Developer Grant Incentive

The Developer Grant Incentive is part of the Southside Revitalization Plan led by the City of Paducah, Kentucky. This initiative is designed to address long-standing housing and community development needs within the Southside area, a region identified by the city for targeted revitalization. The plan was adopted by the Paducah Board of Commissioners on August 12, 2025, and builds upon community input gathered since 2021. The Southside Revitalization Plan outlines a strategic and housing-focused approach to enhance economic opportunity, accessibility, and residential infrastructure in a historically underserved area of Paducah. As one of two main funding mechanisms under the Southside Incentive Programs for Phase 1, the Developer Grant Incentive aims to close the financial gap between the cost of building a new single-family home and the property's appraised value. Specifically, it provides up to $75,000 per property to bridge this gap, enabling developers and future homeowners to move forward with construction projects that would otherwise be financially unviable. For example, if a home costs $200,000 to build but is only appraised at $125,000, the grant would cover the $75,000 difference. This amount is disbursed at closing and used as a down payment for the homebuyer. A key stipulation of the grant is that the homeowner must live in the home for a minimum of ten years, or repay a prorated portion of the grant if they move earlier. This incentive program is administered by the Planning Department and the Urban Renewal and Community Development Agency (URCDA), which has prior experience overseeing similar neighborhood revitalization efforts in Paducah. Developers must apply for the incentive prior to construction and are only eligible if they have secured a buyer before grant disbursement. Applications will be reviewed and approved by URCDA. Key application requirements include submission of a deed or city-owned lot bid form, site and construction plans, a breakdown of construction costs by category, proof of financial capacity, insurance documentation, business license, and proof of good standing with the Secretary of State. The Developer Grant is only available for properties within the designated Phase One Program Area, which includes 1061 Southside parcels, 400 of which are currently vacant. Applications are evaluated on a first-come, first-served basis, and incomplete submissions will be deemed invalid. Homes that are already under construction at the time of application are not eligible. The City of Paducah anticipates that developers will begin work on approximately ten new homes in spring 2026. To support potential applicants, the city offers technical assistance workshops to guide them through the application process. These workshops are open to the public and offer help with both the paper and online application processes. The Developer Agreement, which must be signed upon approval, outlines obligations for both the developer and the City. These include the requirement to build a site-constructed, conventionally framed single-family home and to ensure compliance with the terms of the Southside Grant Program. In summary, the Developer Grant Incentive is a targeted financial mechanism to stimulate new housing development in the Southside of Paducah. By eliminating the financial disincentive caused by low property appraisals, the program promotes community investment, encourages local development, and contributes to long-term neighborhood revitalization.