Deena Winter: Homebuilder thinks stimulus would work
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Lincoln’s largest homebuilder thinks the mayor’s housing stimulus program just might work.
Duane Hartman, president of Hartland Homes, said if the city were to persuade 200 people to buy new homes with $3,000 grants, by his estimates the city eventually would reap $1.4 million in return.
He recently wrote to city officials in support of the mayor’s idea, which is on shaky ground with the City Council.
Earlier this year, Hartman called the local home building market among the worst he’s seen, and laid off employees for the first time in his 23-year history here.
He told the council his sales revenue dropped by $14 million from 2004 to 2007 — and said that ripples through Lincoln’s economy, reducing sales and property tax revenue, building permits, impact fees and so on.
He doesn’t believe Lincoln is overbuilt, but thinks housing woes in other parts of the country have hurt consumer confidence here and caused “pent-up demand for housing” here.
He thinks the mayor’s stimulus — grants of $1,000 or more to people who buy new homes — would help push some people to buy, particularly homes under $200,000.
“It could help change the mindset of others because the activity creates an atmosphere of ‘Now is a good time to buy,’ ” Hartman wrote.
However, he thinks the grants would have to be about $3,000 to push people over the edge and buy homes.
“I think $3,000 would definitely make some people go,” he told the Journal Star.
The City Council has been lukewarm to the concept, however, suggesting it’s interested in some kind of economic shot in the arm, but perhaps not Mayor Chris Beutler’s exact plan.
Looking for1929 issue of National Republic?
Lincoln’s libraries are selling a whole pile of magazines this summer.
Decades’ worth of old, rarely used magazines are being sold. At the last sale, you could get your hands on a 1993 issue of Russian Life, or a 1985 edition of PETA News, or a 1968 issue of Psychology Today.
Yes, you missed out on buying every issue of the New York Times Magazine from 1960 through 1987 — someone snatched that up for $100.
Or every copy of Nipponia from 1997 to 2006 — which someone paid $5 for. (It’s a Japanese thing.)
The libraries sold off some magazines last month and earlier this month and have other sales scheduled for Aug. 11-15 and Sept. 15-19.
The next sale promises periodicals with titles from T to Z (very library-like).
Library Director Carol Connor said while it’s considered “sacrilege” among some to sell off such inventory, the libraries could make better use of the space the magazines take up.
Unlike an academic or research library, most public libraries don’t maintain archives for research purposes, Connor said. And these days, many people can get the information online, so the old magazines are used less often.
“Many of our library customers are interested in current, popular magazines,” she said. “The use of library materials tends to change over time and this is one example of it.”
The highest bid in the June sale proves that: issues of Mademoiselle from 1953 to 2001 fetched $375.
The magazines are available for inspection from 1 to 4 p.m. the week of the sale in the fourth floor conference room at Bennett Martin Public Library. Bids are accepted at all libraries, or by mail or via the library’s Web site. For more information, go to www.lincolnlibraries.org.
ITI due a rebate
Last week’s city budget news included a curious tidbit.
Beutler’s office mentioned that part of the $6.4 million economic development fund the mayor wants to create would be tapped to reimburse Information Technology Inc. $235,000 in impact fees.
The city charges impact fees on new construction to help offset the cost to provide city infrastructure, such as streets.
ITI, a homegrown banking software company in southwest Lincoln, will get a rebate thanks to an ordinance passed in late 2004.
The ordinance allows the city to refund arterial street impact fees if the project meets certain economic development criteria. A formula determines when they can get the rebate.
In order to qualify for such a rebate, the project must:
* Pay wages equal to at least 110 percent of the median wage in Lancaster County. Currently, that means jobs will have to pay about $33,300 annually.
* At least 50 percent of revenue must come from outside Lancaster County.
Mayoral aide discussed
The City Council is quite interested in one particular mayoral aide: Jon Carlson, who was hired this spring to help revitalize the city core.
In budget meetings, Councilman Ken Svoboda has questioned why Carlson is the only mayoral aide of four who is funded through the police department.
Svoboda said Tuesday he’s considering trying to move the position into the mayor’s office during budget votes and is seriously considering whether the position is “worth keeping” at all during a tight budget.
He’d rather use police dollars for police officers.
If the position stays in the budget, he said he’d prefer to at least see it funded by the mayor’s office — which, he notes, has never had so many aides to his knowledge.
And on Monday, Councilman John Spatz said he wants to look into the way Carlson’s position is funded. He said it’s his understanding that at one time, the plan was for the position to be partly funded by an outside agency.
He said he’s considering a proposal to change the funding for the position.
He said it
“We’re keeping our nose above the water, but I don’t want to drown.” — City Attorney John Hendry, former chief justice of the Nebraska Supreme Court, making his case before the City Council that his office is seriously understaffed.
Reach Deena Winter at 473-2642 or dwinter@journalstar.com.
