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Beutler's home stimulus plan laid out

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BY DEENA WINTER / Lincoln Journal Star

Monday, Aug 18, 2008 - 02:10:22 pm CDT

A home stimulus proposal was laid out for the Lincoln City Council during an informal meeting Monday, and the plan has been expanded to include existing homes, not just new houses.

The mayor wants to encourage people to buy and build homes by offering cash grants of $1,000 to $5,000 if they buy new homes worth up to $325,000 or existing homes worth up to $150,000.

Mayor Chris Beutler said that should be enough to “push someone off the fence” and he hopes the new provision for existing homes will “get these first-timers out of their apartments and into the housing market.”

Story Photo
Mayor Chris Beutler

Beutler had proposed a stimulus plan as part of his budget, but the council elected to deal with the idea separately.

In recent weeks, homebuilders and Realtors have helped the mayor revise his original proposal, and the two groups will contribute $100,000 to the program, in addition to the city’s $600,000.

The grants — paid to buyers after closing — would be offered on a first-come, first-served basis until the money runs out or in late March, whichever comes first.

* $5,000 for people who buy new homes worth up to $325,000.  The city would contribute up to $300,000 which, when combined with up to $60,000 contribution from the homebuilders and Realtors, would be enough for 72 homes.

* $2,000 for people who buy new homes worth up to $325,000 that have never been occupied by an owner (although they may have been rented). A total of $200,000 would be allocated, enough for about 100 homes.

* $1,000 for people who buy pre-owned homes worth up to $150,000, with $100,000 allocated, enough for 100 homes.

The program would apply to single-family homes or townhomes that will be owner-occupied. Proponents hope to have the program approved by the council and in place by October. The city’s funds would come from the $10 million Special Assessment Revolving Fund.

Beutler said his plan — combined with the federal stimulus plan and state affordable housing program — should help the housing market. Nick Cusick of IMSCORP helped put the proposal together, and said “We don’t want to get to the point where we’re a Phoenix or Las Vegas.”

He said the program wouldn’t just help builders and Realtors, but also construction companies, appliance stores, lumber yards, general contractors, plumbers and electricians.

And the stimulus checks can be used to buy anything — from cars to furnishings to landscaping.

Steve Stueck of Home Real Estate reminded the council that new home closings peaked in 2004, at 353, and dropped to a low this year of 135.

Housing starts through June were 246, compared to 327 last year and 479 in 2006. If the pace continues, this year will mark a 20-year low for permits, Stueck said.

The city has also seen fewer permits for additions or alterations, he said, and there are more than 2,400 houses for sale, compared to 885 a decade ago.

The program for existing homes should benefit the Near South, Everett, University Place  and other neighborhoods, Stueck said.

In fact, of 314 homes he found for sale in selected neighborhoods, more than half are vacant. That’s a lot of empty homes if the same holds true for the rest of the city.

“To me, that’s a scary situation,” Stueck said.

Councilman Ken Svoboda suggested lifting the cap on home price to allow more expensive homes to qualify for the stimulus money.

Though people who are building million-dollar homes are unlikely to be swayed by a $5,000 incentive, he said, the return to the city in sales and property taxes for such homes more than makes up for the cost.

Reach Deena Winter at 473-2642 or dwinter@journalstar.com.


