More Overheated Greenway Rhetoric
News reader Mary Ann Hitt compares the Council’s rejection of the Easthope-Johnson proposal for the Greenway to the Bush administration’s plan for drilling in the Arctic National Wildlife refuge. So if you’re keeping track, the DDA’s plan for a parking lot at First and William is marginally less bad than putting a landfill or a war zone there, and about the same as an oil drilling operation. No word on how it would compare to a nuclear waste dump or a bioweapons facility.
Double-wide strollers = Ford Expeditions
posted by Anna on April 6th, 2005 at 11:28 amDiapers = Nuclear waste
Toblerone = Arsenic
she doesn’t even live in the city: “Mary Ann Hitt, South Lyon”
posted by jsanwa on April 6th, 2005 at 1:08 pmDoes the DDA even notice there’s always spots available on the Ashely surface lot and existing first/williams except weekend nights ? They need to build another entire structure to cater to the weekend main street crowd ? I’v made a point of taking a good look the last few times I visited friends on Ashley.
posted by Dan on April 6th, 2005 at 2:06 pmDan - Perhaps though by fostering downtown density there will be a growing need for parking at other times. Unlike NYC - you simply can’t get by without a car in Ann Arbor’s sprawl - or at least it’s a lot more difficult that it is in NYC.
posted by Anonymous on April 6th, 2005 at 2:31 pmShe’s from South Lyon and complaining about here?
Wow. Development there is psychotic. At least, it seems to have grown an incredible amount since I first met friends from there about 5-6 years ago.
Work on that first, darlin. I have a feeling that increasing sprawl there is helping to up the number of commuters coming into Ann Arbor.
+ hyperbole much?
posted by Jen on April 6th, 2005 at 3:11 pmShe must feel that the greenway is as pointless as drilling for oil in Alaska, the latter being a very-short term fix for a very-long term problem.
Oh wait, she’s an Oakland County exburbian expansion resident. Now it makes sense.
Why would anyone from South Lyon care about Ann Arbor anyways. 12 Oaks is SO much better than Briarwood and is a closer trip.
posted by Anonymous on April 6th, 2005 at 3:21 pmI do think it is funny that the Ann Arbor News, which, by the way - lest we forget, endorsed George Bush last November, has now stooped to running theatrical carpet-bagger letters to the editor in order to fuel its “flood the zones” campaign in support of the greenway.
Almost as funny, that is, as their intensive campaign against downtown development is mysterious.
On second thought I guess their burning love for “accidental” greenway activism is not that mysterious, as it is they who run sections completely devoted to advertising subdivisions in the suburbs and townships. That’s a connection that deserves to see the light of day.
posted by dan faichney on April 6th, 2005 at 4:48 pm“Does the DDA even notice there’s always spots available on the Ashely surface lot and existing first/williams except weekend nights ? They need to build another entire structure to cater to the weekend main street crowd ?”
Dang… for the last time, nobody is adding parking. They are merely consolidating surface lot spots into a structure, freeing-up some underutilized land for mixed-use infill development. I’m amazed how difficult it has been for this simple-point to sink-in to the minds of the community.
posted by Brandon on April 6th, 2005 at 4:56 pmDan, your comment is the one I wish I’d written.
posted by Anna on April 6th, 2005 at 5:01 pmGiven that the downtown office vacancy rate is 13-14% (or at least was June 2004 http://www.swishercommercial.com/annual_vacancy_report.php) one would expect to find empty spaces in the public lots. If those spots disappear, 13-14% of the available downtown sqfootage becomes much harder to rent, and therefore cheaper, and therefore depresses property value. This is why new downtown developments are expected to contribute to the parking stock.
