A new property tax rebate program crafted with the help of developers, real estate companies and builders is aimed at reversing a steep decline in new construction starts in Davenport.

Davenport Mayor Bill Gluba said the numbers are grim and getting worse.

Even before the nationwide housing crisis hit in 2007, new construction of single-family houses started slipping in 2004. That year 288 new homes were built, but by 2008 that number had fallen to 85. So far in 2009, new construction has begun on only 26 houses in the city.

Under the plan, called Davenport NOW, people who build a home, renovate an old house or build or expand an existing business in the already developed sections of Davenport would receive a 50 percent rebate on the city portion of their property taxes for 10 years.

Homeowners also can choose to receive an upfront payment for the amount of the rebate, minus some financing costs incurred by the city. That means the owner of a new $200,000 home would receive a one-time payment of about $8,570. The owner of a new $300,000 home would get nearly $13,000.

“We think this will stimulate the local economy, create jobs and expand the tax base,” Gluba said.

Gluba has met individually with all 10 aldermen and says he’s confident they support the concept of the program.

The mayor and others have been searching for a new economic development tool since voters rejected the Davenport Promise program in March. That program sought to increase population, and home ownership, in Davenport through college tuition reimbursements for high school graduates.

“We have to start turning this housing decline around,” Gluba said. “Without rooftops, commercial businesses and current businesses don’t expand and create jobs. Many of our platted subdivisions are growing weeds, but not houses.”

About 1,250 to 1,750 infill and undeveloped lots in the city would be eligible under the program.

City officials have met with developers, Realtors and builders over several months, looking for an economic development tool that would help reverse the decline in new construction starts without placing an additional burden on current taxpayers.

After rejecting a traditional residential Tax Increment Financing program or buydowns of home mortgage rates, those brainstorming new ideas came up with the Davenport NOW proposal.

The program would be available for any new owner-occupied residential construction, commercial construction (excluding apartments) or improvement in excess of $5,000 of the new assessed value for any existing owner-occupied home.

Davenport NOW would apply only in areas of the city that already have sewer, water, garbage, police, fire and other city services, while traditional greenfield TIFs only apply to undeveloped areas. In addition, the new program would reduce only the city’s portion of property taxes, allowing the school district to continue receiving its full share.

Also, unlike traditional TIFs, most of the rebates would go directly into homeowners’ pockets after the fact, rather than upfront to developers.

Best of all, City Adminstrator Craig Malin said, even if the program resulted in a large amount of population growth, the way it’s set up would not burden existing taxpayers. The city would not be losing out on any tax revenue it doesn’t already collect, and because the new construction would be confined to already-serviced areas, the burden on service delivery would be minimal, he said.

“We would solve any ‘wildly successful’ problem,” Malin said. “We will not extend infrastructure costs beyond our ability to serve. We can well take care of any new rooftops.”

People with a vested interest in seeing new construction numbers rebound like what they’re hearing from Davenport leaders.

“Housing means jobs,” said Dave Burrows, executive officer of the Quad-Cities Homebuilders Association. “It was a slump in housing that led this entire country into the economic chaos we’re in now, and it’s going to be housing that leads us out. I think this would be an excellent economic development tool. Our sales are a little stagnant in Davenport now, and this would give people a strong incentive to look at Davenport.”

Dick McNamara, who is building 26 new townhomes at 29th and Brady streets, said existing city incentives helped him pull the trigger on that deal. Any other tools Davenport brings to the table can only help.

“What the mayor’s trying to do is create real desirable infill projects for anyone interested in Davenport,” McNamara said. “If you’ve got people comparing communities like Bettendorf and Davenport and you can tell them their taxes for the next 10 years will be lower in Davenport, they are going to listen.”

Officials from the Quad-Cities’ two largest real estate companies — Mel Foster Co. and Ruhl & Ruhl Realtors — are in favor of the plan.

“We think it’s a great opportunity for the city and its residents, and Mel Foster Co. is in full support of the program,” said Kris Ratigan, director of marketing.

David Falk, director of new construction and development for Ruhl & Ruhl, said the city reaching out to people in the industry before bringing the plan up for a vote has been well-received.

“It’s always good when you’re looking at these things to try and get opinions from the people who are involved in the industry,” he said, adding that he thinks that lesson was learned in the wake of the Davenport Promise defeat.