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Housing incentive renewal probable

New home buyers in Fargo should continue seeing a two-year tax incentive, the city's Tax Exempt Review Committee decided Tuesday. The long-standing exemption gives new buyers a $75,000 break on the building value of all new single-family homes, t...

New home buyers in Fargo should continue seeing a two-year tax incentive, the city's Tax Exempt Review Committee decided Tuesday.

The long-standing exemption gives new buyers a $75,000 break on the building value of all new single-family homes, townhomes, condominiums and duplexes.

The exemption, which city officials review on an annual basis, would begin Feb. 1, after the current exemption expires. City commissioners must give final approval, which they have done since 1983.

"We've had it in some form or fashion ever since," said City Assessor Ben Hushka.

Last January, Fargo commissioners voted 3-2 in favor of the exemption. Commissioner Mike Williams wanted restrictions for more expensive homes.

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An exemption for all homes, regardless of value, won out as commissioners said they wanted to keep a level playing field with West Fargo.

Committee members expressed some of the same concerns at Tuesday's meeting before approving the exemption unanimously. West Fargo officials previously approved the exemption for 2007.

A 2005 report shows 1,238 residential units were built in the metropolitan area, with 40 percent of new homes in Fargo and 39 percent in West Fargo.

"The last five years have seen a steady shift of the housing market away from Fargo and into West Fargo," reads a letter from the Home Builders Association of Fargo-Moorhead to Fargo commissioners. "There are many reasons for such a shift, but one thing is clear, the competition between cities in the region is at an all-time high."

The letter states the tax exemption is one tool to help cities increase home ownership. In 2005, 513 properties in Fargo received the exemption, and Hushka said he expects a similar number in 2007.

Neither Moorhead nor Dilworth have a formal tax exemption for new home buyers. However, in practice, buyers don't receive tax bills for up to two years due to how the cities certify improved properties, according to officials.

In Moorhead, most buyers don't see a tax bill for a new home in the first 18 months, City Manager Bruce Messelt said.

Readers can reach Forum reporter

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Steven P. Wagner at (701) 241-5542

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