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Mayor proposes new housing stimulus plan

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BY DEENA WINTER / Lincoln Journal Star

Thursday, Jun 26, 2008 - 07:23:52 pm CDT

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.

Story Photo
Mayor Chris Beutler
Mayor pushes one-stop development shop

The mayor’s budget will include startup costs for a one-stop development shop, so to speak.

Instead of having to traipse around to different city departments for plan reviews, permitting and inspections, people could get it all done in one office.

Mayor Chris Beutler said studies show delays in permits cost millions in lost revenue, and a one-stop shop would improve service, efficiency and coordination.

Longtime Lincoln architect Larry Chilese said he’s excited about the idea.

“I love what I’m hearing,” he said. “I’m just tickled pink.”

Longtime home builder Jim Christo said although the permitting process has improved, the process is still cumbersome and it’s refreshing to hear streamlining may be coming.

Beutler did not have exact figures yet on the cost of creating such a center.

“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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Tony wrote on June 26, 2008 10:57 am:
" Good job Mayor. "

 lisa wrote on June 26, 2008 11:27 am:
" So let me understand this? We have no money so we intend to raise taxes, but we have $8 Million in a Special Assesment Fund. Does this seen right? "

 George wrote on June 26, 2008 11:57 am:
" Mr. Beutler I have been a fan of yours to date, but this homebuilder stimulus package is one the worst ideas I have ever heard. Anyone who knows anything about economics and public policy should be telling you this is a bad idea. By coming out and saying this all I heard was I, Chris Beutler, am a puppet for big land developers and wealthy home builders. "

 Outside the Box wrote on June 26, 2008 12:18 pm:
" On first read, the Mayor is half right. Combining services in a "one-stop shop" is a win for taxpayers and those who use the services.

However, the mayor's office has been a proponent of redeveloping and revitalizing the "core" neighborhoods. Now, the mayor is proposing perks for building new houses. Call me crazy, but I doubt many builders and prosepctive buyers are going to take the time and effort to redevelop core properties when they can build on farm land north, south, east, or west of Lincoln.

Instead of contributing to urban sprawl, I wish the Mayor would extent his home ownership stimulus to ALL houses, not just new ones. "

 So wrote on June 26, 2008 12:23 pm:
" Not so fast here Mr. Mayor. You will be doing What? "

 Chris wrote on June 26, 2008 12:26 pm:
" I'd like any tax/subsidy incentives for housing to be spent on high density housing projects in redevelopment areas of central Lincoln. There will be demand for this type of housing in the next few years as more and more people get out of their cars. This type of housing also doesn't require huge investments in infrastructure to service fringe development, and also utilizes under-attended schools that are now being closed only build expensive new ones in suburban areas. I think the harsh reality is that Americans will no longer be able to afford the suburban lifestyle in the coming decades, so we better plan for it now. "

 ex-Lincolnite wrote on June 26, 2008 12:42 pm:
" Hi Lincoln, yet another reason why the family and I moved out of Lincoln. Life is good outside of the capitols shadow. "

 ugh wrote on June 26, 2008 12:45 pm:
" The one stop is a good idea but a stimulus towards for-profit developers to build in the burbs needing roads and other infrastructure we can't build or maintain for people who won't be able to afford the commute in their SUVs is dreadful. Good grief. I'm disappointed. With our current budget situation and the energy crisis, we should be condensing our people not encouraging them to spread out. Why doesn't this town get it? "

 tww wrote on June 26, 2008 12:51 pm:
" Instead of giving homebuyers $1,000, why not do away with the Impact Fees which total more than $1,000 "

 WHAT wrote on June 26, 2008 12:58 pm:
" WHAT? WHAT? Nobody sure in hell didn't help me scrimp and save to buy
my house???? We can't balance the budget but we sure have money for the
rich to get richer!!!!! If my house wasn't OVER ASSESSED and OVER TAXED
that might be different. What happened to each person WORKING and building a life like I have had to do ALL BY MYSELF!!!! Why do you have
to GIVE stimulus to home buyers and builders. Ever hear of getting JOBS
for people to work and SUPPORT THEMSELVES, instead of handouts to your
friends while depleting the savings of people who have worked hard all
their lives to get a house with NO HELP FROM THIS CITY!!!!!! THIS IS
ABOOUT THE LAST STRAW! Typical Democrat, spend spend spend and rake it
out of the ones who worked their tails off all their lives. Same ole
thing if you vote for Obama, just you wait!!!!! You think things are tuff
now, just you wait for Obama & the Democrat congress!!!!! "

 Wait wrote on June 26, 2008 1:41 pm:
" Didn't I vote for that money to be used on storm sewers not give aways for developers? No more votes for sewer bond issues here. "

