Normal mayor floats loan interest rate buydown program to address housing shortage

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Normal Mayor Chris Koos has moved slightly off of his generally free market stance on development projects that could reduce the community housing shortage for mid-tier workers.

Koos, speaking on WGLT’s Sound Ideas, said he’s now thinking about low interest buydowns of loans to get housing projects started, if a project meets the needs of the town for workforce housing. Such buydowns can lower the effective interest rate for financing used to put up apartment buildings.

“I’ve had conversations with the state about partnering on that, the municipality is involved at a certain level and the state is involved at a certain level,” said Koos, adding the details of those conversations are too early to talk about publicly.

Koos said he talked briefly with Gov. JB Pritzker about housing during a joint appearance Tuesday at Ferrero in Bloomington. Koos said Pritzker agreed generally the state should have some role in alleviating a workforce housing shortage.

Some central Illinois developers have housing projects that target a young professional audience if interest rates drop a couple of points, Koos said, adding recent signals from the Federal Reserve make interest rate reductions of that magnitude less likely this year.

Koos cautioned that even if a loan buy-down program were to be approved today, if would be nine months to a year before new residential units would likely be available.

He also said he is not sure a template for a program exists in other places, and the town would need to research best practices and what has worked in other areas before moving into that kind of incentive.

On Monday, the town council heard a presentation from the McLean County Regional Planning Commission, talking about next steps to deal with the housing crisis and affordable housing crisis. What is the town of Normal already doing that is in the regional housing recovery plan?

“I think that’s something that we should look at. We’ve always tried to be on a level playing field with the city of Bloomington. But I think, to me at this point, it’s more project by project based … What land do we have available? What developer is ready to develop that land and with what kind of housing? And how do we how do we help make that happen?” said Koos.

Tobacco shop ordinance

The Normal Town Council on Monday approved an ordinance regulating tobacco and vape shops, requiring they be no closer than 1,500 feet from each other or schools, daycare centers, and churches.

“It surprised me that the vote turned out the way it did, because initially there was some concern about the ordinance,” said Koos. “I think we’re when the council realized it was pretty much mirrored to cannabis and gaming, it made sense to them that it wasn’t too invasive in terms of anti-business.”

Existing stores will be grandfathered in and be exempt from the spacing limit.

“Part of the concerns we had were health-related. A lot of nicotine and nicotine related products are heavily marketed to young people. They see that as a growing market. And that was a concern for the council,” said Koos. “There are some European countries that are actually looking at banning sales to anybody born after 2005. It’s a dangerous product and vaping has come under concern for that. We thought it was prudent to regulate it.”

Rules for the distance between retail alcohol stores and churches, schools and daycares is far less than it is for cannabis, tobacco, and video gambling — just 100 feet. And there is no restriction on how close retail alcohol outlets can be to each other.

Twelve percent of U.S. residents said they smoke or use tobacco, according to the 2023 edition of the annual Gallup organization survey of consumption patterns. The number for cannabis is 17%. For alcohol, it’s 62%.

Koos acknowledged there is far more societal damage done from ills associated with drinking than from vaping. He doubted, though, there would be appetite among council members, or town residents to establish similar distance limits for retail alcohol stores.

“We could go back and tighten up and model our alcohol ordinance after our cannabis ordinance. But there’d be so much grandfathering done, it might be 100 years for that to change,” said Koos.