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Alan wrote on August 18, 2008 2:23 pm:
" Sounds like a flat out subsidy to the home builders. Is this even legal? "
unbelievable wrote on August 18, 2008 2:28 pm:
" Ths is the most stupid thing that I have ever heard. Paying someone to buy a new house will only contribute to more old used houses being on an already glutted market! Secondly, mr mayor - what are you going to do for the apartment owners that will have a flood of vacancies due to your new program? What will you do for them if their apartments are not producing revenue and they cant pay the taxes or upkeep for the remaining tennants? THE CITY NEEDS TO STAY OUT OF THE REAL ESTATE BUSINESS! Remember what happened the last time urban development had a good idea? They bought a gas station at 48th & "O" for two times what it was worth, and now it is a weed pit. Will you pleae quit spending money on non needed projects and fix a street already?? If the realtor and builders commission wants to do this, let them spend all of their own money, until then, mr mayor, just do your job. "
NS wrote on August 18, 2008 2:31 pm:
" Of course Svoboda wants people buying expensive homes to get the incentive. Why not actually go the other way and allow more people who buy houses in say the $100,000 up to $150,000 range get the incentive instead. $1000 probably means a lot more to people who can afford houses in that price range than $5000 means to people who can purchase $350,000 homes. "
Mike wrote on August 18, 2008 2:32 pm:
" I'm not sure this is what city government should do. What about the other parts of the economy and business that is hurting? There are many other businesses in town that have nothing to do with building that could also use the help. I need a new car, is the city going to pay the sales taxes for me if I purchase one? "
ej wrote on August 18, 2008 2:48 pm:
" They don't call them housing booms for nothing. Just what exactly does he hope to accomplish besides wasteing 300,000 dollelrs? "
tom wrote on August 18, 2008 2:49 pm:
" This is ridiculous! If someone is even thinking of buying or building a home worth 325,000, they probably don't need any extra help. If you're a first time home owner trying to get out of an apartment, probably not going to buy that expensive of a home. Why not help out people with lower incomes that are trying to get a home established. "
Low income wrote on August 18, 2008 2:52 pm:
" I think that the cap should be lower, not higher. If you can afford to build or buy a home worth $325,000, it is hoped you can afford the cost without the city paying you to build or buy. And the incentive should be weighted toward existing homes. It makes no sense to keep promoting new homes if you have so many existing homes sitting vacant. "
Outside the Box wrote on August 18, 2008 3:05 pm:
" While the mayor earns points for expanding the program to existing homes, this is still a dumb plan.

The problem is not in a decrease in new buyers, it is in a lack of first time buyers moving into the previously owned homes vacated by those building new.

In the article, Steve Stueck of Home Real Estate found over 160 current homes sitting vacant in the "selected neighborhoods". I would guess that if the property owners were contacted, many of them built new and can't find anyone to buy their old home.

If this program is to continue, it needs to give equal weight to new and current homes. Also, the amount of rebate should be inversely related to the home price. If I can afford at $325,000 home, $5,000 is probably not going to change my mind. However, for somebody buying a $100,000 fixer-upper in Everett, $5,000 goes a long ways towards repairs and improvements. "
CONNIE wrote on August 18, 2008 3:17 pm:
" QUESTION? If a person can qualify for a $325,000.00 home, why do they need a stimulus check. "
Mr. T wrote on August 18, 2008 3:19 pm:
" Who's paying for the city's portion? That's right...I am. Too bad I moved into my home about 2 years ago. If people weren't so irresponsible, we wouldn't be in this "mess" anyway. "
Stop wrote on August 18, 2008 3:23 pm:
" Come on, stop trying to get people to buy things they can afford with money they don't have. If someone can't afford a house without the a city bribe of $1,000 - $5,000 then they shouldn't be buying it. They are only going to get in trouble down the road. I have a couple suggestions Mayor and Council - if you have money burning a hole in your pocket that you feel the need to get rid of. Either give it back to the citizens in the form of tax relief or fix the road and sidewalks you have been neglecting for years. As a tax payer I have no interest in supporting this plan. I paid for my house my self, so can everyone else. "
Beth F wrote on August 18, 2008 3:29 pm:
" This is silly idea, and just another example of payback. Check out the list of donors to the Citizens for Beutler campaign (nadc.nol.org). Home builders, realtors, realty investment & trust groups etc. . "
More of wrote on August 18, 2008 3:35 pm:
" good ole Chris doing uneeded things for the city. I ask you this Chris, when are you going to do something that helps the city as a whole? You could spend that money on low income housing for people who actually need a house. Or maybe some new equipment for schools or maybe some new stop lights with turn arrows. For the people who voted for this guy please be accountable. If you think someone who is buying a home up to $325,000 needs a stimulous check then you are naive beyond belief. Is this guy for real? Or is he getting a cut from the homebuilders? "
Whatever wrote on August 18, 2008 3:43 pm:
" Yah, apartment dwellers that are first time homebuyers are really in the $150K range. Riiiight. And people that can afford a $325K house certainly do not need a subsidy!! "
Ross wrote on August 18, 2008 3:48 pm:
" Don't forget one important point: the city collects more than it pays out. Between impact fees and sales tax the city makes money on the proposal and the taxpayer benefits. Add to it long-term property tax gains, employment gains and economic growth, it's a windfall for the city and the workers of Lincoln. "
no money wrote on August 18, 2008 3:51 pm:
" We don't have money for other things, but do for this? Why not fund what we need instead of helping those "on the fence" to spend $325 K for a new home. Help those out who need it. Ridiculous. "
deduct from impact fees wrote on August 18, 2008 3:53 pm:
" I have always felt the impact fees are what really killed the housing boom in Lincoln. It would be interesting to see the number of permits in the County as compared to the number of permits in the City for new homes since these idiotic fees were put in place. I bet the % of County permits has increased 10 fold over the city permits - if you want to use an incentive, take away from the impact fees or don't the developers want that?? Mr. Mayor - it appears you are beholden to someone and now the piper has come to collect. You personally must realize this isn't good business or government but POLITICALLY speaking, you appear to be making a payback. We will remember the next time around - those of us who only seem to be paying into your pot. "
Thats just GREAT..... wrote on August 18, 2008 3:54 pm:
" Let's give money to people that don't even need it. That's the SMART thing to do.