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Hal wrote on July 23, 2008 2:28 am:
jeanette wrote on July 23, 2008 4:41 am:
I, at on time worked for a home builder and I do not think the light weight construction of these new homes will with stand a leaky dishwasher onto particle board floors and particle board floor joists. Vinyl framed windows cannot be repaired if the glass is broken, it must be replaced. Vinyl siding melts in fires and gets holes in hail. My home has solid wood floor joists, metal window frames and a brick exterior. But it is just a used home. That I bought and paid for with no help from the city of Lincoln taxpayers. It is only a matter of time before insurance rates for these lightly constructed homes have a higher insurance rate than older homes because of the collateral damage when a fire, flood or storm happens.
SO WHERE IS THIS MONEY THAT REALLY BELONGS TO THE TAX PAYERS OF LINCOLN GOING TO BE SPENT? To bail out home builders with too much stock or to benefit all the citizens of Lincoln as a community?
This is not the first time that Hartman has laid off employees per Lincoln Journal Star (check the archives).He and others can negotiate lowering the price of the houses he builds and call it a stimulus.
It is time to let business people sink or swim on their own with the viability of their product. These hard economic times can be a culling out of house builders that needs to happen evey so often.
JUST SAY NO TO BAILING OUT HOUSE BUILDERS. IF BUYERS NEED A STIMULUS FROM THE TAXPAYERS TO BUY A HOUSE, THEY CANNOT AFFORD TO MAKE THE PURCHASE AND SHOULD STAY WHERE THEY CURRENTLY LIVE. "
Aaron wrote on July 23, 2008 6:50 am:
Why wrote on July 23, 2008 7:08 am:
DR wrote on July 23, 2008 7:10 am:
russell wrote on July 23, 2008 7:41 am:
Bill wrote on July 23, 2008 7:48 am:
Ill bet you would wrote on July 23, 2008 7:52 am:
Wow wrote on July 23, 2008 9:05 am:
Better idea for k rebates wrote on July 23, 2008 9:08 am:
I scream for Ice Cream wrote on July 23, 2008 9:20 am:
Better Idea wrote on July 23, 2008 10:08 am:
Red wrote on July 23, 2008 11:11 am:
Hey wrote on July 23, 2008 11:50 am:
Alan wrote on July 23, 2008 12:10 pm:
Economics wrote on July 23, 2008 1:21 pm:
Lincoln does have too many homes. Otherwise prices wouldn’t be falling and Lincoln’s foreclosure rate wouldn’t be as high. Near as I can tell from the city’s Register of Deeds, Lincoln is averaging around 14 foreclosures per week. And year to date the number of Notices of Defaults has increased 33% over last year at this time.
Homebuilders need a new business plan. Rehab existing home! The city should use the money to TEAR DOWN HOUSES WITH LIVABILITY ISSUES. We don’t need more housing until the demand and supply equalize and the prices have been allowed to get back to where they were before. "
Siding Fan wrote on July 23, 2008 1:48 pm:
god bless america wrote on July 23, 2008 2:29 pm:
dewboy wrote on July 23, 2008 3:43 pm:
Honesty best policy wrote on July 23, 2008 4:09 pm:
The soak it to the rich crowd got their way and the cities real eatste market tanked here before anywhere else in the country as that didn't happen until 2007.
What the Neighborhood Alliance and Mayor Wesley did in thier zeal to play class warfare was to hurt local foundation layers,framers,roofers,drywallers,electricians,plumbers,heavy equiptment operators,contractors,painters,sod layers,sprinkler installers,tilesetters,deck&patio installers,home security installers,fence installers,carpetlayers,bricklayers,window installers,concrete workers and truck drivers,construction site cleanup personal,real estate,loan & mortgage writers,landscapers,heating and airconditioning installers,home furnishing,furniture sales people,window coverings sales people and installers,pool and spa sales and installers, and last and not least the loss of these "not" built homes results in no property collection to the city over the next 75 to 100 years. So it shouldn't come as a suprise to our current Mayor as to why sales tax's have also decrease since 2004.Yes the "soak" the rich crowd have been so secussful that it should be promoted to the national level by voting for more democrats to the House and Senate and we MUST have Obama as he want to really be secussful and really SOAK the RICH because he can.
Just admit impact fee's have been a HUGE FAIL eliminate them and let's move forward with expanding our city and be glad that despite it's self people still want to live here.
If you folks think that impact fees have stopped urban sprawl then get in your car and drive in any direction and you'll get a better picture.When you get home ask yourself....why didn't they build those houses in Lincoln instead. "
Shane wrote on July 23, 2008 5:12 pm:
The fact is that impact fees were established because developers wanted the city to pay for THEIR infrastructure. My parents bought a home in the 50s and they payed for their infrastructure up front and now they are being asked to pay for the infrastructure for the new areas. 4400 hundered dollars more for a 200,000 thousand dollar house is NOT a burden. Perhaps what REALLY slowed down the market was 70,000 dollar lots. The developers were NOT willing to build the infrastructure out of their profits and wanted the city to pay. The city CAN'T afford to pay and so if, rightfully, falls to the person who will benefit from the infrastructure.