 PortiaBelmont wrote on June 26, 2008 2:37 pm:
" This is the worst idea ever. In the first place, a $1,000 credit on a newly constructed home isn't enough to have a material impact on a decision to purchase. Those who were going to buy a new home are going to make their purchase with or without the $1,000. Those who weren't planning to buy a new home or who were planning on waiting for a more favorable economic climate won't be induced to make an immediate purchase for a mere $1,000. Come on now. One thousand dollars adds only $6.30 to a monthly mortgage payment (assuming 30-yr fixed at 6.5%). Who's going to be swayed one way or the other by a monthly difference of $6.30? The only way it might possibly make a difference is in the down-payment requirement or the total closing costs, and for that there are much better vehicles to assist buyers - ones that can be targeted to specific groups like veterans or first-time home owners - than a blanket $1,000 credit.

Furthermore, now is not the time to be encouraging development sprawl. We shouldn't be encouraging developers to continue turning farmland into residential neighborhoods at a time of rising food costs, and we certainly shouldn't be encouraging home buyers to move further from their places of employment at a time of skyrocketing energy costs. New residential developments in outlying areas are the last thing needed in the current economic climate. Over the long term, they are simply not sustainable.

If development incentives are going to be passed out, why not provide real estate tax credits, or at least a moratorium on valuation increases, for major improvements to existing homes? Or how about providing credits for infill development of single-family homes in older neighborhoods? Or what about using eminent domain to assemble large parcels - like the area immediately south of the State Capitol - for redevelopment into new urban housing? Those are ideas that have seen positive results and true economic revitalization in places like Portland, OR, Oakland, CA, Madison, WI, Chicago, Il, Phoenix, AZ, Seattle, WA, and the list goes on.

Honestly, if one needed any more proof that Lincoln is owned and operated by the real estate development community and the two (now really just one) big real estate brokerage firms in town, one need look no further than this absurd proposal, which I have now doubt will pass given the makeup of the City Council. "

 Tammy wrote on June 26, 2008 3:16 pm:
" So, we don't have the money to continue to service our parks, and we need to cut personnel...but we have the money to give away 1000 bucks to people or developers who build/buy NEW houses? And to create a whole new city department? Makes no sense to me. If you're going to allocate funds for other purposes then what they are intended, then maybe the FIRST order of business should be being able to pay for existing things, not adding new ones that will require more funding (that we don't have) in the future. Continuing to advocate and promote urban sprawl will not serve us well in the future. If you're going to give people money for buying a house,then give it to those people who commit to houses in areas such as the near south and other declining neighborhoods. NOT for new McMansions. The new housing market will either rebound or not based on the economy...we don't need to subsidize it. People who can afford to build a brand new house don't NEED 1000 extra bucks. "

 Ted wrote on June 26, 2008 3:34 pm:
" Let's see there is a glut of houses on the market that people cant' sell, so the mayor wants to subsidize building MORE houses? I don't have a house and would love to see home prices tank as low as possible so I might be able to afford one. Stupid policy mayor but go for it. "

 confused wrote on June 26, 2008 3:45 pm:
" I don't get it. On a regular basis our Mayor is telling us how broke the city is and how all departments need to be cut then the next day he has found another "hidden pot of money" and wants to invest in an ice rink, convention center, downtown park and home buying incentives ! All of which are going to add to city services that we can't maintain now. I fail to see how a $1,000 rebate to home buyer or builder is going to be a deal maker. If you can't afford to purchase a home a $1,000 to "pump back into the economy" is not going to be a blessing for the city, home buyer or builder. It seems to me that offering incentive packages for new home buyers / builders is only going to put a bigger strain on the city by requiring new roads, sewer and city services. If the intent is to put the money back into the economy you might as well stand on the steps of city hall and throw 100 bills out. At least that way you're not putting an additional strain on city services that we are being told now that we can not maintain. "

 Raised Out West Living in Lincoln wrote on June 26, 2008 4:16 pm:
" Generally I've always been a Beutler fan but I do agree with others that I think he is off the mark with this proposal. I would feel better if his adiminstration would elaborate more about how this subsidy could work towards families who are renovating older homes like in the 'Core.' It seems to me that Mayor Beutler is trying to please LIBA rather than do the gutsy move and increase property taxes for services such as law enforcement, fire and rescue and parks. I know we are in a tough budget cycle but giving money from the city public works department out to "new" home owners leaves a sour taste in my mouth.

I'm disappointed but not shocked because I know he made the decision he thought was best. It wouldn't have been mine but when you are the mayor of a city such as Lincoln, you can't always expect to please everyone. "

 Agatha wrote on June 26, 2008 5:00 pm:
" The one-stop shop for review and permits would be a good idea. If fact, I don't think it is a new idea.

