Re: Dems caused current problems

Evelyn Ruut wrote:

"George Z. Bush" <georgezbush@xxxxxxxxxxxxxxxxxx> wrote in message news:qHkLj.103$kw7.84@xxxxxxxxxxxxxxx
Islander wrote:
Thumper wrote:
On Wed, 9 Apr 2008 18:26:20 -0400, "Evelyn Ruut"
<evelyn.ruut@xxxxxxxxx> wrote:

"High Miles" <2Blues17@xxxxxxxxxxx> wrote in message
news:N9ednV93hK8rqWDanZ2dnUVZ_jadnZ2d@xxxxxxxxxxxxxx
Evelyn Ruut wrote:
> All very well and good to say, but disastrous in actual effect.
There ARE people out there who trust that the bank will only lend them
what they can afford to pay. Not me and maybe not you, but there are
many who are trusting in that way. The mortgage people were unethical
in taking advantage of them, even if they themselves should have known
better.

Those same slimy lenders who actively sought sub prime borrowers, because
they assumed property would always increase in value, are the very
same babies crying to the fed for a bail out now that their bubble has
burst.

I don't think tax payers can afford to come to the aid of big lenders and
dumb home buyers. It will have to be one or the other.
Quite a few of the defaults in a neighboring township were huge houses,
already in forecloser, that speculators bought with zip down, hoping to
make a tidy buck as the places went up in price.
Didn't happen.
But then............the saying is...............BUYER be ware.


I worked as a bookkeeper for a large developer for a while, and at a certain
point they stopped building normal size homes and went for these huge
McMansions. I said to myself "just WHO is going to buy these huge places?
Who can afford to heat them and pay the taxes on them?" All the builders
got on board with the trend and for the last 15 years that has been the
norm.

Now there is a glut on the market of those big homes, some in foreclosure
and some that people just haven't bought. The young people are buying
condos or renting apartments because there are so few reasonably priced
smaller homes out there, and besides that, salaries have not kept up with
the construction industry.

I recently advised a developer who is a friend that he needs to build small
starter style homes. My friends in real estate tell me that there
definitely is a market for that. Two or three bedroom, one and a half bath
houses. The kind most folks grew up in. THAT is what is going to be
selling, especially when we really start to feel the crunch in paying for
Bush's war.


The problem is Evelyn that the building lots in many areas of the
country are $200,000 and up. My developer friend says that he can
still build starter homes but they would cost $400,000 on the lots he
can get here. When you get in that range for him to make a decent
return on investment he'll build the $500,000 houses first. In my
little city there is hardly any lots available. I know that lots are
less in the heartland but on both coasts they are very expensive.
In the early 70's there was a HUD program that built little box
houses, some as little as 800 square feet that sold for around
$14,000. Those houses now sell for $180,000 and up.
In my city the prices haven't really dropped. In fact the median
price went up a few percent. It does take a lot longer to sell now
and there simply are no starter homes for sale. People don't move
out of them unless they have to.
Thumper

The time worn expression in real estate investing is, "Buy land, they
are not making any more of it!" Many communities have attempted to
limit density through zoning and the downside of this is that it
prevents development of higher density housing. Ultimately, we run out
of affordable land and if we are to build affordable homes, we need to
look beyond the house in the burbs model. We need to make better use of
the land that we have, building more densely and saving the open space
for everyone to enjoy.

In a perfect world, no one could argue with that logic. In the real world, however, what you've described is only the tip of the cost iceberg because the infrastructure to support all of that is hugely expensive and our conservative-minded brethren who'd be the beneficiaries of that development are usually reluctant to pay (gulp) taxes to buy such niceties. You understand where I'm going with that line of thought.....I'm sure I don't need to clarify any of it for you.

George Z.



There are so many payoffs and so much chicanery in the building business. Nuff said. The name of the game is maximize the profit and you have to pay someone somewhere in some form for that to happen. It doesn't take a lot of perks to overcome most public employees altruism. Each little concession is just a drop in the bucket anyway. Easy to overlook.