I really wish this issue could be discussed in the open, in terms of density pros and cons, and not in false terms of greenways and NIMBYism.
posted by darbo on April 6th, 2005 at 5:45 pmI’m not asking this to be antagonistic, but why is it bad for Ann Arbor if property values are depressed a bit? They are really out of control. And is it possible that the vacancy rate is a result of the office space being too expensive for the market to bear?
posted by Anna on April 6th, 2005 at 6:00 pmAnd Anna, yours is the one I wish I had written.
posted by DrMandrake on April 6th, 2005 at 6:11 pmI know a number of folks (actual OFW homeowners!)who would like to see the market come down a bit. It might bring some of the artists back and get rid of some of the yuppies.
posted by OFWinsurgent on April 6th, 2005 at 6:28 pmI imagine if you did a poll of A2 homeowners if they would like their property values to go up or down, somewhere around 95-99% would say up.
posted by James on April 6th, 2005 at 6:40 pmHonestly, I don’t agree with that. It would be great if all you care about is money or making enough flipping property to move up to something fancier. However, if one is locked in (mortgage rate) and doesn’t have an immediate need to refinance, likes where they are and wants it to be more accessible to a more interesting segment of the population, a drop in value would be fine. Especially if property taxes were affected (unlikely in this town).
posted by Anonymous on April 6th, 2005 at 7:13 pmthat last comment was me…(work computer killed my name)
posted by OFWinsurgent on April 6th, 2005 at 8:30 pmIs that the way most people feel, or just the way you think they should feel?
I would be willing to bet a lot of money that the vast majority of people would rather see their equity go up, rather than down.
posted by James on April 6th, 2005 at 8:46 pmVast majority is not the same as 95-99% (your estimate). I agree with you about the vast majority, but I don’t think it’s that high.
posted by OFWinsurgent on April 6th, 2005 at 9:29 pmIt also depends on how you ask the question…something like “would you prefer a meandering greenspace or a parking garage in your back yard?” comes to mind (ha-ha).
A simple question about property values going up or down would generate the response you predict.
On the surface, both of these questions are kind of the “duh?!” variety.
posted by OFWinsurgent on April 6th, 2005 at 9:33 pmDan, have you missed the fact that the DDA plan would knock down several other parking lots and redirect this parking to First and William.
As to this woman from South Lyon, it is obvious why she cares. Ann Arbor is the de facto downtown for exurban tourists too scared to go into Detroit who want a simulated urban experience. Not all those Hummers and Excursions come from Barton Hills and Scio Township.
posted by Anonymous on April 6th, 2005 at 11:37 pmBrandon: “They are merely consolidating surface lot spots into a structure, freeing-up some underutilized land for mixed-use infill development. I’m amazed how difficult it has been for this simple-point to sink-in to the minds of the community.”
Exactly. I love people, and their lack of logic. I also hate surface lots with a passion, but that might be my hatred towards the ones that cover Detroit more than Ann Arbor’s specifically.
posted by Jen on April 6th, 2005 at 11:54 pmIf you hate surface lots, just wait until you see an unfundable greenway.
posted by dan faichney on April 7th, 2005 at 12:00 amAs a property owner who doesn’t have immediate plans to move in a city where property values are rising sharply, I can tell you with confidence that I want prices to stop rising, James, and most of my friends feel the same way. My taxes almost doubled the last time my property was reassessed. It’s increased the cost of owning my house by so much that if I see another increase like that, equity or no equity, I’m going to be completely priced out of my house and will have to move to a condo or another town. It is *rare* that cities decrease the mil rate, so when property values go up, taxes almost always go up proportionally. Not only does it shove relatively young people like me out of the market, but the hardest hit are the people who are elderly and who have already paid off their mortgage. Here they thought they’d be able to afford their houses because they don’t owe the bank anything anymore, but it turns out that their taxes are now higher than their mortgage payments ever were.
Property values going up does not always equal “good”.
posted by Anna on April 7th, 2005 at 9:34 amAnna, here in Michigan, due to Proposal A, property tax increases are limited and so do not rise proportionately to increases in property value until the property is sold.
posted by tom on April 7th, 2005 at 9:47 amWhich also has the effect of pricing young buyers right out of the market. But at least the elderly aren’t losing their homes.
