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Week of January 28, 2008
Housing incentives must be in an economic stimulus package for such an endeavor to be successful, NAHB told Congress in no uncertain terms this week.
[more]
Applauding the Fed's aggressive move [more]
NAHB's President-Elect was honored on Capitol Hill this week [more]
Updated "myth buster" resources [more]
Green mandates within a HOPE VI reauthorization bill [more]
Results of NAHB's most recent Critical Issues Survey [more]
State support doesn't make grade
By: Riley Yates, The Intelligencer
In making the case against development, the cost to school districts is an often-cited statistic.
The Central Bucks School District has long offered numbers to show that each new house adds thousands of dollars of costs beyond what it brings in through property taxes.
But a study by The Intelligencer of 120 homes built recently showed that Central Bucks’ numbers were overstated in developments in Plumstead, Doylestown and Buckingham.
If students there received the same state and federal aid as existing students get, the new houses would pay for themselves. The fact that they don’t points less to the harm of development than to inequities in Pennsylvania school funding formulas.
The study looked at the tax records of 60 homes in Timberly Farm in Plumstead, 52 homes in The Reserve at Holicong in Buckingham and eight homes in Hamilton Square in Doylestown.
This year, the houses are expected to pay roughly $1.08 million to Central Bucks in property and earned income taxes, or $10,797 for each of the 100 students they would be likely to send to public schools.
On the House: Should seller get inspection?
By: Al Heavens , Inquirer Columnist
With today's wide selection of homes making buyers pickier, some of my readers are again raising questions about the value of pre-inspections by sellers.
Here's a case in point:
One reader, Kevin, says his mother recently inherited a home in Springfield, Delaware County, from her late sister. The house is in an attractive neighborhood, and Kevin believes that his mother's primary goal is to sell the house quickly rather than "maximize what she is paid for it."
The house has some "obvious issues," he says, including plumbing in disrepair, dog-stained hardwood floors, dated wallpaper, a 55-year-old gas stove, and several stress cracks in ceilings. His mother is correcting some of these issues, and trying to decide which ones are simply cosmetic and "not worth fussing with."
Yet Kevin points out that "there could be serious hidden problems with a house she does not know well because she has not lived there." He asks whether there is an advantage to engaging a home inspector and disclosing the findings - and any repairs or corrections - to potential buyers, or whether his mother is better off simply not knowing unless a buyer's inspection uncovers a problem.
Good question. I posed it to some experts in the Philadelphia market.
In this litigious society, ignorance is not necessarily bliss, and the words "seller should have been aware of the problem" is being heard in a lot of courtrooms these days. Still, says environmental lawyer and educator Joseph Manko, "I think you're getting a little ahead of yourself when talking about litigation.
Democrats hand out endorsements
By: Brian Scheid, The Intelligencer
With almost no opposition from within the party in state races this year, the Bucks County Democratic Committee’s annual endorsement meeting Saturday morning in Warminster turned into a pep rally of sorts.
“Everyone said 2006 was a fluke,” Congressman Patrick Murphy told a crowd of about 250 Democrats in the auditorium at William Tennent High School in Warminster. “We’re going to prove them wrong this year.”
A few minutes later, Murphy was unanimously endorsed by party members in his re-election campaign. Murphy was the party’s choice in 2006 as well, but faced a primary challenge from Andy Warren, a former county commissioner.
This time no Democrat challenged Murphy, who represents Bucks County, part of Montgomery County and two wards in Philadelphia, but Republicans have been lining up to run against him. Tom Lingenfelter of Doylestown, Jeff Madden of Plumstead, Tom Manion of Doylestown Township and Joseph V. Montone of Falls have all announced their plans to run for Congress. The Bucks County Republican Committee’s endorsement meeting is scheduled for Feb. 7.
The only race that technically faced any opposition Saturday was for the state treasurer seat, but the endorsement from Bucks Democrats was seen as a foregone conclusion since John Cordisco, the head of the Bucks Democrats for the past five years, is running.
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Home sales stable, but show signs of decline
By: Crissa Shoemaker Debree, Bucks County Courier Times
Bucks County fared better than the region and the nation in home sales last year, but the number of houses sold still decreased 4.4 percent over 2006, according to a market report prepared by Prudential, Fox & Roach Realtors.
Nationally, sales of existing single-family homes plunged 13 percent between 2006 and 2007, the largest drop in 25 years. Median home prices also fell to $217,800, down 1.8 percent. Construction of new homes is down 24.8 percent, the second biggest decline on record after a 26 percent drop in 1980.
“We are closing the book on the worst year for housing, possibly since the Depression,” Commerce Bank's chief economist, Joel Naroff, wrote to clients. “With prices down and sales collapsing, the situation looks bleak. How much more can sales fall? Probably not much, though I have been saying that for months now and they have.”
In Bucks County, 6,912 homes were sold in 2007. The median home price was $299,000, down 0.3 percent from the year before.
In the Philadelphia metro region (which includes Bucks), home sales were down 11.1 percent. The median home price increased 1.8 percent to $229,000.
“Our region, in general, didn't show the huge price appreciation and frenzied activity that other parts of the country did, so we haven't fallen as far,” said Steve Storti, senior vice president of marketing for Prudential, Fox & Roach. “Bucks County, for whatever reason, has been even more stable than even the rest of this region.”
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Editorial: Norristown
Hoping to undo years of neglect
Montgomery County Commissioner Joseph M. Hoeffel recently described the physical look of Norristown in one word: "shameful."
He's right. Norristown does look shabby, especially to be the county seat of Montgomery County, one of the wealthiest counties in Pennsylvania.
Meanwhile, other surrounding county seats - Doylestown, Media and West Chester - have undergone a renaissance of sorts. The main streets in those towns are bustling, and property values have taken off.