It would not kill town boards to REQUIRE a small park to be built for every so many homes. The developer would have to lose the profit on a couple of lots in order to do that. Then there is always an increase in school space, fire department coverage, water usage, sewage increase, police coverage, road maintenance.... when ever new homes are built. Towns are more inclined to approve 10 McMansions that pay higher taxes and use less of those services, than to put in a dense development of 30 smaller homes that will pay less taxes and use more town services.

Change only happens when it becomes so necessary and so obvious that it is really in our faces. The last sweeping social changes came when there were bread lines and nobody had work for years. The republicans forgot all about that and are still complaining about programs like Social Security which came about them.

I think there are tougher times ahead financially for us all. Someone is going to have to pay for Bush's war, and the trade deficit is growing more and more glaring. Unions are losing power and jobs are flowing out, rather than in, to this country. Our money is worth less at a time when we are buying more and more from outside.

We aren't top dog in anything much anymore, other than a few superstars like Bill Gates and various other internet tycoons. Times are changing. I don't know if another depression is on the way, but it sure looks like it. A lady friend of mine who was really smart in money matters, already had ALL her money OUT of American currency years ago. I thought she was nuts. She predicted a severe depression was coming, and at the time I thought her to be just a doomsday type who thought the sky was falling. Now I am not so sure.

Your conclusions about McMansions vs higher density development depend very much on your local ordinances. Developers, especially in today's real estate market, prefer to build higher density, more affordable homes. The economics are pretty simple. The infrastructure costs per unit are minimized in higher density construction. Likewise, both the actual construction costs and the longer term maintenance costs and energy costs are minimized in multi-unit housing. All other things being equal, the local government can benefit from higher density development. Unfortunately, all other things are not equal. There have been a number of studies done which show that residences (of any size) do not pay their share (by assessed value) of property taxes to support local infrastructure. Undeveloped land, farm land, forest land, and other open space pay at a reduced rate in many communities, but also require much less infrastructure to support them. Commercial property typically pays at a higher rate than residential to make up the difference, but that is not a bad exchange since commercial typically places higher peak demand on infrastructure.

Quite a few communities have taken measures to increase the availability of both affordable housing and increased open space. One technique that is used where there is opportunity for large scale development is the use of density bonuses, either in exchange for affordable housing and/or for open space. Some communities encourage cluster housing where the density is determined by the overall size of the property rather than the size of the individual lots.

There is a great example of how one community worked to solve these problems in the single remaining large property within the Boulder city limits. If you are interested, it is worth sending off for their free video. http://www.holidayneighborhood.com/

In the space of what was once a drive-in movie, there are now 300 housing units, small parks, a Habitat affordable housing section, commercial shops, a co-habitation project, and a variety of other housing. A good example of what is possible.

There are examples like this all across the US, but we need to get past the idea that everyone has to have a "status home" in the suburbs.
.

Relevant Pages

  • Re: Dems caused current problems
    ... I don't think tax payers can afford to come to the aid of big lenders ... point they stopped building normal size homes and went for these huge ... Who can afford to heat them and pay the taxes on them?" ... I recently advised a developer who is a friend that he needs to build ...
    (soc.retirement)
  • Re: Dems caused current problems
    ... what they can afford to pay. ... I worked as a bookkeeper for a large developer for a while, ... Who can afford to heat them and pay the taxes on them?" ... Now there is a glut on the market of those big homes, ...
    (soc.retirement)
  • Re: Dems caused current problems
    ... I don't think tax payers can afford to come to the aid of big ... point they stopped building normal size homes and went for these huge ... Who can afford to heat them and pay the taxes on them?" ... energy costs are minimized in multi-unit housing. ...
    (soc.retirement)
  • Re: OT: AARP
    ... If you made 40 bucks a week and rented for 10 bucks a week, ... with the percentage of your income that should be going to housing. ... but I only buy what I can afford each month. ... By buying homes they can't afford, ...
    (sci.med.transcription)
  • Re: OT: AARP
    ... I know housing prices are growing by leaps and bounds, but if young people would save money for a bigger down payment, their mortgages would be much smaller. ... Obviously no one wants to live in the worst part of town, but if they can't afford the best without going into unfathomable debt, they need to review what is available that they can afford. ... By buying homes they can't afford, they're the ones driving up the housing market for others. ...
    (sci.med.transcription)
Loading