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Discuss and provide direction on the Demolition-Rebuild Program.
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Discuss and provide direction on the Demolition-Rebuild Program.
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REQUESTOR:
Mayor Terry Lynne, Mayor Pro Tem Tina Bennett-Burton
BACKGROUND:
In 2009, the City Council approved a resolution to allow residents of Farmers Branch to demolish and rebuild their existing homes with cash and property tax incentives. The resolution was later amended to include builders and developers as eligible for the incentive.
Current incentives depend on property assessed value and range from a $30,000 cash grant to up to seven (7) years of City property tax rebate. The City Council must review and approve all applications.
As part of our ongoing evaluation of the Demolition Rebuild (Demo/Rebuild) program, staff reached out to several experienced builders for feedback, including Todd Bonneau, Rick and Beth Davis, Mike Kleber, and Tom Cusick.
Their responses highlighted three key areas of focus:
* Program Simplification: The current structure is overly complex and difficult to explain. Builders emphasized the need for a simpler, more accessible process that can be easily understood by all participants.
* Fairness and Equity: There is strong support for establishing a clear and consistent standard for total taxable value increases. This would ensure that homeowners better understand the program's requirements and receive equitable incentives based on their investment.
* Program Reach: Builders encouraged the City to promote the use of the program in other neighborhoods.
Following the discussion at the June 17 City Council meeting, it was discussed that the home builder and/or developer drives the program, and its expansion into other neighborhoods will depend on applicants. In 2024, the program received a total of 15 applicants, with most coming from District 5 (14 homes), followed by District 4 (1 home). The incentives used were spread across four options, with Option 4 (Original Improvement Value - $150,001 and up; Cash Grant - 0; City Property Tax Rebate - 7 years) being the most popular (11 homes).
As of 2025, the program has gained more traction, with 25 applicants so far. District 5 again saw the most interest (16 homes), followed by Districts 3 (4 homes), 4 (3 homes), and 1 (1 home). Incentive usage also reflects this growth, with Option 4 remaining the most utilized (13 homes). The program shows increasing momentum, growing from 15 applications last year to 25 this year. The estimated total liability cost for the Demo/Rebuild program was $4,254,543.73.
Additional feedback from the builder group indicated that the majority shared a preference for a longer-term tax rebate. Of the four builders who provided input, one expressed support for the proposed structure. The majority shared a preference for a longer-term tax rebate only, no cash grant, citing the following reasons:
* The $10,000 grant does not significantly offset demolition costs, making it a less impactful incentive.
* Most clients roll demolition expenses into their construction loans, so a smaller upfront grant provides limited benefit to either the builder or the homeowner.
* A 7-year property tax rebate offers long-term value to new residents without requiring upfront City funding or voter approval of a bond.
DISCUSSION:
Options for consideration:
* Consider a $10,000 cash grant and a 3-year property tax rebate.
* Consider no cash grant and a longer property tax rebate.
* No change to the existing program.
DISTRICT:
Citywide
ATTACHMENT(S):
1. Demo-Rebuild Analysis
2. Presentation