A home stimulus proposal laid out for the City Council on Monday has been expanded to include existing homes, not just new houses.
DEENA WINTER / Lincoln Journal Star | Posted: Sunday, August 17, 2008 7:00 pm
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.”
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.