Phoebe Loosinhouse
(1000+ posts)
Send PM |
Profile |
Ignore
|
Mon Mar-10-08 06:08 AM
Original message |
A Municipal Response to the Housing Crisis |
|
The next shoe to drop in the ongoing real estate crisis is the ripple effect on municipal budgets as vacancies cause a loss of property tax revenue.
Some city/town somewhere COULD take a proactive stance on this and try to make some lemonade. I think they should buy up some of the vacancies and turn them into affordable housing. They always seem willing to throw taxpayers dollars in to stadiums and private/ public high end projects - here's a chance for them to help people other than the high rollers.
How about a Homestead project? Sell the properties at a really good under- market price. The new owner would have to agree to stay for a minimum of five years or forfeit any appreciation due at time of sale. I think that the city/town should retain an equity share in the property regardless of when it is sold - say 30% of appreciation. This money is what then allows them to continue buying foreclosed properties as they pop-up on an ongoing and continual basis.
People qualify for the program by being residents of the city for at least 3 years and meeting some kind of income guideline.
If I were Empress of the Universe, this is what I would do.
|
rucky
(1000+ posts)
Send PM |
Profile |
Ignore
|
Mon Mar-10-08 06:18 AM
Response to Original message |
|
I've had some thoughts along the same lines. We're going to see quickly blighted neighborhoods in places other than South Florida soon enough.
I would consider focusing on renovation, with community banks buying properties and/or supplying gov't backed low-interest loans (refi w/ renovation escrow), and some subsidy to approved local renovators for materials costs for doing a job in a declining market.
|
thunder rising
(1000+ posts)
Send PM |
Profile |
Ignore
|
Mon Mar-10-08 06:20 AM
Response to Original message |
2. Two things: 1. There is no appreciation (house prices are falling)!! That's why the foreclosures |
|
Edited on Mon Mar-10-08 06:21 AM by thunder rising
Why would you sell affordable housing and retain "30% of appreciation", when if you sell or develop regular real estate there is no such penalty. Would this be considered a "poor man's tax?"
|
Phoebe Loosinhouse
(1000+ posts)
Send PM |
Profile |
Ignore
|
Mon Mar-10-08 06:28 AM
Response to Reply #2 |
3. Because the city subsidized the purchase in the first place! |
|
And it's true, there is a chance that there would be little to no appreciation in the short term, but I have to believe in the long term that the value will hold or go up. I am simply saying that is the way for the city to recoup their initial investment. I am still saying the Homestaeder gets 70% of appreciation - I think that's pretty darn good. Equity sharing is not a new or revolutionary concept. If it makes you feel good to torpedo an excellent program that would benefit the town, the neighborhood where the foreclosure is, and the buyer/owner by labelling it a as "poor man's tax" - go ahead. I hope your neighborhood isn't one that is soon going to be filled up with boarded-up eyesores. Do you have a better idea?
Talk about looking a gift horse in the mouth.
|
rucky
(1000+ posts)
Send PM |
Profile |
Ignore
|
Mon Mar-10-08 06:34 AM
Response to Reply #2 |
4. Why would banks put up the money, otherwise? |
|
Edited on Mon Mar-10-08 06:34 AM by rucky
The only other option I'd see from an investor's standpoint would be an ARM, or balloon, or something that would encourage a refi in under 5 years. That would be worse for the homeowner IMO.
|
thunder rising
(1000+ posts)
Send PM |
Profile |
Ignore
|
Mon Mar-10-08 06:36 AM
Response to Reply #4 |
5. We'er in a housing crisis!! No banks! No bonds! The poor would be better to just move into vacant |
rucky
(1000+ posts)
Send PM |
Profile |
Ignore
|
Mon Mar-10-08 06:44 AM
Response to Reply #5 |
6. Ok, let's walk through this... |
|
somebody's upside-down on their mortgage. Lender forecloses. City buys property at wholesale. And then what?
|
thunder rising
(1000+ posts)
Send PM |
Profile |
Ignore
|
Tue Mar-11-08 09:19 PM
Response to Reply #6 |
8. How about the bank keeps that house and the homeless just move in! |
Phoebe Loosinhouse
(1000+ posts)
Send PM |
Profile |
Ignore
|
Mon Mar-10-08 06:54 AM
Response to Reply #5 |
7. If there was a point in that post, I'm completely missing it. |
|
There IS a housing crisis whether you want to believe it or not. Affordability effects almost everyone since the price of housing has so outstripped any increase in wages and income.
These foreclosures are happening in all areas - lower, middle and high end neighborhoods will all see foreclosures. I'm not suggesting that cities buy up inhabitable crap - there is some very nice housing stock that will be and is sitting vacant. I would focus on the lower and middle ends since the whole point was to:
a. Provide affordable housing for those who are unable to do it privately.( And once credit has seized up entirely, there will be tons of people who previously would have been fine in the private sector who will be squeezed out of the mortgage market)
b. Remove the inherent risks that vacant housing encourages - vagrancy, arson, crime, vandalization, falling property values in affected neighborhoods, etc.
I can't believe that someone's first response is to label a program like this a "poor man's tax" and to be negative and naysay and put a weird negative slant on something that is supposed to be positive and hopeful.
Like I said, what's your better idea?
|
DU
AdBot (1000+ posts) |
Sat May 04th 2024, 02:48 AM
Response to Original message |