http://www.gazettextra.com/news/2012/may...

maybe you should put money into properties you already own!!

How can the city justify buying a property and losing that much money? Grants come from somewhere be it federal or otherwise. I'm sure the taxpayers are footing the bill. This is one home out of many that are run down in those areas. You will never be able to rehab those places to keep out the slumlords. It's like plugging a leaking dam by sticking your finger in it. I lived in that area for many years. There are many home owners that really take pride in their residences tho sadly just as many run down rentals that need to be bulldozed not rehabbed. That would be the only way to clean things up. This is no market to be investing in real estate period. The city supposedly was saying there was no money for street repairs and other services that we all need then takes a loss like that in stride. Why can't people in government postions use just common sense when it comes to spending?? Can any of us go around blowing money and have no worries about the repercussions later? The city needs to get out of the real estate business period and take care of the core services the entire city needs.

Should of torn it down and saved the money. Could of made more green space or another park.

frogger, the house can't be sold to anyone -- they have to be income qualified, and yet still able to get a bank loan. It's difficult to find such buyers, but they are also more likely to care for the house and keep it for a number of years.
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What many people don't realize is that this program was funded by an initial $500,000 of HUD money, but when the city sells properties, the money comes back to the program and is "recycled". So the same dollar gets used multiple times.
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The other thing people don't realize is what it does to your own property value to have a run-down slumlord property next to yours. We have people in the Fourth Ward who love their homes but can't get their friends to *visit* because of the crime and nuisance activity nearby; imagine how easily such a home will sell, especially in the current market. This program isn't just about individual properties, but about neighborhoods that are affected by a blighted property being run into the ground by a neglectful owner. When that happens, the entire neighborhood loses.
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Chicagoans knew this because it was a strategy abused by realtors and speculators during more racially segregated times. It was called "blockbusting", and it would involve moving a black family into a block of white-owned homes. The white owners would sell in a panic, often at a loss, resulting in a windfall for the realtors. Similarly, a slumlord actually gains if he can get his property so bad that neighbors want to sell at any price -- he can then get their property too. It's a cynical game and the losers are everyone.
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By the city taking this property and rehabbing it, we are saying as a community that this neighborhood is worth saving, and that a neighborhood that sticks together and stays is more valuable to the community as a whole than the mere dollar value of the property itself. I know people who live on Madison near that house; I know people who live near buy/sell/rehab houses in the Fourth Ward. The difference the program has made is almost impossible to calculate in dollars.
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We were told years ago, even before the crime got bad, that we should just move. We stayed. Why should we be the ones to move, just because there are landlords (and commenters in this thread) who would be happy to see our neighborhood destroyed? The hell with them. It's our neighborhood first, and we're not going to roll over.

Let's not fool ourselves. There is zero chance this house would ever have in the past or future sold at a point where they would have broken even or come close.

RCHS tour I mean.

This whole situation is emblematic of government intrusion and WHAT THEY CALL investment. However, at this point it becomes somewhat mute for this instance. The best path is to take the loss, sell the home. In a better market they may have gotten most of the investment back. In a better economy, they may not have even had to make the investment. In retrospect, they should consider not doing this again in the future -- we should look forward and take the lessons learned.

So in the listing it has the RSHS hour tour board out there. It was on the tour last year. Seems they painted the exterior since the tour though. So this has been for sale for about 1 year???

janesvillean
Jun 23, 2012 at 8:52 p.m.
Suggest removal

The purpose of this program is not to make money"
I understand this. A wash or so but to lose this much????
$158 in rehab????? DId you over spend ofr the neighborhood or what??
Who is this Pet realtor?

So a really good investment for the city? lol

The city can't do a public auction because the owners have to qualify by income. The city has never looked for a profit doing this, they are trying to help people get homes and help neighborhoods get cleaned up. Thank you Jennifer and Kelly for all you have done with this program!!