I swear if the Mayor offered up 1,000 dollar rebates to all homes in Lincoln, Ken Svoboda would find some reason the mayor was wrong. Ken, YOU LOST THE ELECTION........GET OVER IT. Or if you are determined to spend the next 3 years preparing to run against the Mayor again, give up you council seat so you don't screw up the city while you are making your run!!!! I am not going to show my cuts to the budget because I might want to change my mind like the mayor did??? Very adult thought process. The Mayor HAS the budet balanced with one-time money and you STILL want to cut. (Or at least you say you do as you have offered NOTHING yet) Cutting just to expouse a philosophy is idiotic. "
Honestly Honesty best policy... wrote on July 23, 2008 5:20 pm:
sallie wrote on July 23, 2008 5:40 pm:
If you talk to HBAL, 50% of their people do renovations and not just new building. If that has slowed - it's the economy, silly. Pushing people into bigger, better, newer, suburban dream houses that they can't afford is the problem, nationally and locally. Our parents bought small and moved up. Instant gratification, with or without jacuzzis and triple car garages, is the problem now. And we're all going to see the magic pyramid of mortgages, overconsumption and I-want-it-all-and-deserve-it-now tumble. "
Chris wrote on July 23, 2008 6:12 pm:
Second, the city should not be enticing new homes to be built on the fringe of the city when demand is dropping, and infrastructure costs are bankrupting the city.
Third, you are the LAST person anyone should believe when asking about whether the city is overbuilt. It is overbuilt. Home prices/rental prices in the city center have been falling and vacancy rates are up. I don't know how else you can interpret these findings.
Fourth, as we are beginning to realize, low density urban sprawl development is too expensive and DOES NOT pay for itself. It is too expensive for the city to provide infrastructure and transportation costs make it too expensive for most low income households (read hartland home-buyers). So now we should subsidize such development even more? I think not.
Fifth, I'm sorry you had to lay off workers, Mr. Hartman, and I am sorry to those workers who were laid off. However, that is not sufficient reason to indebt the citizens of our city chasing after a failed policy. "
Mrs. Johnson wrote on July 23, 2008 6:40 pm:
I agree wrote on July 23, 2008 7:33 pm:
Impact Fees wrote on July 23, 2008 8:30 pm:
George wrote on July 23, 2008 9:35 pm:
Mike wrote on July 23, 2008 9:56 pm:
UNBELIEVABLE wrote on July 24, 2008 8:34 am:
Mr. Hartman, please take a drive around Lincoln and notice the "for sale, for rent, for lease, rent-to-own, etc." signs in each and every neighborhood in this City. Lincoln is overbuilt. $3000 would help your business, probably, but why should taxpayers subsidize overbuilding? Why should we give $3000 to people get a brand new Hartman Home in an area of Lincoln where taxpayers not only get to give them $3000 but also get to pay for new infrastructure and schools.
Business is cyclical in most cases. You had your day (a loss of $14 Million, what were your gains in the good years?) Now it is your turn to go through the down cycle. The astute business person smoothes out the cycles by preparing for the downturns, not asking the City to subsidize their business. Who thinks this is a good idea?
I will be contacting the City Council and urging them not to spend any of my money on such frivolous expenditures. "
Not a fan but remember wrote on July 24, 2008 10:06 am:
Outside the Box wrote on July 24, 2008 10:54 am:
JR wrote on July 25, 2008 2:10 pm:
I am sorry for the employees of Hartland Homes that were laid off, but Duane’s trying to get “mileage” out of the announcement to the media was appalling. Saying he could no longer avoid the layoffs, but wouldn’t disclose the number of employees let go. I guess that a media announcement of who he really laid off wouldn’t really carry the impact he was looking for. Instead he chooses to offer his help to the city, by suggesting the tax payers help to sell his homes “for the good of the city”! If “Lincoln’s largest home builder” is struggling, then the city should listen to his warning and act before they face bigger troubles.
Builders who have focused on Quality, Integrity and Ethics are still in business, and will be after this turbulent economic time is over. Tough economic times you will see natural selection weed out the bad ones in any market. This is just a reality of the economy WE all have to live with right now and WE all have to make changes to get by and Hartland homes is no different. They seems to have spent enough time figuring out how to cut corners to increase profits they now build homes without corners, maybe it’s time to rethink some business practices. I think Duane Hartman as a person is an ok guy, but as a business owner and builder he seems to have a “me and mine” mentality toward increasing profits and a what can you do for me attitude. Not an ideal model for success in any area of life, but that is just my opinion.
While I am not an economist This housing stimulus plan is not in the best interest of anyone but a few builders looking for some free help. The housing market along with the rest of the economy will correct it’s self in time, and builders, just like the rest of us will have to wait and do their best to get through it. Poor planning and management of a few builders is not “our” or the cities problem.
If you really want to spend that $610,000 to stimulate something then send every registered automobile in the city limits a stimulus gas card! And don’t listen to a builder whose reputation appears to have caught up to him. "