Sadly, I think that also contributes to the “I’ve got mine, you get yours somewhere else” mentality that seems to be so prevalent around here.
posted by Lehigh Valley Refugee on April 7th, 2005 at 11:52 amThat’s a very weird system. I guess it’s good that the elderly aren’t priced out of their homes, but on the other hand, it means that in order to get money for schools and other services you have to just keep raising the mil rate, which would make the cost to people entering the market almost completely impossible (e.g., you’re sitting in a house that was assessed at $50K, it doesn’t matter to you if the mil rate is 75, since you still won’t pay that much, relative to the guy who just bought the equivalent property at $400K). That means there’s an incentive for people who already are locked into the old property assessed value keep wanting to raise the mil rate every time they want to add services — since it very disproportionately effects new residents. Nice.
posted by Anna on April 7th, 2005 at 12:12 pmYeah. No matter what, the value of homes in Ann Arbor is rising faster than the rate of inflation. As long as that’s the case, property taxes are the same whether home value is rising exactly at the rate of inflation or at 100% a year. So, regardless of whether a homeowner plans on moving soon or not, it’s in their short-sighted economic best interests for their property values to go up up up as fast as possible - since it’s only the person they sell to, and make mad cash off of - who pays the hiked taxes, and not the current homeowner, no matter how long they stay there.
posted by Murph on April 7th, 2005 at 12:39 pmWhere does this woman park when she drives to Ann Arbor?
Anna- Yeah, it’s dumb. Blame Engler.
posted by js on April 7th, 2005 at 1:07 pmThough I’m not a homeowner and ignorant of a lot of specifics, the Economist had an interesting section a couple of weeks ago suggesting that the current housing bubble means that renting is a better investment these days than owning. That is, between the prices, the true costs of owning (i.e., property taxes, maintenance, and insurance in add’n to the mortgage payments), and the odds of a burst in the bubble, one would get a better return on their money taking all the dollars spent above an average rent to be a homeowner and investing them. Again, I’d refer to the actual article for the specifics, but it was kind of interesting.
posted by Nick on April 7th, 2005 at 2:06 pmYeah, thanks for reminding me Nick. If you’ve already owned for a while and have been riding the prices up, you’re not in bad shape, since in some parts of the country, housing has risen at 15%/year over the last several years — even if there is a downturn you’ll still have done well relative to, for example, the stock market. That being said, I probably wouldn’t buy somewhere expensive (e.g., Bay area) right now.
posted by Anna on April 7th, 2005 at 2:24 pmMy brother is a realtor in SF and he says it’s INSANE.
posted by OFWinsurgent on April 7th, 2005 at 2:38 pmLast time I was in Palo Alto, I pointed to a tiny little house and said, laughingly to a friend, “I bet that little thing is like, $600K.” She said, “Honey, that house is worth well over a million.”
posted by Anna on April 7th, 2005 at 3:18 pmI bet you could make a lot of money by buying houses in Flint or Detroit and airlifting them out to the Bay Area. Prices are, what, a factor of 100 different?
posted by Murph on April 7th, 2005 at 4:40 pm600 sq ft. is over $300K, closer to 400.
posted by OFWinsurgent on April 7th, 2005 at 5:11 pmI haven’t lived in Ann Arbor since 1999, so I don’t know the details of this issue, but one thing I would warn against is being for the greenway just because it’s green. Ann Arbor already has tons of great greenspace, and a certain amount of urban density is a prerequisite for a good downtown.
Anyway, don’t do like they did in St Louis (my home now). They tore down a bunch of historic buildings to build a string of downtown parks. Most of these “parks” are about 1 block square and surrounded on four sides by busy city streets. Not too pleasant. One of the attractions was supposed to be the uninterrupted vista of several blocks. In the 80s the city let a developer build an office tower on half of one of the block right in the middle, destroying the view and pretty much making the whole thing pointless.
posted by Joe on April 7th, 2005 at 6:39 pmAnna,
Your property tax increase must have been because you refinanced. Because of Proposal A, you simply won’t ever see a large jump in property taxes unless you move or refinance, because reassessments only happen then. Proposal A is bad public policy, not least because it nails first-time homeowners who are often young. Old people actually make out like bandits if they have been living in a house for a long time and haven’t refinanced because the only way for property taxes to increase is to increase the millage and there are a lot of structural limits on this and it is also difficult politically to do it by much. Old people on fixed incomes get screwed in some states but not in Michigan.
posted by Anonymous on April 8th, 2005 at 12:14 amAnna doesn’t live in Michigan.