However, I don't want funds given to developers to build new, empty houses. The funds were meant for infrastructure and they should be used for repairing the streets, storm drains, etc. I have little sympathy for developers when established buildings and homes sit empty now. The developers should be working on affordable, decent housing within the city or renovating buildings to meet the needs of consumers.

Yesterday, the mayor said the city couldn't help take care of our children. Today, he wants to help the developers. What will it be tomorrow? "

 Bait and Switch wrote on June 26, 2008 5:00 pm:
" For the high denisity faction I would like to know how given Lincoln's lack of a traffic flow system you are going to evacuate all those living in Lincoln's core.Travel to DT before,during and after a NU football game and ask yourself how would you get emergency, heavy machinery into a duasaster zone while getting people out.What Lincoln has already created is a diasaster waiting to happen and you with your petty social-economic envies want to add more.
You might also want to look at where home building has occured before whailing about urbal sprawl.The effect of the impact fee has pushed new home building OUTSIDE of the cities limets thus excalibrating your much feared urbal sprawl.
As far as this mayors idea for economic development goes he would be further ahead if he would commit the city to building a crosstown freeway/expressway system instead of trying to further line the pockets of the Scott twins and his political contributors.
He also promised while running for office was going to streamline permitting process so why do we now need to fund MORE city workers to do that? Why not just reassign city workers already on the payroll?
This is another democrat government expansion idea to increase union membership,government growth,and thus money flowing back to the democratic party.In short another failuar for the taxpayer!!! "

 Phil wrote on June 26, 2008 5:04 pm:
" This is utterly ridiculus. I demand a complete top to bottom audit off all city departments, account, etc. How in hell is it possible for this city to keep "finding" money it didn't know it had. Heads in the accounting department need to roll right now. How is it possible to believe anything about any dollar amount that comes out of the mayor's mouth when in the last two weeks very large "previously unkown" sums of money are found. This have to stop. Who, amound the taxpayers of lincoln, is suprised that the city kept extra money from a bond fund or kept the proceeds from a special assesment long after the project or need for the tax was gone? I too, will not vote for any type of bonds untill my faith in the city's accounting is restored. A residence outside of Lancaster county looks better and better every day. "

 Doesnt make sense wrote on June 26, 2008 5:07 pm:
" Didn't I just see an article in yesterday's paper about how the city is cutting funding for the CLCs at public schools at an amount of about $160,000? Yet he can free up $610,000 for Lincoln's growth? Where are your priorities Mr. Mayor? "

 Pointless wrote on June 27, 2008 6:53 am:
" Why are we even talking about this? We all know that it is a pointless idea. If we are going to use the money, why not give it to the CLCs or save a few city jobs from being cut. It is totally absurd that the mayor and city council are even entertaining this idea. "

 Extra money wrote on June 27, 2008 7:13 am:
" Mr Mayor - do you know what else we could do with the money to spur the economy? We could give everyone in Lincoln $2.50. Keep up the "great" work. "

 Bad idea wrote on June 27, 2008 7:28 am:
" Everyone, including builders themselves, knows that construction is cyclical. Smart builders save during good times to make it through the bad. It is counterproductive to give people money to build new houses when the housing market is saturated, and when there is a good supply of homes on the market that are less than 10 years old. Add to that the uncertainty about fuel prices and other energy costs, and you may see people spending money to, first, move closer to work and, second, buy smaller, more energy-efficient homes. Both will benefit older neighborhoods and produce less blight in the long run. "

 Anne wrote on June 27, 2008 8:04 am:
" Let's include single family homes in the heart of the city. There are many homes already built for sale that $1000 stipend could make a difference for purchase by remodeling and updating needs.

If to be used for newly built homes, have a cap on price of home. Make sure its going towards a first time home buyer (that needs it) and not some McMansion or new development contractor. Lincoln has an abundance of new developments with too high of price tags for young, first time buyers.

We all can't afford $300,000 plus homes. "

 Todd wrote on June 27, 2008 8:32 am:
" Why does this money have to be only for new housing. Why not use some it in the cities core neighborhoods. Beutler has said in the past that something needs to be done to revitalize the near south and everret neighberhoods. "

 H B wrote on June 27, 2008 8:48 am:
" This proposal makes very little sense. At a time when Antelope Valley has used up raod funds and there is no funds for arterial street rehabilitation, no funds are available for sidewalk repair and parks and right-of-ways go unmowed, how do you justify expending over $600,000 on rebates for new home ownership. This will continue to create neighborhoods where the street infrastructure is not available.

There is no indication in the Mayor's proposal to meet the needs of the existing neighborhoods and community as a whole. It will only create additional infrastructure such as streets, parks and sidewalk which will not be funded for repair or upkeep.

