Tupelo Revitalization: Highlights of committees' suggestions

By Emily Le Coz/NEMS Daily Journal

Make Tupelo’s housing market more competitive

FINDINGS: Cities thrive when they boast a solid base of homeowners, because these residents tend to invest in their properties, neighborhoods and schools.
But Tupelo struggles to compete for new homeowners with rural Lee County and its suburbs in part because Tupelo buyers can’t access USDA Guaranteed Rural Housing Loans. These loans provide zero-down housing payments, but they aren’t available inside federally designated urban areas, like Tupelo.
Tupelo buyers can’t access the grant while those outside the city can, which “creates a competitive disadvantage to attract first time, low, and middle income homebuyers to Tupelo.”
SOLUTIONS: Establish a Tupelo Home Loan Program. The city’s Finance Department would approve up to 300 loans using established credit for any person buying a single-family home inside the city limits. Homes must be used as the person’s primary residence.
Home buyers can use the money as a 20 percent community second position loan, which would eliminate the cost of private mortgage insurance and reduce the required down payment of a house to zero.
Loans can’t exceed $70,000. And borrowers will repay the loan at a 1 percent interest rate each month for a term not to exceed 180 months.
OUTCOME: If successful, the program will leverage $50 million in home ownership investments that will annually create $162,350 in city taxes and $326,500 in school taxes.
COST: $10 million
FUNDING SOURCE: Existing city funds or a municipal bond

Improve existing housing stock

FINDINGS: Most of Tupelo’s housing was built before 1995 while the faster-growing Guntown and Saltillo boast mostly newer construction. At the same time, it costs more to build new homes in Tupelo than elsewhere in Lee County.
“Homes of 15 years and older on average are on the market for over 380 days before being sold compared to 184 days for homes younger than 15 years old,” the report states. “Buyers, homeowners, and landlords are having great difficulty in finding renovation financing. This lack of access to capital greatly decreases the ability to rehab Tupelo’s existing housing stock and drives buyers to newer homes outside of Tupelo.”
SOLUTIONS: Establish a task force of developers, engineers, city planners and contractors to reduce the cost of public infrastructure in Tupelo by 10 percent, which would make it easier for builders to construct new homes in the city limits.
The city also should establish a $1 million home-renovation grant program that would give homeowners and landlords up to $10,000 matching money for improvements to homes built at least 15 years ago. The grant would be funded as a reimbursable expense through a private lending home improvement loan.
Finally, the city should establish a $2 million property maintenance fund. The Department of Development Services can use the money to target, acquire, and remove blighted and substandard housing units in Tupelo.
OUTCOME: The program should create about $2.5 million in older home investments, which will annually generate $10,600 in city taxes. It also aims to retain 100 existing families, who will upgrade their homes rather than leave Tupelo for another home.
COST: $3 million
FUNDING SOURCE: Existing city funds or a municipal bond

Reduce rental properties and code violations

FINDINGS: Communities with more than 30 percent rental housing have above-average crime rates and below average public school districts, according to a study of more than two dozen Southern cities.
Tupelo has 35 percent rental property; its crime rate hovers 46 percent above the national average, and its school district is on academic watch.
Rental properties, while serving a need, draw a transient population to the community and suffer more dilapidation than most homeowner-maintained properties. Yet the city has just two code enforcement officers.
SOLUTIONS: Reduce Tupelo’s percentage of rental housing to 25 percent to match the regional average by restricting the issuance of new rental permits. At the same time, create a Rental Inspection and Property Privilege Licensing Act charging rental property owners a fee to do business: $120 per year per apartment unit and $240 per year for duplex and single-family units.
The fees will create $850,000 in new revenue, which the city then can use to hire more code officers and to buy and demolish dilapidated properties.
Also, require a $10,000 residential rental property bond for each duplex and single-family dwelling and a $100,000 bond for apartment complexes. Use the bond money to correct code violations.
OUTCOME: Fewer rental properties, lower crime rate, decreased transient population, improved neighborhoods, better school district ranking.
COST: $850,000
FUNDING SOURCE: Fees charged to rental property owners, and likely passed on to renters at an average of $10 per month for apartment units and $20 per month for duplexes or houses.

Improve school enrollment figures

FINDINGS: Other communities that implemented college-tuition guarantee programs have boosted their public school enrollment and student academic achievement while halting their middle-class decline.
Tupelo has seen both its community and its school district suffer in the past decade while its nearby peers succeed.
SOLUTIONS: Establish a “Tupelo Promise” college-tuition guarantee program for a five-year trial period. During that time, tuition assistance would be offered to an estimated 1,500 students so they could any public Mississippi university.
The program would be open to any public high school, private high school or home school graduate who has lived in Tupelo for at least five years before graduating.
Students must first apply for all other tuition assistance, and they must maintain a 2.0 grade point average and complete 12 hours of college credit per semester to remain eligible.
The program would start with the 2012 graduating class; Three Rivers Planning and Development District would act as program administrator.
OUTCOME: More families with children will move to and stay in. The program also will raise student achievement and boost the number of children attending college, which then provides a better-educated work force.
COST: $3.2 million over the five-year period.
FUNDING SOURCE: The program must be assured through a public-private partnership with the city funding $550,000 annually and the private sector raising $100,000 annually.