posted by Joy on April 8th, 2005 at 8:02 amYeah, what Joy said. Plus, I agree that never raising taxes for people who are currently homeowners isn’t good public policy, but I’m not sure what the solution is for the elderly. Not that, I agree.
posted by Anna on April 8th, 2005 at 9:29 amI think raising property taxes due to an increase in property value is unfair as well. Lets say, hypothetically, the coolest thing to live next to was built next to your home. Your property value immediately increases 1000%. Chances are you wouldn’t be able to afford your property taxes when it was reassessed and would have to move, or you might be able to afford it by taking a home equity loan or something, but that comes with some serious risk. That seems horribly unfair to me.
Perhaps the fairest thing would be to eliminate property taxes and thus every city would have to generate revenue through income or sales tax, or some other more creative means? I’m not so sure that’s the best idea, but it seems to me that property taxes create loads of unfairness regardless of how you manage/control them.
posted by James on April 8th, 2005 at 10:59 amAlso, the popularization of interest-only adjustable rate mortgages = housing bubble.
I recently read that 48% of Cali homebuyers in 2004 took out this type of mortgage. I imagine the number isn’t as high in Michigan, but still significant. Anyway, once all these suckers have to start paying principal (and possibly have their rates raised on them), there’s going to be a flood of homes put on the market.
posted by James on April 8th, 2005 at 11:18 amProperty taxes aren’t nearly as unfair as sales taxes, which are about as regressive as it gets.
posted by Joy on April 8th, 2005 at 12:16 pmAnyone who decided to get an adjustable rate mortgage anytime in the last few years gets what s/he deserves.
posted by Anna on April 8th, 2005 at 12:22 pmJames I saw that article too…did you get the link from atrios? I think it ran in the LA Times.
posted by OFWinsurgent on April 8th, 2005 at 12:51 pmEveryone pays the same rate on the sales tax. Depending on how you look at it, that’s either neutral or slightly regressive. If you’re a person who’s income hasn’t changed much and your property taxes increase at a high rate, I would imagine that person would consider property taxes highly regressive.
posted by James on April 8th, 2005 at 1:45 pmI don’t read atrios. I can’t remember where I got it from.
posted by James on April 8th, 2005 at 1:48 pmTrue, James. I’d never really thought of it that way, but property tax can actually quite regressive.
posted by Anna on April 8th, 2005 at 1:59 pmSales taxes are generally thought of as regressive because there are limits to how much one can reduce one’s consumption of stuff in response to them. That is, we all have basic necessities like food, clothing, etc. that we can’t just decide to consume less of past a certain point - adding a tax to the prices of those things means that the poor run out of money faster.
posted by Nick on April 8th, 2005 at 2:58 pmThe ironic thing is that one huge reason homes are so pricey is that there are tons of tax *breaks* to owning your own home. People have this giant tax-free investment - it’s hard to feel sorry for them when they have to pay property tax on it.
posted by Anonymous on April 8th, 2005 at 4:03 pmAnonymous, are you a homeowner? The only tax break is on the interest on your loan (the interest is tax-deductable). In all, that means a $2,000-3000 or so a year early on in home ownership (depending of course on the price of your home; I’m basing this on a mortgage of around $150-200K which is roughly $12K in interest if you have a mortgage with around a 6% rate) because the ratio of equity to interest in each payment is low early on and goes up as you pay off more of the loan. On the other hand, property taxes can be as much as 6 - 15K (depending on mil rate and home value). The reason houses are a good investment is their tendency to rise in value, not the tax breaks. I don’t doubt that people who can afford houses should pay more in taxes than, say, students, but if they can afford a house, the chances are pretty good that income is higher, so it seems to me that you could tax income at a higher rate and it would be fair. And Nick, of course that’s right, but we exclude many things that are essential from sales tax already (e.g., groceries). Housing is also a necessity, and there seems to me to be something wrong with rising property values forcing people out of homes they’ve had for 20-30 years and which were well within their means previously.
posted by Anna on April 8th, 2005 at 4:25 pmActually, Anna, property tax payments on your home are deductible. Here in Ann Arbor, the average single family home pays over $5,000 annually in property taxes, which can mean over $1,000 in additional tax deductions for the average taxpayer.