Oh yeah...Lincoln IS the HEART of "Good Ol' Boy" country after all.

I doubt if someone that has the money or resources to even purchase a home in THIS price range are going to bat an eye at a 1000 dollar "incentive". All I see is a way for a developer to make some extra ca$h.

ANd this is being offered after all of WHAT cutbacks????? "
Jared wrote on August 18, 2008 4:23 pm:
" “get these first-timers out of their apartments and into the housing market.” I really doubt many first time home buyers are spending $150,000. "
SB wrote on August 18, 2008 4:39 pm:
" Please explain why impact fees are bad? Perhaps the builders/developers should quit building so many spec urban sprawl cracker jack homes and start concentrating on building quality pedestrian friendly developments with local amenities. Then you will have well built homes that people actually WANT to buy instead of an influx of shoddy homes on the market that people can’t stand to live in for more than five years. "
Yup wrote on August 18, 2008 4:46 pm:
" Wow, the money could be used to buy anything, cars? Why should the money be used for that? "
Eric wrote on August 18, 2008 4:49 pm:
" Excellent news. Let's get this thing going! "
george wrote on August 18, 2008 5:10 pm:
" I cannot believe this proposal. Then we have some that think this will help Lincolns economy. Just a sly way to bail out the builders who were stupid enough to over build. If they are serious, lets make it a 50/50 split in funding with builders and owners paying all closing costs. AFTER we do all sidewalks and streets in need of repair that is. "
Just a drop in the bucket wrote on August 18, 2008 5:24 pm:
" More than 2400 homes on the market for sale with possible half of them vacant. According to the number of Trustee’s Deeds showing transfers to lenders, also know as foreclosures, listed on the Register of Deeds website, by the end of 2008 Lincoln could have as many as 650 foreclosures if not more.
This plan will benefit 272 buyers at most. You’re not even close to making a difference. "
old guy wrote on August 18, 2008 5:41 pm:
" No way should a government body that is "millions" short on budget be giving money to a group of people who can afford to pay that kind of money for their housing. I don't care of he wants to dig in his pockets and give money away but he should not be doing it for upper tier money earners of owners when it comes at the price of another suggested tax increase and with this exsenator for years and years, he is used to proposals that use the public trough to finance his fanciful goody deals for people who need to face the reality, this isn't a gift situation. It is not sensible necessity in any way, shape or form. Get off it! "
Wow wrote on August 18, 2008 5:58 pm:
" With people already in homes having them foreclosed on because they can't afford them, why are you giving rich people more money so they can buy a new home? So you're going to bail out the home builder/developer at the cost of the taxpayer. You do realize the $5,000 you give the rich might not even be spent in Lincoln? Like Beutler said, they can use it for a car, furnishings. Why do I need to help them buy a new car too. With the lack of furniture stores in Lincoln, there's a good chance that $5,000 will go right down the road to Omaha. And after you get through bailing out the home industry, who then? There are lots of business that could use additional customers. Why don't you bribe people to buy new cars? Where does it end. What an absolutely stupid idea. And the sad part of this is, with Svoboda pushing this also, it will be passed in the dead of the night, just like the cigarette ban was. "
Sorry Ross wrote on August 18, 2008 6:00 pm:
" Impact fees were voted on to level the paying field between the home builders. Google, Impact fees, Lincoln, NE. The housing market has been a slump for some time now and foreclosures are on the rise.
Lincoln, has over built and now the builders want City to help bail them out.Lincoln Federal has program to pay the Impact Fees.
If the these home owners cannot do with out theses moneys, maybe be they should wait until they can afford a new home. "
JoBeth wrote on August 18, 2008 6:00 pm:
" Good God, we cut vital programs in the City and this is what we get for it? How mant police/fire/emergency persons could be funded by this money? How many programs for the youth and elderly could this money support? Let's get our priorities straight for once!!! "
Realist wrote on August 18, 2008 6:12 pm:
" This is just another welfare-for-Republicans-by-subsidizing-business ploy. Buetler is a Nelson wannabe; Democrats elect a Democrat and get a Repellican. The idea smacks of Hoppe -- Colleen's braintrust.

