Emporia Sees Rise in Upper-Story Housing

      Comments Off on Emporia Sees Rise in Upper-Story Housing
Share This Article

For many communities, upper-story housing is a quandary that is tough to solve. Decades of disinvestment in downtowns and building code regulations have limited interest in these spaces. However, some communities have seen a resurgence in this type of housing. More people long for restaurants and services that a downtown provides in a more walkable environment in close proximity to where they live. The city of Emporia, Kansas, has seen this increase in interest first-hand.

Emporia, Kansas

Located in east-central Kansas, the town of Emporia is home to over 24,000 residents. Initially a major railroad hub, Emporia has evolved over time and successfully diversified its economy. Emporia also hosts two colleges Emporia State University and Flint Hills Technical College. In the late 1800s Emporia had both Emporia State University and the College of Emporia, which was rare for a community of its size at that time. For this, it was sometimes called the “Athens of Kansas.”

DOWNTOWN EMPORIA

Downtown Emporia is focused around Commercial Street (Highway 99). Although the downtown business district stretches a few streets to either side of this main north-south thoroughfare, Commercial is the central hub of downtown activity. This route through town also connects into Emporia State University and eventually to Interstate 35 to the north.

It is quite obvious that Emporia is an active Main Street community. In addition to a good number of well-maintained and rehabilitated buildings, landscaping and period lighting line the streets.

Using RHID’s for Upper-Story Housing

The Kansas legislature created the Rural Housing Incentive District act in 1998. The intent of the bill was to assist with the development and renovation of housing in rural areas of Kansas through the financing of public improvements needed to support the housing.

To fund the improvements, a Rural Housing Incentive District (RHID) captures the incremental increase in real property taxes that are created by a housing development for up to 25 years. In essence, it is a Tax Increment Financing (TIF) district to support the development of housing.

One of the great things about the RHID program is that it is specifically targeted for rural areas. Any city in Kansas with a population of less than 40,000 that lies in a county with a population of less than 60,000.  Or it can be used in any county with a population of less than 40,000.

Gilmore Bell, a public finance law firm, created a presentation on RHID that is a pretty good primer on the program. It is an older presentation though as it was created before legislation in 2021 that authorized the use of the program to be used for the renovation of upper-story housing. This was significant as previously the program didn’t previously allow the funding to go toward the actual buildings.

700 Block Building

700 Block Building; Image Courtesy – Emporia Main Street

Use of RHID’s in Downtown Emporia

Emporia Main Street (@ETownMainStreet) immediately had a project in mind when the legislation that approved the use of RHID’s for upper-story improvements went into effect in July 2021. Local stakeholders formed an investor group and looked for properties in downtown Emporia to invest in. “We treated it like a ‘Shark Tank‘ for property,” stated Casey Woods, the Emporia Main Street Director. Casey was obviously referring to the popular TV show where budding entrepreneurs would pitch their ideas to a panel of experienced business owners to entice their investment.

But instead of looking at a new product, these local investors look at buildings in downtown Emporia that could be good investments. The building that drew their interest was a former car dealership in the 700 block of Commercial Street. But the investment group didn’t just look at adding renovated upper-story housing when looking at this structure. Through the help of the historic tax credits program, they made improvements to the basement and created three commercial bays on the first floor. Then they utilized the tax credits and the RHID program for upper-story renovations to add 10 apartment units of various sizes to the upper-story housing stock in Emporia.

Interestingly enough, the 700 block project was the first use of the Rural Housing Incentive District for upper story housing in all of Kansas.

700 Block Main Street Rendering

700 Block Building Rendering; Image Courtesy – Emporia Main Street

Interest in Upper-Story Housing is Growing

The 700 block project is not a one-time use of RHID’s for upper-story housing in Emporia. Five more projects, comprising of over 30 more units are in various stages of the approval process. According to Woods, “There’s several others that we are working with to try and get those projects to the point where we can make the application for RHID.”

In fact, the interest in upper-story housing has grown significantly in recent years. “Over the past 13 years,” states Woods, “we have added over 200 housing units in the upper stories of buildings in the downtown area.”

The addition of redundant fiber throughout downtown is also enticing businesses and at-home workers alike. Stable high-speed internet is quickly becoming a must, rather than a luxury.

They have found that with this influx of additional units, more businesses can afford to stay open later. There’s also a better mix of uses in downtown Emporia. Including a better mix of uses with more restaurants and entertainment options. With more people living and working downtown, they are spending less on gas to get around. Hence, they have more disposable income to spend downtown as well.

It Benefits More Than Downtown Residents and Businesses

Developers are seeing it as a worthwhile investment as well. The walls and roof are already existing in these downtown structures, so contractors can work year-round without being exposed to the elements. The base infrastructure is there as well, reducing developers’ overall development costs.

Return on investment for taxpayers throughout Emporia is significant as well. This re-evolution of upper-story housing in Emporia is better than “greenfield” development. With greenfield development, there are streets as well as water and sewer lines that have to go in. These are “not set it and forget it” as Woods says. There are long-term maintenance and repair considerations for this infrastructure as well. Upper-story redevelopment is even better than infill development. Not only are the services already there, but the four walls are also there.

Downtown Emporia Doesn’t Rest

Emporia Main Street is working on a number of different initiatives beyond upper-story housing. They are working on restoring and filling commercial bays throughout their downtown. Then there are the 40 or so events that they put on each year.

But it’s the support of entrepreneurship in Emporia that stands out.

It’s not just the variety of different entrepreneurial classes that they offer. They’ve also developed a business incubator within the Emporia Main Street building. Selected entrepreneurs have access to space opposite the Main Street office to grow their business. This is notable as help is available right next door.

Business Incubator

Business Incubator; Image Courtesy – Emporia Main Street

They receive the first six months of rent-free, another six months at a reduced rate, and six more months at market rate. This provides these young startups a prime location (at the corner of Commercial and 8th Ave) with the financial flexibility early on to get on their feet. Then, Emporia Main Street staff help them find a more permanent location elsewhere in downtown Emporia.

They’ve even created a fabrication lab that helps existing businesses diversify their product line by trying out new product ideas. It also helps entrepreneurs through the prototyping process. Along similar lines, they are also teaming up with the Center on Rural Innovation to develop technology-based entrepreneurship.

Trox Incubator

Trox Incubator; Image Courtesy – Emporia Main Street

Additional Reading

For some additional reading on Rural Housing Incentive Districts in Kansas check out the links below. Even if you’re not from Kansas, as well as what’s going on with Emporia Main Street,  check out RHID’s. They might be a tool to propose to your state legislator. I’ve also included links to Emporia Main Street’s website and social media to learn more about what they’ve got going on.