Hampshire says buy house here, get back $3,500

HAMPSHIRE -- With 3,000 vacant lots targeted for housing -- but only two new building permits issued all year -- the village will start paying people to buy a new home here.

The village board has approved a "New Home Construction Incentive Program," under which someone who orders and buys a new home over the next 18 months will get a cash rebate of about $3,500.

The payments will be a refund of 75 percent of each home's "transition fee." This is a fee paid by the builder of each home to the village, on behalf of the village itself plus other governmental bodies that serve that development. Transition fees make up for the fact that real estate taxes aren't collected until the year after they are levied.

To qualify for a rebate, someone must buy a home whose building permit is applied for between now and Dec. 31, 2010. The program is limited to no more than 250 homes and applies only to homes bought by the final occupant.

"The rebate will be given directly to the homeowner, either at closing or soon thereafter," Village President Jeff Magnussen said. "The program is not intended to reduce the cost of a new home but rather will be given as an incentive to live in Hampshire."

To a large extent, the village is giving away other governmental bodies' money.

For example, if a home in the Lakewood Crossing subdivision is assessed a transition fee of $4,676, only $719 would go to the village. Most of the fee -- $3,215 -- would go to Community Unit School District 300. Smaller proportions would go to the Hampshire Fire Protection District ($351), Hampshire Township Park District ($292) and Ella Johnson Memorial Public Library District ($99).

Like the village, those governmental bodies now will lose 75 percent of what the transition fee would have given them.

While the village board voted unanimously for the program, not all those other governmental bodies' boards agreed that losing three-fourths of their fee was worth any extra construction the program might spur.

When Hampshire officials explained the plan to the board of each governmental body, the park district and Hampshire Fire Protection District supported the idea; Ella Johnson Library District's board took no position; and the plan was opposed by School District 300, Huntley School District 158, the Huntley Fire Protection District and the Huntley Library District.