The broken window fallacy clearly makes sense here. These neighborhoods have had the level of investment the market deems appropriate. They have been neglected. Time, poor upkeep, and irresponsibility on the part of the owner/inhabitants have made them "a broken window." We can sit and argue philosophy 101 all day and get nowhere but it is clear to me that what you see as an investment I see as a complete waste of money. Money that could have been left in the pocket of somebody and spent in a constructive manner of their own choosing. Instead the money was taken by force and spent on a pet project that has zero in terms of real, tangible, measurable outcome. But to folks in government this is not important as long as you can cloak yourself in feel good words like "neighborhood stabilization." Perhaps we should hold up Cabrini Green and Henry Horner as models of neighborhood stabilization? There were a lot of folks that got a lot of good feelings from those investments in the greater good. They turned out well. Law of unintended consequences I guess.
Nobody has defined the elusive benefits of neighborhood stabilization and they are not measurable. Keep in mind that right now our federal government is essentially borrowing 40 cents of every dollar they spend so excuse me if I feel projects like this with no measurable goal, no clear mechanism for achieving this squishy goal, and no minimum amount needed for investment to achieve said goal, are a huge waste of taxpayer dollars. I can only imagine wastes like this going on in every community. Then people wonder how we are 16 trillion in the hole. I suggest a different route. Let's have the city be fiscally responsible and rent a bulldozer and tell the federal government thanks but no thanks. Just because everybody else is eating like a pig does not make it OK. Fixing our financial mess in this country is going to take people doing the right thing and saying no.

by the way the stupid dummy coj could have contracted to have a very nice brand new home for 158k...
I hereby nominate the city of janesville for "stupid of the year award"!!!

the city,in the past, loaned HOMEOWNERS 20k w/10k forgivable @ 2k/yr this would be better use of the $$$ to fix up run down homes. the city is too stupid to be in this business and can not even come close to break even...
i thought the reason the city tore down briarmoon's little barn was some ordinance about costing more than 50% to fix a rundown building???

jv93 -- Just to clarify, my comment regarding location was meant to imply that the houses in these neighborhoods are often unattractive due to their location relative to other blighted houses. I find it odd that you would infer that the houses need to be relocated. Instead, the point was that improving the condition of the houses would in turn improve the perception of the neighborhood.

Also, to argue 'the broken window fallacy' for this topic is fallacious. The whole notion of the fallacy is that economic activity can be created through the destruction of present wealth. While being true, 'breaking a window' often leads to an offset of other economic activity. Thus, the conclusion is that there is a loss in activity as opposed to a gain.

Yet, in this case, the goal wasn't to destroy a home prior to fixing it. Instead, the goal was to bring a house up to standards prior to putting it on the market. This resulted in economic activity that was tangible instead of hypothetical.

What's worse is that you automatically assume that the 'broken window fallacy' is always correct. In key situations, this argument does make its point. Yet, one cannot always assume that the alternative purchase would have been made. In any situation where money would have not otherwise been utilized, the repair of a 'broken window' does result in beneficial economic activity. It is just ridiculous how many people point to the 'broken window fallacy' so often, without understanding the inherent problems with that argument.

I think your biggest problem in your arguments here is that you keep trying to attack this issue as being the cause of another issue you feel strongly about. By your standard, taxation is a waste of money. So, no matter the results of any government spending, the allocation will always be a waste. You keep attacking the use of these funds because they don't succeed based on a set of criteria you deem necessary. And then, you offer nothing but criticism in response to others' arguments.

It appears that you are the one that is confused. Especially when you think that simply pointing out the flaws in a situation results in all of the benefits being negated.

I'm sure the 'woulda, coulda, shoulda's you had in mind were more beneficial. But just complaining about it won't get you back your tax dollars.

