Signs of the Apocalpse

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Signs Of The Apocalpse: #33 Cities Give Away Land To Build Tax Base

Friday, July 30th, 2010

Cities View Homesteads as a Source of Income

Give away land to make money?

It hardly sounds like a prudent scheme. But in a bit of déjà vu, that is exactly what this small Nebraska city aims to do.

Beatrice was a starting point for the Homestead Act of 1862, the federal law that handed land to pioneering farmers. Back then, the goal was to settle the West. The goal of Beatrice’s “Homestead Act of 2010,” is, in part, to replenish city coffers.

The calculus is simple, if counterintuitive: hand out city land now to ensure property tax revenues in the future.

“There are only so many ball fields a place can build,” Tobias J. Tempelmeyer, the city attorney, said the other day as he stared out at grassy lots, planted with lonely mailboxes, that the city is working to get rid of. “It really hurts having all this stuff off the tax rolls.”

Around the nation, cities and towns facing grim budget circumstances are grasping at unlikely — some would say desperate — means to bolster their shrunken tax bases. Like Beatrice, places like Dayton, Ohio, and Grafton, Ill., are giving away land for nominal fees or for nothing in the hope that it will boost the tax rolls and cut the lawn-mowing bills.

In Boca Raton, Fla., which faces a budget gap of more than $7 million, leaders are thinking about expanding the city’s size and annexing neighborhoods as an antidote. Sure, more residents would cost more in services, but officials hope the added tax revenues will more than make up for it.

And leaders in Manchester, N.H., and Concord, Mass., are taking an approach that might have once seemed politically unthinkable. They are re-examining whether their communities’ nonprofit organizations really deserve to be tax-free.

“The stress of the past couple years is causing us to look absolutely everywhere,” said Anthony Logalbo, the finance director in Concord, where officials realized that 15 percent of the town’s property value had become tax exempt and sent letters to nonprofit groups asking whether they would consider paying something to the town.

“Private schools and nonprofit museums and community organizations benefit the town in lots of ways,” Mr. Logalbo said, “except that they don’t contribute to the cost of running the town.”

Analysts say that this year and next, city budgets will reach their most dismal points of the recession, largely because of lag time inherent in the way taxes are collected and distributed.

Despite signs of a recovery, if a slow one, in other elements of the economy, it may be years away for many municipalities. Between now and 2012, America’s cities are likely to experience shortfalls totaling $55 billion to $85 billion, according to a survey by the National League of Cities, because of slumping revenues from property taxes and sales taxes and reduced support from state governments.

And even in places like Concord and Beatrice, where officials say budget strains are not severe enough to lead to layoffs or major cuts, a slow chafing has still taken a toll.

Beatrice (pronounced bee-AT-russ), which sits about 40 miles south of Lincoln down a highway called the Homestead Expressway, is recognized as home to the first Homestead Act application nearly 150 years ago. That law ultimately granted 270 million acres of land in 30 states to nearly anyone who could survive on it and pay a minimal fee.

Daniel Freeman, who came from Ohio, is said to have filed his claim for 160 acres near Beatrice just after midnight on Jan. 1, 1863, the day the law took effect. There were others who filed claims in other places on the same day (some say they were actually first), but Mr. Freeman captured a place in history. The government paid to take back his Nebraska homestead decades later to turn it into a national monument that honors the Homestead Act and how it transformed the nation’s population.

Beatrice’s new Homestead Act is not the first to revive the land giveaway. Some tiny towns, particularly in the Great Plains, have made such offers before, mainly as a way to increase dwindling populations. But disappearing is not the fear in Beatrice, which is home to several lawn-mowing equipment manufacturers and where the population has held steady at around 12,000 for decades.

Instead, city officials are hoping to return some of the many lots the city has accumulated, because of unpaid taxes or flooding risks from the Big Blue River, and return them to the tax rolls. The city has not suffered gaping budget shortfalls or the property tax declines seen in some larger cities, but some large purchases and road reconstruction have been delayed, waiting for a return to flusher times. Click to continue »

Signs Of The Apocalpse: #21 Shrinking Cities

Tuesday, May 18th, 2010

Wrecking crews are preparing to tear down a landmark 5,000-square-foot house in the posh neighborhood of Palmer Woods in the coming weeks, a sign that Detroit is finally getting serious about razing thousands of vacant and abandoned structures across the city.

In leveling 1860 Balmoral Drive, the boyhood home of one-time presidential candidate and former Massachusetts Gov. Mitt Romney, Detroit is losing a small piece of its history. But the project is part of a demolition effort that is just now gaining momentum and could help define the city’s future.

Detroit is finally chipping away at a glut of abandoned homes that has been piling up for decades, and intends to take advantage of warm weather and new federal funding to demolish some 3,000 buildings by the end of September.

Mayor Dave Bing has pledged to knock down 10,000 structures in his first term as part of a nascent plan to “right-size” Detroit, or reconfigure the city to reflect its shrinking population.

When it’s all over, said Karla Henderson, director of the Detroit Building Department, “There’s going to be a lot of empty space.”

Mr. Bing hasn’t yet fully articulated his ultimate vision for what comes after demolition, but he has said entire areas will have to be rebuilt from the ground up. For now, his plan calls for the tracts to be converted to other uses, such as parks or farms.

