SOUTH BEND, Ind. – South Bend Mayor James Mueller announced the New Neighborhood Homes Initiative Thursday, supporting the development of affordable housing across the city.

The initiative’s first project is to change the policy for utility connection fees. City officials also introduced a reimbursement program for the costs of physical connections to water and sewer services.

“As a growing city, we need to build more homes that our residents can afford," said Mayor Mueller. "I am proud of our Public Works team for developing these innovative policies and programs to lower the effective cost of housing construction in South Bend. Rising labor, material and home prices make this initiative more urgent than ever."

Under the new policy change, the System Development Charges will no longer apply to infill housing of five units or fewer. System Development Charges cover the cost of connecting new homes to water and sewer services.

System Development Charges will also not apply to housing developments of more than five units if the housing is funded with low-income housing tax credits or is built by a non-profit.

The Sewer Lateral Reimbursement Program will offer up to $20,000 for qualified costs of connecting sewers to new low- and moderate-income housing.

Reimbursement can be used to cover the cost of the entire sewer lateral but can also cover materials, labor, traffic control, and work on pavement, sidewalks, and curbs related to sewer work.

“These changes will encourage new homes to be built on vacant lots that will connect to existing water and sewer infrastructure,” said Public Works Director Eric Horvath. “This will lessen the burden of building new water and sewer to support developments in undeveloped areas around the City.”

The Common Council will begin hearing the ordinance with changes to the System Development Charges on June 27.

The Board of Public Works will discuss the reimbursement program after the Common Council passes those changes.

Changes to both are expected to be active by mid-July.