Mayor proposes new housing stimulus plan
To try to spur new home buying and building, the mayor proposed a new program Thursday that would give out $1,000 grants to people who buy new homes.
His home ownership stimulus package would dole out $610,000 in grants to encourage new home buying and building.
Home building in Lincoln has been in a slump since 2003. Last year, new home permits were at their lowest number since 1986, and this year is on track to be even worse. Lincoln had a glut of 326 new homes on the market as of last week.
“That’s not good for the economy,” said Fred Hoke, government affairs director for the Home Builders Association of Lincoln. “It is very rough. We’ve got some (builders) building outside the city and state. We’ve got people who are building out in Colorado or down in Kansas.”
Beutler said housing slumps also create a decline in construction jobs, home loans and taxable sales.
Although the details haven’t been worked out, he envisions giving grants of at least $1,000 per single-family home. Beutler said the money could be used to help with closing costs, moving expenses or furnishings.
“The idea is to get that money pumped back into our local economy,” he said.
The stimulus package will be part of his 2008-2009 budget proposal, which will be unveiled in about a week.
Asked whether $1,000 is enough to entice people to buy a new house, Hoke and Beutler said that figure may be increased.
“It’s not a huge amount of money, but it’s a mental thing,” Hoke said.
To pay for the stimulus package, he wants to essentially use $610,000 in unspent interest on the $10 million stormwater bond issue voters approved in 2005. He proposes to shift the $610,000 into the fund out of which the city pays off general obligation bonds, freeing up general fund dollars for his program.
He’s likely proposing that money shift because in March the City Council balked at using the stormwater dollars to pay for arena studies. Several council members felt it inappropriate to use the money for anything but the stormwater projects voters approved.
Normally, the interest would be used for stormwater projects or to make payments on the bonds.
The City Council must sign off on Beutler’s budget and the stimulus program. It looks like the housing plan will get a mixed reception from the council.
Councilwoman Robin Eschliman said she’s supportive as long as the city can cover its general fund obligations and doesn’t have to raise taxes to balance the budget.
But the housing stimulus package was not embraced by Councilman Ken Svoboda, who has historically been a friend of home builders. While he thinks the concept is worth exploring, he’s not sure $1,000 would be enough to persuade people to buy a house.
However, he said, it’s a tough sell when Beutler also is proposing to lay off employees and make painful budget cuts. Beutler has proposed cutting 45 city positions and a half million dollars from the bus budget.
Svoboda said he’s encountering a lot of anger that Beutler is proposing “drastic” budget cuts while finding new pots of money for his pet projects. Beutler recently proposed to empty most of a little-noticed $10 million pot of money called the Special Assessment Revolving Fund to create a sort of economic development kitty.
Svoboda said people don’t like to see the city use “supposed newfound money” while making severe budget cuts and considering a tax increase. Rather than spend the extra money on a new program or fund, they say it should be used to mow parks or refurbish buildings.
But Beutler wants to end the city habit of using one-time revenue to pay for ongoing needs, because the need is still there when the money runs out. Svoboda said he agrees with that principle, but the city has a lot of unmet one-time needs and he doesn’t want to see that $10 million pot “piddled away.”
He also doesn’t rule out the possibility of tapping into the pot to bridge the remaining $1.5 million budget gap Beutler has said remains.
“I’d find it very difficult to go back to our city employees and say, ‘Sorry, though we have $600,000 that we’re gonna give to first-time home buyers, you’re gonna lose your job,’” Svoboda said. “I think it’s gonna be hard to give out pink slips when everybody knows that you’ve got a slush fund sitting there.”
But Beutler reiterated his position, saying, “While one-time funds cannot solve our day-to-day budget problems, they can help us seize opportunities like the proposals I offer today so we can invest in our community and our future.”
Reach Deena Winter at 473-2642 or dwinter@journalstar.com.
His home ownership stimulus package would dole out $610,000 in grants to encourage new home buying and building.
Home building in Lincoln has been in a slump since 2003. Last year, new home permits were at their lowest number since 1986, and this year is on track to be even worse. Lincoln had a glut of 326 new homes on the market as of last week.
“That’s not good for the economy,” said Fred Hoke, government affairs director for the Home Builders Association of Lincoln. “It is very rough. We’ve got some (builders) building outside the city and state. We’ve got people who are building out in Colorado or down in Kansas.”
Beutler said housing slumps also create a decline in construction jobs, home loans and taxable sales.
Although the details haven’t been worked out, he envisions giving grants of at least $1,000 per single-family home. Beutler said the money could be used to help with closing costs, moving expenses or furnishings.
“The idea is to get that money pumped back into our local economy,” he said.
The stimulus package will be part of his 2008-2009 budget proposal, which will be unveiled in about a week.
Asked whether $1,000 is enough to entice people to buy a new house, Hoke and Beutler said that figure may be increased.
“It’s not a huge amount of money, but it’s a mental thing,” Hoke said.
To pay for the stimulus package, he wants to essentially use $610,000 in unspent interest on the $10 million stormwater bond issue voters approved in 2005. He proposes to shift the $610,000 into the fund out of which the city pays off general obligation bonds, freeing up general fund dollars for his program.
He’s likely proposing that money shift because in March the City Council balked at using the stormwater dollars to pay for arena studies. Several council members felt it inappropriate to use the money for anything but the stormwater projects voters approved.
Normally, the interest would be used for stormwater projects or to make payments on the bonds.
The City Council must sign off on Beutler’s budget and the stimulus program. It looks like the housing plan will get a mixed reception from the council.
Councilwoman Robin Eschliman said she’s supportive as long as the city can cover its general fund obligations and doesn’t have to raise taxes to balance the budget.
But the housing stimulus package was not embraced by Councilman Ken Svoboda, who has historically been a friend of home builders. While he thinks the concept is worth exploring, he’s not sure $1,000 would be enough to persuade people to buy a house.
However, he said, it’s a tough sell when Beutler also is proposing to lay off employees and make painful budget cuts. Beutler has proposed cutting 45 city positions and a half million dollars from the bus budget.
Svoboda said he’s encountering a lot of anger that Beutler is proposing “drastic” budget cuts while finding new pots of money for his pet projects. Beutler recently proposed to empty most of a little-noticed $10 million pot of money called the Special Assessment Revolving Fund to create a sort of economic development kitty.
Svoboda said people don’t like to see the city use “supposed newfound money” while making severe budget cuts and considering a tax increase. Rather than spend the extra money on a new program or fund, they say it should be used to mow parks or refurbish buildings.
But Beutler wants to end the city habit of using one-time revenue to pay for ongoing needs, because the need is still there when the money runs out. Svoboda said he agrees with that principle, but the city has a lot of unmet one-time needs and he doesn’t want to see that $10 million pot “piddled away.”
He also doesn’t rule out the possibility of tapping into the pot to bridge the remaining $1.5 million budget gap Beutler has said remains.
“I’d find it very difficult to go back to our city employees and say, ‘Sorry, though we have $600,000 that we’re gonna give to first-time home buyers, you’re gonna lose your job,’” Svoboda said. “I think it’s gonna be hard to give out pink slips when everybody knows that you’ve got a slush fund sitting there.”
But Beutler reiterated his position, saying, “While one-time funds cannot solve our day-to-day budget problems, they can help us seize opportunities like the proposals I offer today so we can invest in our community and our future.”
Reach Deena Winter at 473-2642 or dwinter@journalstar.com.
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