If we can ban smoking can't we also ban tax subsidies for fat cats? "
Free Market wrote on August 18, 2008 6:30 pm:
" Are you kidding me? This doesn't make any sense beyond a political sop to the Republicans....the economy is bad, yes, but do those who can afford 325k houses really need an incentive? What about the free market? The developers and realtors have had some very good years....don't come looking to the Gov for a handout when you have down times. If you can afford a house for 325k than you don't need help staying afloat. We've got 2,000 homeless people in this town and Mayor Beutler is giving away tax dollars for those among the best off in our community? What is scarier Steve Steuck, low housing starts or the fact that 20,000 people use the food bank each year? Where is the perspective? "
Jalengrma wrote on August 18, 2008 6:33 pm:
" This is crazy!! What is wrong with this mayor? I had high hopes for him, but not anymore. Here we are talking about cutting back on bus routes that help low income people, LES wants a steep rate hike and there are cutbacks all over and he wants to throw money at homebuyers. That is nuts! "
George wrote on August 18, 2008 6:46 pm:
" I purchased a home in 2003 and again in 2006, amazingly I did it without any local government handouts. The Mayor’s plan should be illegal. It is not the Mayor’s place to tinker with our free market economy. It is not okay for the mayor to say if you buy a new home in the six months he’ll give you $5,000 of local taxpayer monies. One factor contributing to the 2003 peak was mortgage rates being too low; again thanks to government tinkering. Greenspan lowers the fed funds to 50 year lows and blows the housing bubble we are working through today. Stop tinkering with the economy, let the free market correct itself. "
Jan wrote on August 18, 2008 7:12 pm:
" I agree with most everyone here. This is the stupidest thing I have ever heard of. What a complete waste of money. "
I dont believe this wrote on August 18, 2008 7:13 pm:
" When Beutler floated this idea, this Blog was very clear. We think this is a mistake. He continues it, with additions that are even more ridiculous. If you are going to subsidize something, it should be people who buy older houses and restore them to their original state. That is definitely a costly and time-consuming endeavor. If not that, then stay out of real estate. It really smacks of developers buying the mayor. This city is knee deep in subsidies already. Now adding the upper middle class. My opinion of Mayor Beutlerj ust fell through the floor, and I voted for him. "
Wrong Road wrote on August 18, 2008 7:36 pm:
" Why not take the money set aside for this and set up grants to assist people with down payments? Why not use it to further the kinds of programs provided by Neighborhood Works and others? "
Sally wrote on August 18, 2008 8:25 pm:
" This is the stupidest idea I've ever heard. If you are spending $325,000 for a house-you DO not need any further stimulus. I'll bet the Mayor smugly thinks--what a marvelous idea I've got here...The mayor had all these "town hall" meetings to ask for the people's opinions and then did nothing with that information. How many positions did he cut with the City to fund this stupid program??? "
Teresa wrote on August 18, 2008 8:40 pm:
" I think it is a great plan to stimulate the economy here. There are tons of houses for sale here and no one is buying them. "
I disagree with mayor wrote on August 18, 2008 9:04 pm:
" Someone who can afford a $325,000 home doesn't need nor deserve a subsidy for that home. I a appalled. Is there no public servant in this town who isn't pandering to business? I used to respect the mayor but this liberal Democrat is not impressed. "
Lynn wrote on August 18, 2008 9:07 pm:
" I concur, this is nothing short of crazy! This plan is an option for only a small segment of Lincolnites. What about other areas of our economy that are sagging? What about maybe throwing some money to the schools, the bus system, lowering taxes, balancing the budget or any of the other areas that need attention. And seriously, this money is for people who can afford a house up to $325,000? You've got to be kidding me!! That's pocket change to those folks! This is sick and wrong on so many levels!