So let me get this right. The homes need to be rehabbed so that people will buy them. According to you it shouldn't take very many rehabbed homes fixed up to have your desired effect which nobody really has effectively defined this effect nor have they stated how many rehabs are needed to achieve it. After your entire explanation you state what is really wrong with these properties is their location? I thought they just needed rehabbing and we would achieve stabilization? Do we now have to physically pick them up and move them across town to achieve "neighborhood stabilization?" Which is it? You seem confused. Also, you made the point that this "economic activity" was beneficial. If it is we should have the city rehab all of the houses in town. But we all know economics and the broken window fallacy would step into this faulty logic and render our feel good "economic activity" for what it truly is...a giant waste of resources.

jv93 -- In a way, your remark about how it's free money has some truth to it. See, unlike an investor that would only put money out for others to obtain under the condition of receiving more in return, this particular venture did so without such constraints. Therefore, the money was freely available; at a time when many investors weren't investing.

I do understand the point you're trying to make. You see a situation where you can argue the government is wasting money, and so you do. The hope is that you can then argue that the government should tax less because all it does is waste money; such as illustrated here.

I just happen to disagree on this particular instance as being a waste. There is a great deal of value that can come out of a project like this. The immediate result was the economic activity of labor and materials. If in the long term, this project does indeed lead to these neighborhoods improving, the end result was worth the effort.

As for the city buying every blighted home, it shouldn't have too. Much of the reason these homes are unattractive to buyers is the location. Should that perception change, more people are likely to invest.

After all...its free money!

Perhaps you can hire a consultant with the next $85,000 to "study the effects?"

I'm well aware of the standard arguments. How many $85,000 loss situations will be enough for you? Should the taxpayers buy all the homes in foreclosure and rehab all of them? That way we can keep everybody working all the time right? And last but not least, the still unanswered question, who pays the tab?

jv93 -- The reason you see this endeavor by the city as a colossal failure is that you compare it to the criteria of a private investor. Often, the goals of government are not the same. Nor, should they be.

Sure, for one that seeks profit in real estate, this would be a huge loss. This is because the key purpose of such investment is to see a substantial return on the money invested. Any money spent offsets profit.

However, for the city, the goal isn't to get more money back. To argue that it should would be absurd. Do you really want the city becoming a competitor in the real estate market?

Now, as for what was accomplished and why it cost so much...

The city purchased a blighted home. One that was in foreclosure and not purchased by anyone else. They then utilized money from a federal program to rehabilitate the home. In doing so, this money was put back into the private sector each step of the way. It resulted in the employment of those who worked on the home.

Additionally, work was done that typically wouldn't have been by an investor. Lead paint abatement is very costly. However, while a private investor could have left that responsibility to the purchasers, the city chose to remove the problem. Further, the necessary repairs to bring the home up to code would have cost money to someone. The city made these as part of its program.

Are the purchasers getting a great deal? Of course they are. And so too may the city and its residents. When you look at the positive benefits associated with having this home owned by its occupants, versus the alternative of leaving it empty, the city has made an investment.

Is it a good one? Only time will tell. For anyone to know for sure, the effects will have to be studied. If the city can reduce the expenses associated with this home, possibly extending further to the neighborhood, then perhaps the project will come out on top. Should this lead to further investment in the area, thus increasing property values, then the outcome is even better.

I think most of you miss the point! The bidding was not done openly! Their is corruption unless this is done fairly! Have a public auction and some transparency here!

Federal Money is better than raising yours and mine state and city taxes to fund the projects. Yes we contribute to the Federal government, but the hurt is not near as deep as city and state taxation. It provides the vehicle for road improvements, home improvements and probably a host of others that no one ever thinks about. We repaid all but $5,000 of the loan at that time it was $48,000. Our so called basement was shored up, siding replaced that was rotted, new furnace, new roof, exterior exit from the second floor. steel beams under the house, as in 1870 they didn't use steel, but rough cut lumber. $48,000 back then was a lot of money, and to be able to save, pay it close to off, have 2 kids and move into a newer home after 10 years was well worth it. As I stated, nothing says you cannot buy a home in the look west district and bring it up to code.

"It's FEDERAL money, get over it."
Talk about ignorant....
FEDERAL money is TAXPAYERS money...as in MINE AND YOURS too..

