Sunday, December 28, 2008

City Will Fail in Housing Business

The city of Racine now wants to buy and flip forclosed homes in marginal neighborhoods with your money. Read about it here: http://www.journaltimes.com/articles/2008/12/27/local_news/doc4956ea55c1ee0781977341.txt

Not a good idea. The city "already owns six houses which it has obtained through defaulted home improvement loans" according to city development director Brian O'Connell. In other words, taxpayers are holding the bag for the city's previous failed efforts in the housing business. What will be done differently this time? Did someone at city hall get fired for squandering our money the last time? Nothing and no are the correct answers I suspect.

The city officials will fail again and again in the housing business because they fail to recognize an obvious truth: People who can afford to but a home in Racine's rough neighborhoods don't want to live there and many people who do live there aren't stable enough, economically or otherwise, to be successful homeowners. This leaves renting as the only realistic option for the homes in question.

9 comments:

Anonymous said...

Why do we have a city development director, a city manager AND a mayor?

colt said...

I would rather see the City try and do something with these homes even if they end up tearing them down for lots, then have then either have them boarded up or let the slum lords rent them out.
Maybe just maybe we can get a few in the hands of good folk who can help turn a neighborhood around.

Side Bar

Should Racine keep the slide down hill going me and Mrs Colt are gone. (hold the cheers)that would leave on this block 1 owner occupied home out of the 16

ChuckyD said...

If you really want to turn the city of Racine around it is really simple. Create a reason for wealthy people to want to invest and live there. Run a highway spur form I 94 to downtown. Create a Entrepreneur's technology district where we provide low cost housing and work space to the people who are risking it all to create new technology and ideas. Force the state to allow Racine to create non-unified magnet /charter schools. Recruit foreign entrepreneurs to emigrate to Racine and bring their patents and ideas with them.

The mayor is spitting into the wind on housing. Racine is battling the same thing many older industrial cities are. It has a high concentration of poor uneducated people. People with the means will not invest in these neighborhoods, especially with so many in the sub $100K area. The city is not competent in the housing game. They don't have the credentials but they do have free money from the Fed. Just think if they would have to show what their return on investment has been for all the free money they have received over the past three decades. My guess is that it would be pretty dismal.

Urban Pioneer said...

Amen Chucky, I've been blogging for access to the Lake, and incentives for Business to invest in Our City. Also the Breaking the Educational Disaster in this town. Raise the education, standard of living and the the city will Soar like a Phoenix.

Denis Navratil said...

Thanks ChuckyD for your comments. I agree with the gist of your comment but I do wonder about one thing. Do you really want the same city officials who have twice failed to create an arts distict (remember 6th st, heart of the arts and now uptown) to create a tech district? Rather than have our local government officials choose which favored business to subsidize, why not lower the tax burden on everyone and let entrepenuer sort that out.

Charter schools or better yet school vouchers would help enormously. The dismal state of our public schools is the largest impediment for people considering a move to Racine. It is time we realize that simple truth.

Thanks for your input ChuckyD.

Anonymous said...

But why is it always foreign entrepreneurs and scientists who are going to save us? Does anyone realize how many ideas and patents from AMERICAN scientists never see the light of day? I'm talking about real ideas and technologies, not Yokit.

Anonymous said...

The city also have several houses that the old southside housing program. They have had to dump quite a bit of money into fixing those house up with tax payers money

ChuckyD said...

Denis,

I would never advocate government taking the lead on creating a tech district. Government is not qualified to drive marketing concepts. That said, we would need to be part of the solution in terms of potential infrastructure and tax law changes.

I still believe in the notion that if you are willing to risk the peoples money on these projects that the private sector is by far better qualified to handle you should at least offer up your resignation if they don't pan out.

Could you imagine if all those who are so sure that the KRM is a good investment were willing to put their careers on the line? Again, it is always easy to spend other peoples money when there is no risk to those government officials doing the spending.

Anonymous said...

Chucky - I have advocated all of these bailouts to go back to the venture capital and angel investor paradigm - all of these people with huge salaries and numerous houses should have to put their possessions as collateral if not capital, just like any small inventor/entrepreneur must do.