Even when the demolitions are complete, Detroit will still have a huge problem on its hands. The city has roughly 90,000 abandoned or vacant homes and residential lots, according to Data Driven Detroit, a nonprofit that tracks demographic data for the city.

After a stuttering start, caused by a dispute over the disposal of asbestos from demolished homes, the program is just now gaining pace.

City officials say they aren’t sure how many structures ultimately need to be torn down. The mortgage crisis compounded Detroit’s economic decline, leaving nearly 30% of the city’s housing stock vacant, according to Data Driven Detroit.

“Neighborhoods that are considered stable are now at 20% vacancy,” said Deborah Younger, a development consultant involved in the demolition effort.

Until recently, the city didn’t have the funds to tackle its growing list of houses slated for demolition. But $20 million in federal funds, primarily stimulus dollars has helped to kick-start the effort.

Demolition, particularly of historic buildings, is a sensitive issue in Detroit, often leading to wrenching battles between developers, residents, city officials and preservationists. But many residents are now pleading with the city to tear down decaying structures that are attracting crime and repelling home buyers. However, some still worry that the sort of large-scale bulldozing that the city is now talking about will forcibly dislocate longtime homeowners and preclude any chance of a comeback for Detroit.

“The city has never done this before,” says Ms. Henderson, the Building Department chief. “We had to make a culture change.”

The demolition of the Romney family home is the first of its kind in Palmer Woods, a high-end enclave in northwest Detroit that was developed at the dawn of the U.S. auto industry and housed many of its pioneers. Palmer Woods has just a handful of vacant properties among its 292 homes, according to residents. It’s one of the anchor neighborhoods that is critical to the success of Mayor Bing’s right-sizing effort.

The house was owned by Mr. Romney’s parents, George and Lenore Romney, from 1941 until 1953, when the family moved to the northern suburbs. The elder Mr. Romney would go on to become head of American Motors Corp., then governor of Michigan and U.S. secretary of Housing and Urban Development.

As recently as 2002, the house sold for $645,000. But it has had a troubled history since then, lapsing into foreclosure more than once, bouncing between lenders and falling into disrepair. Last year, following years of complaints from neighbors, Wayne County declared it “a public nuisance and blight” and ordered it demolished.

The younger Mr. Romney, who is considered a leading GOP presidential candidate for 2012, said “it’s sad” that his childhood home is being razed, “but sadder still to consider what has happened to the city of Detroit, which has been left hollow by fleeing jobs and liberal social policies.”

Residents of Palmer Woods take pride in their tradition of historic preservation. But they’re happy to see this house go. “This is an eyesore, and it makes no economic sense to fix it,” said Joel Pitcoff, a retiree who lives around the block. “Who wants to spend $1 million on a house so it will be worth $400,000?”

Source: Wall St. Journal

Architecture Of A Recession: Abandoned Housing Developments

Wednesday, April 14th, 2010

When we think of abandoned cities, most of us picture the old west ghost towns of the United States: desolate, dusty places where once life bustled and filled the streets with motion. But there’s another kind of abandoned place today, one that is underlined by the sad state of the current global economy. Housing developments that were once meant to be wonderful new homes for fortunate families now sit desolate and wait for nature to reclaim them.

See more photos and read more at: webecoist.com

Signs Of The Apocalypse: #45 Government Services Cut Back

Tuesday, March 30th, 2010

U.S. Postal Service pushes to cut Saturday mail delivery early next year

The proposal, which would save $5.1 billion annually by 2020, would eliminate the equivalent of 49,000 full- and part-time jobs.

The U.S. Postal Service said Monday it wants to end Saturday mail delivery by early next year as part of a wide-ranging plan to slash jobs, save billions of dollars and cope with the impact of declining mail volume in the Internet age.

“Given the fact that we’re facing such a huge deficit, we’d like to move as quickly as possible,” Postmaster General John E. Potter told a news conference.

Faced with a projected $238-billion deficit over the next decade, the Postal Service board of governors approved the cuts last week and ordered Potter to submit the proposal to the Postal Regulatory Commission on Tuesday. In addition to cutting one day a week from the delivery schedule, the proposal would eliminate the equivalent of 49,000 full- and part-time jobs.

Officials said the changes would save the Postal Service a forecasted $3.3 billion in the first year and about $5.1 billion annually by 2020.

Under the plan, letter carriers would stop street deliveries to U.S. homes and businesses and pickups from blue collection boxes on Saturdays. Mail would continue to be accepted at post offices Saturday, to be processed Monday. Express mail and remittance mail services would continue seven days a week.

If approved by the Congress and the regulatory commission, officials said they hoped to implement this plan by the first half of 2011. Congress currently mandates delivery to all U.S. addresses six days a week.

Potter said the Postal Service would eliminate about 26,000 positions through employee attrition and lay off 13,000 part-time workers, most of whom carry the mail once a week as substitutes. He said the high attrition rates are only possible because the average age of letter carriers is 53 and most have pension arrangements that would allow them to retire at 55. About 10,000 carriers retire each year, Potter said.

Potters said the changes were made necessary by citing continuing drops in mail volume. American mailboxes currently receive an average of four pieces of mail each day, but this is projected to be reduced to three pieces by 2020. Current daily revenue generated by each delivery is $1.40 but will slide to about $1 per delivery in 2020.

Source: LA Times