This smacks of an attempt to buy support from LIBA and the homebuilders "

 Big picture wrote on June 27, 2008 8:57 am:
" If you want to help builders and buyers, how about lower impact fees. If you want to encourage growth, how about making Lincoln more appealing. Let's see, perhaps encouraging a year round revenue producer for the City. Making the flow of needed permits etc., for the growth of new business in Lincoln is great, but don't we have the ability to do that with the current departments. Why add another layer? Make it easier for business to come into Lincoln. This will encourage growth.
As for 8 million, the City has several areas of obligation which have gone without enhancements for sometime.
The economy, (global, nationally, locally,) is going to give us a bumpy ride and there is nothing City government can do about it and certainly nothing that $1000 is really going to impact. Put the money to better use. "

 Its the Economy stupid wrote on June 27, 2008 10:29 am:
" The economy is lacking and property tax is way high in Lincoln. So why should I not take two steps out of Lincoln to another county and buy a new house in Eagle that is affordable?? "

 one year boost to infrastructure wrote on June 27, 2008 11:47 am:
" It seems to me that this found money would be better used as a one time boost to the public works department for some of the street and sidewalk maintenance that has had to be deffered. As for "Bait and Switch", it's hardly fair to compare game day traffic to normal traffic. "

 Since when wrote on June 27, 2008 11:53 am:
" does being a proponent for smart growth make you a faction? Developers stay out of the core because it's hard. Land acquistion and demolotion can cause problems. But, the best way develop a city usually is hard. Taking the easy way out to build on the outskirts of town has contributed to the infrasture mess we're in now. I continue to be baffled at this community's lack of understanding. This money would be better spent on repairing existing infrastructure. "

 Rob wrote on June 27, 2008 1:26 pm:
" Did ANYONE read the article?

1. Once the "kitty" is dulled out to needed jobs and departments, then there is NO money left and in a couple years we'll be in the same predicament because there is no new money coming in.

2. Its for new homes because new homes require construction, which supplies jobs. How is this bad? I do agree, however, that it shouldn't be limited to new housing.

3. $1,000 isn't much, but he mentioned it could increase. At least it may be able to help with closing costs. Definitely an attractive bonus.

4. More home owners = more taxes = more revenue for the city of Lincoln.

While probably not the greatest idea the mayor has had simply saying he's "wasting money" and "pandering to the real-estate / construction group" is pretty narrow-sighted. Its an investment for Lincoln. "

 How many years left wrote on June 27, 2008 1:46 pm:
" Seriously Chris? What is this money going to do? Help buy patio furniture? See how Dems think they can "help" with taxes. I could think of at least 100 things that could need this money. If a $1000 is going to help someone make a final decision on buying a house then they should not be buying a home. I hope the people who voted for this guy are smiling. How about we give that money to the police dept so they can hire a couple more officers? Or maybe fix some of the horrid roads here? Or buy a one way ticket for Chris to the South Pole. C'mon mayor at least let someone else do your "work". "

 dewboy wrote on June 27, 2008 2:47 pm:
" My dear Mayor: This group you are trying to bail out with taxpayers money happens to be the same group so against IMPACT FEES. Now you want to help when the problem is they OVERBUILT. What scares me the most, is the fact that you actually sat in the Legislature and represented the City of Lincoln as a Legislature and a lobbyist for the City of Lincoln (a do nothing job with good pay) .Plus we have floodplain problems and that is the best you can do with storm-water money. YOU NEED HELP. "

 Realtor wrote on June 27, 2008 2:51 pm:
" Wouldn't lowering the $4,685 impact fee tax that each new construction homebuyer is charged at closing make more sense? This whole "stimulus" idea is nonsense - let's lower taxes instead of siphoning money through the government's hands, where it's more likely to become tainted. "

 Heres a thought.... wrote on June 27, 2008 2:56 pm:
" why don't we quit building new houses and strip malls in this town until the ones that are brand new AND empty are occupied!!!!
And Mayor Beutler - why on earth would you encourage/entice people by giving them $1,000 to buy a house when chances are they can't afford it anyways - next thing we are going to start hearing is that the foreclose rate is sky high!!!
Oh yeah, and Mayor - could you please spend the $610,000 of accrued interest on the roads in this town - they are RIDICULOUS!!!! "

 another suggestion wrote on June 27, 2008 4:32 pm:
" I think that the money would be better spent ON the bus budget, rather than cutting it. Public transportation needs to continue improving or it will lag behind even more severely when demand skyrockets in the next few years... especially if you keep luring all those people further and further away from their jobs. "

 warren wrote on June 28, 2008 2:43 am:
" Where is my $1000.00 incentive when I bought a home last year? Sounds like George Bush all over again. Bad idea. How about lower city propery taxes so people will be able to afford to live in Lincoln which in turn might lower home vacancies/inventory? No to more taxes! "

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