven wildly successful, attracting new residents and helping current residents living in starter homes move up into higher-level housing, which made the market more affordable for entry-level homebuyers. Most importantly, the program played a part in reversing Harmony’s demographic decline.
“The program has attracted new people to town and I would say half of rebate recipients we can trace back to people who weren’t living in town before,” Giesen said. “When we did the census, it showed two and a quarter percent growth, and we were one of only three cities in Fillmore County to grow, which was great.” Giesen said programs like Harmony’s show how CEDA’s collaborative approach can help communities tackle their biggest challenges.“It’s an example of being creative with what CEDA does, when we’re meeting the city where it’s at, we were able to help them figure out what made sense for them,” he said.