Mr. Beutler, I'm a single mom working two jobs (55 hours a week) to make ends meet. The thought of some of my tax dollars going to help someone who can afford that much house just makes me vomit. "
Bull wrote on August 19, 2008 7:12 am:
" What about those families struggling for day to day life? The Mayor is forcing families to leave kids home alone by taking the after school program away and giving it to a none profit who charges more. The increased cost will create latch key kids who may get in trouble or hurt. Oh but the housing contractors need help. What about our future? Our kids are our future help them. "
Becca wrote on August 19, 2008 9:22 am:
" I am so against this, it really makes no sense except to help builders. I really can't even believe that this is being considered. Other posters have cited very good reasons why we should not do this, so there is no need to reiterate. Let us remember, all businesses have business cycles. This is a down cycle for home builders. It is not fun for them, but to expect the Government (taxpayers) to subsidize new home building when we have so many existing homes for sale, is utter madness. If we have money burning a hole in our pockets (which I doubt), let's offer subsidies for people buying existing homes in established neighborhoods of which there are many available. "
dumb dumb dumb wrote on August 19, 2008 9:26 am:
" dumb idea. People who can afford to buy a house that costs more than $150,000 don't need my tax dollars to help furnish it. We're cutting services right and left, but we have $600,000 to spend for this???

I talked with a real estate agent who tried to argue that impact fees are causing the decline in the housing market in Lincoln. Realtors and developers would love to attribute the housing slump to impact fees. Hello? We're in a recession, we've had a mortgage meltdown, people were buying up houses in previous years to capitalize on rising values - there are a lot of reasons that housing starts and sales are coming down now. Let's not use it as a convenient excuse for getting rid of impact fees.

I hope this "stimulus" program isn't approved. We need the money spent elsewhere, not feathering the pocketbooks of people who don't need it. "
Backwards wrote on August 19, 2008 9:26 am:
" This plan could be great, but the way it is currently written is idiotic. First of all those who can afford a $200k+ home don't need additional incentive. Offer more to those first time buyers. Offer more to those buying an existing home. Cap it at $150k. It makes no sense to line the pockets of those already with money. Spread the money to people it will really help. At first I thought this plan was a joke. "
Lincoln Taxpayer wrote on August 19, 2008 9:32 am:
" I just bought my first home in Lincoln last year where do I pick up my check. "
AC wrote on August 19, 2008 9:34 am:
" The city is in financial straights and facing a budget deficit ... and the mayor wants to spend our taxes on this !

