there goes the neighborhood

The End of White Flight - WSJ.com -- Interesting article, as the WSJ heralds the end of white flight; now that they've said it, folks, it must be so. It points out the factors shifting the balance to some degree--declining minority birth rate, hip senior empty nesters, young professionals. It doesn't talk much about tax abatement, and that is probably because tax abatement was never needed in the first place.

All you have to do is have a place that is--

1. Safe
2. Clean
3. Economically sensible and attractive

--and people will move in. You don't have to bribe them by giving them financial incentives that the existing residents don't have.

Maybe we can start a PILOT program (Payments In Lieu Of Taxes) for all the newly minted Clevelanders who have joined us the past decade; we need to buy more trees and landscaping.

And let's not forget to spend more on police and fire, while we're at it, until we reach equilibrium, much like that one experiences in a small town. That's what a neighborhood is, after all: a small town in extremely close proximity to other small towns.

There goes the neighborhood. Here comes the neighborhood.

24 years at 1.87%

As of October 5th, we will have owned this property of ours in Cleveland's Archwood-Denison/Brooklyn Centre neighborhood for 24 years. I track investments for time-weighted and dollar-weighted rates of return. Using data from the county auditor's site, and considering the original purchase price ($32,000) and the cost of our improvements to the property (which have been minimal), and the current market valuation on the website ($59,800), I see that the time-weighted rate of return here has been 1.78% and the dollar-weighted rate of return here has been 1.87% over these past 24 years, since 1983.

Is it any wonder that the latest county commissioners' report, as The Cleveland Equanimous Philosopher (It's The Details That Can't Be Strung Behind An Airplane That You Should Be Worried About) has pointed out, shows a deficit projected for the end of this year? (see pages I-3 and I-10 for starters.)

Apparently, the numbers tell us, this county has been run in such a fashion that our personal investment in the county (our little $32,000 house) has not kept pace with the outside world, and yet we as a county are paying outside-world prices for goods, services, and salaries. This is not sustainable. We need to cut back on what we are spending around here for that nebulous layer of county services. Can you tick off right quickly what things the county does are mission-critical? The roads, and then what?

What we pay to keep a bloated county trundling along seems to be like throwing good money after bad. We've supported them lavishly in the past, and all we have is a growth in our investment here of under 2%. It's time to pull the plug on them. We should not continue to pay top dollar for mediocre results.

Mark Rosentraub: we need new immigrants

Fading away - cleveland.com --Hey, this article's a hoot. Mark Rosentraub, the very one who signed off on that half-baked study about tax abatement, now says we need new immigrants. It reminds me a lot of an old Richard Pryor routine.

Yep, Mark, without an underclass to live in the older structures and pay more than their fair share of the property tax, who's going to pick up the slack for all the new, tax-abated stuff?

Save Our Land: Gone Forever, but now a seminal event

Save Our Land: Gone Forever -- It's funny how, when people become outraged and feel anger, they begin to find each other and share information, and all the issues begin to dovetail together. The messy obfuscation swirling around the Fulton Road Bridge finds parallels in the Breuer Tower rush to judgment. The "oops" demolition on Riverside feels strangely like the disappearance of Denise's back yard. For our neighborhood and for the city, the beginning of the depradations on West 44th Street have become a seminal event. It all began in Ward 15. It's become "us" versus "them."

Demolition calls to mind tax abatement and residential real-estate development concerns are reflected in commercial concerns. Ultimately, all the indicators point to our having elected and appointed bad help who serve imperfectly or fail to serve at all. They forget that they're the help, the servants of the public, and begin to think they're rock stars. In this comment, by one of our neighbors over on Archwood, Joe Cimperman gets whacked. The commenter is a Tremont native. He uses plain talk. Enjoy.

real-estate blinders

As Condos Rise in South Florida, Nervous Investors Try to Flee - New York Times -- There's a parallel here to Cleveland -- in both places, they keep building new, regardless of what the markets are telling them.

In Cleveland, they add the extra incentive of tax abatement. City Council recently voted 20 to 1 in favor of continuation of tax abatement, even though since 1997, the tax-abated properties have been directly offset by the number of unsold, vacant, abandoned, and foreclosed existing properties--the number is in the 10,000 to 12,000 range, and nobody has yet done a study that mentions this fact. It seems that the big picture is what we should focus on first but, hey, around here we ignore the numbers and focus on the hype, the feel-good proposition.