In Norristown, the main drag has more potholes than people. The main glimmer of activity is the domed courthouse, which sits up on a hill, isolated and seemingly out of touch with its surroundings.
"The town has been neglected by the powers that be," says Hoeffel.
He should know. Before his election last year, Hoeffel was a county commissioner for seven years in the 1990s. He shoulders some of the blame.
But help may finally be on the way.
Developers plan a $55 million movie and television production facility at the run-down Logan Square shopping center that could create hundreds of jobs and needed buzz.
That's a great start, but no panacea.
Hoeffel says he and fellow Commissioners James R. Matthews and Bruce Castor plan to make revitalizing Norristown a top priority.
While that's good to hear, it's going to take more than talk by this often squabbling trio to get it done.
Maybe the commissioners could attract fans of mud wrestling, because that's about all they have been doing of late.
Second mortgages plague banks
By: Rachel Beck, AP Business Writer
Investors who think now is the time to start buying beaten-down banking stocks could be in for a shock if they don’t carefully review those companies’ distressed home-equity loan portfolios.
Massive losses tied to subprime-mortgage investments knocked down bank earnings over the last year, spurring investors to flee those stocks. But that could be only the start: Rising delinquencies in home-equity loans and other second mortgages could keep the banks’ results from improving anytime soon.
In recent days, executives at Citigroup Inc., JPMorgan Chase & Co. and Wells Fargo & Co. said missed loan payments factored into their quarterly earnings declines.
Why? A so-far small, but growing, number of homeowners who used their homes like an ATM to fund their spending and investment bets are finding themselves in a financial pinch.
During the housing boom, many tapped the rising value of their home equity — the difference between a home’s market value and what is owed in mortgage debt — to pay bills or tuition, do renovations, go on vacations and more.
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Phila. building inspectors shut down rowers' building
City inspectors have shut town a building used by several Philadelphia rowing clubs.
The city owns the Canoe Club, a building where about 100 boats are kept. Rowers gather and change in the building before heading out on the Schuylkill River. Now city building inspectors say the building has structural problems and have fenced it off.
That's created a problem for the rowing clubs at Temple University and several Philadelphia high schools. Team representatives hope that a meeting with the Fairmount Park Commission set for Thursday will result in an alternate place to store equipment.
Fed’s Issue on Rates: How Low?
Having stunned investors one week ago by unexpectedly slashing short-term interest rates, the Federal Reserve appears poised to announce another rate cut on Wednesday as insurance against a recession.
But policy makers face difficult questions about how deep to cut rates, given that a recession has yet to materialize and that inflation pressures remain a nagging concern in the background.
On Wall Street, where the clamor about a recession remains at a fever pitch, investors are betting heavily that the central bank will lower the overnight federal funds rate by an additional half a percentage point, to 3 percent.
That decrease would come on top of last week’s surprise reduction of three-quarters of a percentage point, and could set the stage for lower interest rates on home equity loans, car loans and business lending.
But the outcome of the meeting is far from certain. While recent data on the housing market and retail sales has reinforced the impression of a stalling economy, economists were surprised on Tuesday by an unexpectedly strong jump in orders for durable goods in December.
Chesapeake Bay cleanup costs could triple some Pa. sewer bills
The cost of cleaning up the Chesapeake Bay may eventually be felt by sewer customers far to the north, even in Pennsylvania.
Without some form of federal or state relief, customers of the Williamsport Sanitary Authority and municipalities that contract with it will see a big impact. Authority officials say a typical quarterly bill could go from $60 to nearly $190 within five years.
It's part of an effort to clean up nutrients that are discharged into rivers, including the Susquehanna. Downstream, the nutrients increase the growth of algae. That reduces oxygen and depletes water life in the bay.
House halts debate on taxes
By: Kpri Walter, The Intelligencer
The state House of Representatives has temporarily halted its debate over cutting homeowners' property taxes.
The House ended its session Wednesday afternoon without resuming its consideration of a measure it has been debating for the past two days.
The House voted overwhelmingly Tuesday to give lower-income seniors a school property-tax break, undercutting a proposal that would have slashed property taxes for all homeowners but raised sales and income taxes.
There's no word on when the House might take up the measure again.
Bucks County state lawmakers said the proposal to eliminate all school property taxes tanked on Tuesday because the more taxpayers learned about it, the less they liked it.
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New post renews hope that Phila. can blend development, planning
Harris Steinbert is executive director of PennPraxis and led the year-long public planning process for the Central Delaware Advisory Group.
Mayor Nutter's decision, announced this week, to combine the city's commerce and planning functions under one deputy mayor is an auspicious move. With the hiring of Andy Altman, a planner who is a veteran of Los Angeles, Oakland and Washington, as both commerce director and deputy mayor for planning and economic development, Philadelphia at last has the chance to enter the big leagues.
Grown-up cities can do planning and economic development hand in hand. The two realms are not mutually exclusive. This notion is not new - but it is novel for the Philadelphia of today.
For decades, we've been stymied by leadership that saw planning as an obstacle, not an asset, in cutting deals for development. This ignored the experience of comeback cities such as New York, Chicago and Washington - not to mention our own past. Only a few decades ago, Philadelphia was a model for planning for growth and setting rules for development, while preserving, respecting and enhancing our own sense of self as a city.
In the interim, unfortunate development - such as the world's only waterfront Wal-Mart - went up on the Delaware River, and we inherited acres of surface parking lots and structured garages, the legacy of failed mega-projects such as the Disney Quest hole at Eighth and Market Streets. All done without a vision or plan.
The mantra was that any development was good development - a sign of both desperation and lack of sophistication. We got away with it because, by charter, city planning in Philadelphia is only advisory to the mayor and council, with no jurisdictional power.