Points paid when you initially finance or re-finance a home are also deductible.
If you take out a home equity loan, the interest on that loan is also deductible in most cases.
When you sell your primary residence, there is generally a 100% exemption from capital gains taxes.
In summary, there are numerous other tax “breaks” associated with home ownership.
posted by Anonymous on April 8th, 2005 at 11:23 pmYawn.
posted by Delgado on April 9th, 2005 at 6:42 pmNot to prolong this fascinating discussion, but I wouldn’t count on Ann Arbor real estate being on a bubble like the really hot spots (San Francisco/Palo Alto/Boston). I’ve been here 27 years and property values have gone up very steadily at 6-12% a year (depending on neighborhood) the entire time–regardless of recessions, interest rates, or taxes. Ann Arbor has always been inside a real estate bubble, not on top of one.
FYI: there is another way to see your taxes get adjusted up to current market value–pull a building permit and do a remodel or addition. Ouch!
Even with the caps in Proposal A, regardless of whether or not you sell or remodel, property taxes do go up a significant amount every few years based on regular re-assessments.
Previous posters are correct about the negative effect of rising property values and taxes on younger buyers. One of the secondary effects of this is that popular areas such as the Old West Side and Burns Park lose elementary school populations because young families can’t afford to move in. Schools get money based on student headcounts. If schools slip, real estate values can slip, too. (Or, as in these examples, you only get wealthier and wealthier young families moving in and the disparity between schools across the district continues to increase because wealthy parents donate money, time and resources that others can’t afford to give.) Another good reason for higher density and the affordable housing it can provide!
Now excuse me, I have some paint drying that I need to go watch…
While this site is ugly to look at, it’s pretty good on turning progressive/regressive taxes into layman’s terms.
posted by js on April 10th, 2005 at 4:42 pmI know all about Proposal A… my wife and I bought a house in AA last fall. The previous owner had lived there 40 years and had a relatively low ‘taxable value’. We buy the house and we get instantly bumped up to the current ‘assessed value’. Suddenly we’re paying 35% more property tax than she did! Same house, just a change in ownership. We’re undoubtedly paying some of the highest property taxes on the block, since most homeowners have owned for at least 5 years (if not 20+) and have therefore been ’sheltered’ from the recent property boom.
I understand the idea behind Prop A… you don’t want a little old lady priced out of her home because she can’t afford the property taxes, but there has to be a better solution for the home buyer. Maybe some sort of transitional period? Is that done in other states?
posted by Peter on April 11th, 2005 at 9:15 amI was strongly opposed to Proposal A for all the reason stated. The proposal actually wiped out of the state constitution the language guaranteeing that property taxes would be equitable.
Before Proposal A, elderly homeowners ALREADY had the “circuit breaker” which limited their property taxes, so the reassessment cap was totally unnecessary to keep any seniors from losing their homes.
But far worse than the impact on old vs. new homeowners is the gigantic windfall the cap has been for all corporate property owners. Domino’s Farms and Briarwood Mall will never be reassessed again. No doubt the share of property taxes paid by businesses is declining steeply from year to year.
When I argued against the proposal, pointing out this problem, people either (a) refused to believe that the assessment cap applied to business property, or (b) insisted that this was a “small problem” which could be “fixed” later on.
Think again. The difference between taxable value and assessed value on corporate property is in the trillions by now, statewide, and is politically untouchable. And as a direct result, local governments everywhere (with sharply limited millage rates) are being forced into severe cutbacks.
Read the news: people in every Michigan community have to choose which municipal services to sacrifice. Garbage collection? Bus service? Planning staff? Police patrols?
Gov. Engler’s administration was deeply hostile to local government, and the policies he put into place remain, protected by right-wing Republican control of both houses of the legislature.
As long as Proposal A is in force, you can forget about cities having any resources to do more than the utter, absolute minimum. Cities with rapid growth, like Ann Arbor, aren’t there yet, but will be in coming years.
posted by Larry Kestenbaum on April 11th, 2005 at 12:17 pmSo… Larry… How do we fix it?
posted by js on April 12th, 2005 at 12:03 pm