For a long time, the figures we have set in authority -- the powers that be, if you will -- have talked, met, conferred, bandied about, discussed, assigned to committee, scuttled, deliberated, tabled, meditated, pondered, mulled over and reflected on doing something to address the pathetic rate of homeownership in Cincinnati. At 38 percent, one of the lowest rates in the country, it is inexcusable and tragic that a community so well endowed with a variety of historical and architectural styles has allowed this to occur for so long.
During the past decade, many have speculated, engaged in hypothetical exercises, elaborated in lengthy commentaries and even proposed and promised solutions to this dilemma. But due to the tribe mentality our community is heir to -- combined with our unmatched mastery in debating, arguing and fighting over the rightful owner of a blade of grass -- nothing is accomplished or enacted.
Incessant infighting remains acceptable. In fact, it's the standard operating procedure that pervades our seven hills and has consistently led to de facto acceptance by the community at large that nothing can or will be done
Over and over, creative proposals -- and in some instances real workable solutions -- have been floated, only to dissolve into some impermeable political stratosphere and dissipate through some window of opportunity no one can find, let alone close. An unknown osmosis transcends our politically machinery, and the gears of progress spin, grind and bellow smoke, leading us to believe a remedy is in the offing.
A feeling pervades that soon the grand Pooh-Bahs invested with the responsibility of making our community a desirous and livable place will wave their collective thaumaturgical wand, remove their silk-covered veil of talismanic soothsaying and, voila, take action!
Knowing our history of territorial confrontation and jealous bickering, is it possible for there to be peace in the valley and the dawn of a new day? Perhaps, especially with the recent blitz of legislative enactments from a variety of local entities.
To begin with, the city of Cincinnati is considering eliminating the 26 tax districts that did nothing but confuse everyone. To accomplish this miraculous feat of reduced government bureaucracy, property taxes would be waived for new home buyers, thus stimulating homeownership in the city. Tax breaks have been offered for some time and in certain areas of the city, but this would be a new single standard applicable citywide.
The legislation's intent is to attract middle-class buyers by focusing on moderately priced homes and extending tax breaks to 15 years, up from the current 10.
Other city agencies have suggested that this incentive can be used as a tool to attract developers by making the city competitive with suburban communities in and outside Hamilton County. Under the proposal, taxes would be abated for the home's value, not the land value, so that where land is less valuable less tax is paid. For example, a new home owner in Price Hill can expect a lower tax bill than someone in Hyde Park.
The proposal is geared toward moderate-priced homes by abolishing taxes up to a value of $212,000 with new homes in excess of that value being eligible for a partial tax reduction. Some developers would prefer a higher cap, but the Department of Neighborhood Services is addressing what they believe to be the most pressing needs of the city first -- the loss of moderately priced homes.
To stem the exodus of homeowners from Hamilton County, the commissioners are proposing low-interest loans for homeowners whose property is in need of a fix-up. Approximately $28 million in loans will be used, drawn from the county's investment portfolio to reduce mortgage loans by 3 percentage points.
County Commissioner Tod Portune estimates that $10 million in loans will be issued next year, with an administrative cost to the county of $ 100,000. The hope is the program will pay for itself by increasing property values.
In addition, the county is also considering waiving property taxes for 15 years for new home buyers.
Statistically, it's a buyers market. When you combine the above incentives with the lowest mortgage rates in three years and the fact that more homes are up for sale with prices falling, now is an excellent time to buy.
The law of supply and demand affects real estate in the same way as in other sectors of economy. Take automobiles, for example -- dealerships are loaded with inventory and incentives abound designed to attract buyers.
Consequently, sellers have become more flexible as the number of multiple offers decreases and are more willing to be flexible on price to take advantage of the lower rates, thus allowing them to move up to more expensive homes.
With rates this low, monthly payments are reduced and builders -- including Ryland, Fisher and Drees -- are responding by developing more homes targeted to first-time buyers.
Combined, all these factors -- and the environment in which today's seller finds himself or herself -- is markedly different from the 1990s, when homes were appreciating at phenomenal rates. The pressure is beginning to increase on sellers in the form of more moderate prices and more flexible negotiating positions.
Preliminary comparisons between September of this year and last show a drop to 1,828 homes sold in Butler Clermont, Hamilton and Warren counties versus 1,931 in 2000. A decrease also occurred for existing single family homes sold last month to $156,000 from $160,000 last year.
Although it's not a trend, it could be the start of one, since housing prices are expected to rise at a lower rate this year than last.
With all that's gone on in our economy since September, real estate has slipped but not fallen. Combined with the long overdue incentives courtesy of our politicians, this new legislation might be perfect in enabling our community to withstand a slowing market.
Who would have thought that this protracted, never-ending fairy tale of woe would take a positive twist and result in a cornucopia of benefits that dramatically raise the standard of living for our community? Maybe we need to hold elections more often so more promises can be fulfilled, with happy endings proposed.