Our Ward 15 councilman Brian Cummins was the lone holdout, and we're proud of him for speaking out against an unfair imposition on long-time residents. But, to put him on notice, some sneaky little scuttling bureaucratic creep allowed a typically Cleveland+ "oops!" to happen, and a house Brian had lined up for renovation on Riverside Avenue was demolished, in a snafu, on a Saturday.

Anyway, here's the after-action report on the insanity in South Florida:

“I get two or three of these calls a day,” said James Ryan, a lawyer in Boca Raton who said he had 40 clients looking to get out of condo contracts. One, Mr. Ryan said, abandoned a $340,000 deposit rather than close on a $1.6 million unit that lost its appeal as the market faltered. The numbers suggest that it will only get worse. In Miami-Dade County alone, 8,000 new condo units will be completed this year and nearly 12,000 more in 2008. But demand has dropped markedly, and people who thought they could “flip” condos — buying, then selling for a steep profit before construction is done — are parting with that fantasy. After years of stunning price increases — 25 percent in the West Palm Beach-Boca Raton area, for example, from March 2005 to March 2006 — condo prices have started dropping.

protecting the Collinwood legacy

Meet the Bloggers » Cleveland City Councilman Mike Polensek -- Here's a good interview we did last week at Carol's Agape Christian Books & Cafe at 15813 Waterloo. I'm not of the East Side any more, so I hadn't been to Collinwood for a good while. I was pleasantly surprised. Mike Polensek has been safeguarding the legacy.

The first clue you have driving into the neighborhood is that it's clean. The second impression I got was that the brick street to the east of the cafe was in good shape--they hadn't patched it with asphalt or concrete--they had done what they were supposed to do, taken up the brick, made repairs, and re-laid the brick. The street was restored, not hastily patched. When I asked Polensek about this, he proudly stated that they paid attention to preserving their brick streets. In our ward, they consider this an impossible task, and we forfeit legacy daily to the depradations of the utility companies and the division of streets.

Mike pays attention to the details. It seems he does what he says he's going to do. He's a welcome counterpoint to the young flibbertigibbet downtown and to the west of him. As "The Dean" of City Council, he lends some stability and value to what otherwise would be a convocation of half-steppers, compromisers, and chameleons. I think you can count on him to protect the citizens' interests first. Listen, and decide for yourself.

Meet.The.Bloggers have decided to hold their Bloggapalooza this year on July 28th at the Beachland Ballroom during the Waterloo Arts Fest. The Beachland is just down the street from Carol's Agape Cafe; the area is definitely back and in move-in condition. You don't need tax abatement to make Collinwood attractive; it has intrinsic value.

33

Touring Warhol’s Space, and 32 Other Art-History Sites - New York Times -- Of the 33 NYC places where artsy and hip started, bloomed, and flourished, the "33 spots around the city where art history was made", I wonder how many had tax-abatement, got county dollars by harnessing smokers, or were intentionally located in preexisting, institutionally ordained art districts. What do you think? Which is the tail, which is the dog? What's wagging around here? If I recall, back in the day it used to be enough for a place just to be cheap, cool, and relatively hassle-free.

connecting the dots, doing simple math, just noticing, just wondering

Taxing balance Abatement reviewed: From the SunNEWS on March 15th, with my emphasis added. The SunNEWS quote is italicized:

"Cleveland's existing citywide residential property tax abatement law was renewed in 1999 and is set to expire June 15. A separate abatement law for downtown won't expire until 2010. Cleveland began offering residential tax abatement, at 100 percent for seven years, for new downtown construction in 1987.
In the decade prior, new housing construction in Cleveland was almost non-existent. In some years, fewer than 20 homes were built. After 1987, the pace quickened. It accelerated in 1991 when the use of tax abatement was expanded citywide, offering a 100 percent abatement over 15 years. The abatement applies only to structures, not land.
Since then, 11,259 residential units were built, according to a 2007 study by Cleveland State University's College of Urban Affairs. The study also showed 60 percent of people buying tax-abated housing are coming from outside Cleveland. "

The forecast for 2007 is that Cleveland will have between 10,000 and 12,000 vacant or abandoned properties, which can be accounted for nearly directly by the 11,259 tax-abated new properties. The overall Cleveland population is less now than what it was in 1991. Where is the benefit? Where exactly is the gain? What is the loss?

Nobody's doing the simple math. Nobody's talking straight talk.