Personally, I believe that money could be better spent elsewhere (libraries, law enforcement, etc) "
For those of you asking wrote on August 19, 2008 10:40 am:
" the reason it goes up to $325K is for the builders. The vast majority of our builders either top out or start in that range......very few build the low quality homes that command a price tag of $180K and below. "
I agree wrote on August 19, 2008 11:14 am:
" The city cut programs that help low income families in order to subsidize people who can already afford houses in the $150,000-$325,000 range? There's something wrong with that concept. People buying homes in these ranges don't need any extra money to spend as they please. This money would have been so much more beneficial going to the after school programs or keeping bus fares lower. "
LinkGuy wrote on August 19, 2008 12:08 pm:
" This is an excellent idea!!! It's a great way to continue to expand our city's tax base (so taxes don't go up or services get cut in the future) while also helping spur the economy - remember, it's just not builders and realtors we're talking about, but also lending institutions, title insurance companies, appraisers, building suppliers, building manufacturers, etc. The number of people who are impacted by the current housing market conditions number in thousands, just in the Lincoln market. Keep in mind, getting people to purchase existing homes doesn't expand our city's tax base, and expanding the tax base is key to keeping services without raising taxes. Our economy, like much of the world's economy, is linked closely with continued growth, not getting people to purchase property that is already on the tax roll. Good job Mayor!!! I'm sorry so few people understand the positive, long term impact of this plan. "
Dano wrote on August 19, 2008 12:49 pm:
" Why are we subsidizing the home building market? If you weren't sure on it before, how does $5000 change your mind. You couldn't justify it then and it is a one time bump, you probably still can't afford it afterward. Stop enticing people to over extend themselves in housing. This is part of the reason the housing market is where it is. That and over-priced homes, inflated relators fees, everyone thinking they deserve a $350 K home on a $50K year income.

If you can afford a home up to $325,000, then you don't need a subsidy or a handout? Spend what you earn.

You want to help people that need it, get it to the single parent families that would love to get out of low income housing if they could afford it. Give them $5000 on a $100K home. It shouldn't go to new homes at that high a price range.

Or put the money back into the programs you were going to cut back on. Stop thinking the governement should spend money to make a market better. It doesn't always work that way. "
Beaker wrote on August 19, 2008 12:53 pm:
" You want to stimulate the market, bring in more companies and jobs. Moving people from home to home is just churning the money pool. It doesn't create a long term solution to current issues. It only works to artifically prop up a weak market. Stop wasting tax payer dollars by covering it with the stimulus moniker.

Provide the real assistance to the ones who qualify and wannt to get out of lower end housing and need that extra boost. That extra something that could change the future for their whole family. "
how about this wrote on August 19, 2008 5:49 pm:
" Use that money to give rebates to people that upgrade their home to wind or solar power instead. "
growth pays for itself wrote on August 19, 2008 9:24 pm:
" I think we had heard that growth pays for itself. We have had growth why are we in such a mess in this city. Stop the handouts! "
Des wrote on August 19, 2008 10:45 pm:
" This is an utterly stupid idea. First of all, I am not about to buy a house in Lincoln, NE even if I have the money to do so. I am not about to pay ridiculous property taxes that this state and city levy. Secondly, I can't afford a house of my own because THERE ARE NO DECENT JOBS! I received my business degree in May and the only job I managed to find in three months of constant searching was a customer service position for a local insurance company. Talk about a waste of talents and education. The city government and the state government would be much better served working to make the state more attractive to businesses, particularly those who are fleeing states with even worse taxes than our own. However, from what I have seen from the Lincoln government and what I have heard when speaking with the governor's office, this idea has never crossed anybody's little brains. Now I just need to save up enough money to get out of this black hole of backwardness. "
Genius wrote on August 20, 2008 12:15 am:
" I wondered what we would do with the $750,000 that was cut out of city services for the elderly last year. Without needed supports, lifelong tax payers are forced out of their homes into nursing homes. Buyers then purchase their homes with a city subsidy. We all have a lot to look forward to. "
DA wrote on August 20, 2008 9:19 am:
" You've got to be kidding me! If you can afford a $325,000 home, you don't need a $5,000 rebate. If the city can find $600,000 to benefit a handful of people, why are we cutting city services, jobs, and letting our parks and roads fall apart? That $600,000 of my tax money should be used to benefit everyone in the city. How many salaries and services could that money be used for? "
Build It wrote on August 20, 2008 9:23 am:
" This is one of the best ideas from our city government in years. This plan should have the cap removed and be expanded to include more expensive homes. This would increase the tax base in Lincoln and pay for itself 10 fold over the next few years. The city portion of the money is from the special assessment fund. This is exactly the type of thing that money should be used for. Builders and realators are contributing some of the funds too. Everyone needs to stop whining and complaining. This is a fantastic idea that will help Lincoln grow! "

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