During the eighties we owned a home in the look west district not far from the one on Madison St. Without the loan from the city, we could have never brought the home up to code. We lived in the home for 10 years and the city only lost out $5,000 of the money they invested. We had been making monthly payments. The broker made more money than we did. The whole thing was, it improved the neighborhood, it enabled us to have a nicer home where 2 children were born and something we could afford. It also enabled us to save for a new home after 10 years. What is wrong with all you naysayers out there? Nothing stops you from owning a home in the Look West District and getting a home improvment loan with the city. People need a start in life and it makes economical sense. It's FEDERAL money, get over it.

I was going to post "UNBELIEVABLE" ....but considering these morons on the council, it actually is believable...
What a crock...and great example to set for all those private residents who might have gotten to money to buy it, fix it up themselves and make a legitimate profit...
Geesh....what next......maybe they should buy an old falling down bridge and rebuild it to put over I-90 for the school students...heck it might as well bed a four lane one too....'cause remember, it is not about the profit....sure thing.....ROLLING EYES....

Poobah, Where are all the billionaire contributors? Ummm...gee I don't know...doing something constructive with their money instead of throwing down a poop drain.

The city council made their bed they can sleep in it. Why would I ever make an offer on this house to begin with? The entire enterprise was born out of stupidity so now some posters would have "conservatives" put a bid in? Seriously why would I do something so stupid? After all it was forward thinking liberalism that brought us programs like this. Let's let them make a break even bid on the house. That's only fair isn't it? I'm sure a good portion of these self-righteous do gooders live in the neighborhood? Perhaps it is their own property values they were concerned about to begin with which is why they so ardently support these types of "neighborhood stabilization" efforts?

The grant money was going to go somewhere, might as well come to Janesville.

Where are those billionaire contributors when you need them?

<$85,000> Maybe they can make it up in volume :)

I'll be expecting one you upstanding and moral conservatives to put a bid in for the amount that was spent renovating the house, or just be quiet.

Well people.. If your not happy with it..Run for City Council or make a higher offer on the house..

Granted, anyone here could have bid on this house, but it was only listed for 73900? How does anyone stick 158,000 into a house, then list it for less than half of what they stuck into it? This family is getting a great deal and it will be interesting at how long they live in it. BTW, the city should have had an open auction first, then if they did not get the money they needed, list it. This sounds more like pet projects for the city.

I could walk into a local car dealership with a gun and say "give me the keys to this minivan." I in turn could hand those keys over to a needy family. Would I be morally correct in making the same statement you did? At least a needy family has a new vehicle right? Wealth redistribution is morally wrong at the core. Anybody who tries to convince you otherwise lacks integrity.

Remember it's not the government's money first. So when you say they cut revenue what you really mean is they allowed people to keep money that rightfully belonged to the owners and not the government who takes by force of a gun.

Mooching be it corporate or CDBG garbage is immoral. Period. Make no mistake the republican party is also on notice for its collusion with TARP.

You must also have a negative opinion on the tax cuts jv93. We have cut billions in tax revenue to boost the income of the wealthy (job creators) and the net result has been huge deficits and no jobs. At least in this case some individual or family is getting a nice house and the neighborhood benefits by gaining an occupied residence.

Interesting Janesvillean. That last part of your post must be the tolerant part of liberalism? Anyhow, I think this whole affair is clear evidence to all that there are certain places government simply does not have any business being a part of.

That house looks very nice. I drove by it today. I will sell for more than $75,000 if put up for auction.

Is it just one certain bank that the city is buying the forclosed property from? That would be a sweet deal for the bank to unload these properties to the city.

If the buyer had the house appraised at $ 75,000. why would the city sell it for $ 73,000. That looks like $ 2,000. less than what it is worth. Would it not be smart to hold on the the house a little longer and sell it for the whole amount or with the improving economy, even more than what it is appraised for today. Why would anyone sell something for less than what it is worth ?

Some public sector employee probably bought it - yeah, that's it.

"Noble" intentions, but a prime example of local, state and federal government tax expenditure decision making at it's best.

If it wasn't for the power of taxation, NO citizen would willingly make an investment in such an inept enterprise!

Maybe there's a program for financing sidewalks out there? At least it would help take care of a local issue.

woody, the program buys houses at a foreclosure auction, in which anyone may legally bid. The cost of acquisition is the least expensive part of this process.
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BBB, this funding is from the Community Development Block Grant program, not city taxpayers. As to those who call this the "federal teat", well, you paid your taxes to Washington; do you want any of those dollars to come back to Janesville, or would you rather they be spent someplace else? The entire purpose of the CDBG program is to spend money improving local communities under local direction. That money was already allocated by Congress to this program and Janesville refusing it will only mean IT IS SPENT ELSEWHERE, helping the economy of some other community. I'm sure you'll all feel noble when you shut the door on a ghost town, but I believe that I pay taxes for purposes just like this.
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Unfortunately, Madison St. has been one of the worst-hit blocks in the entire city with slumlord rent-it-into-the-ground tactics. One building was razed about 18 months ago. Even after this renovation there are properties that are an embarrassment to the city. Intervening via this program is one of the few ways we as citizens and taxpayers can effectively intervene in neighborhood deterioration.
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If you say "do nothing", leave. Leave Janesville. You're voting for closing it down anyway, so leave now and let the rest of us do something for it. We don't need you. Don't let the door hit your ass on the way out, either.

Did bank "A" unload this house to the city, in turn to buy it back after it has been repaired? I think it would be interesting who the city bought it from, and who is buying it.

This is just not right. The difference should be deducted from the city managers pay. No way should the taxpayers have to make up the difference.

Federal stimulus money at it's best.

I applaud these projects! Living in neighborhoods with homes in disrepair or literally falling down, affects the entire area's property values. We have 2 such homes in my neighborhood in Milton. My property was directly affected in my most recent appraisal. I was told as much, when I questioned that property appraisal.
If you don't care about where you live or what you live next to, good for you. I for one, prefer to live in a safe neighborhood with people who take pride in their homes.

Panama. My issue is that this house must sold fairly and openly. I will not make the judgement if it's right or wrong for the city to renovate for a loss but it MUST be done fairly.

Novel concept. Do nothing.

So your point jv, rich and truth is that it would have better served the community to do nothing?
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Janesvillean got it right. Nothing good comes from allowing property to sit vacant and deteriorate. Isn't our Governor doing the same thing by giving tax breaks to businesses and hoping to recoup the money spent by creating jobs. How's that working out?

What's really sad is that while the cast of fools debate whether to accept their epic fail, there will not be one speck of embarrassment or shame regarding this complete waste of taxpayer dollars. They ought to put a headstone in front of these rehabbed houses. "Here lies common sense. May he rest in peace."

The only way this house should be sold is with an open auction!!!!!! Anything else is fraud by our city!!

http://www.youtube.com/watch?v=wsPjL8SUA...

Once again Janesvillean rationalizes the waste of taxpayers money. The requirement that the property does not have to stay owner occupied is simply appalling. How will Janesvillean rationalize things five years from now when the property could be owned by a slumlord and be rented to a drug dealer. Taxpayers may well be subsidizing the exact opposite of what is intended.

The only reason the city spent money in such and obviously foolish and careless manner was because they were not responsible for directly taking it from the taxpayer. They bellied up to the big udder in the sky, the federal government and filled their stomachs with OPM. If the city leaders had to go to local taxpayers for this there would have been pitchforks and molotove cocktails in front of city hall. However since this money came from the feds it has the illusion of being free, falling from the sky, or if you are Obama, you press a couple keys on the computer and just print more money. Just because everybody in the room is eating like a pig Janesvillean does not make it OK or even a good thing. Sooner or later the orgy of drunkeness and debauchery of spending comes to an end and the bill is due. So....who will pay?

Ah yes Janesvillean the ole what about fire protection, cops, and the streets argument. This program is miles from essential services so please try again. But I digress as you did. Let's move back on topic shall we? "Neighborhood stabilization." It sounds noble, good, right, and makes my leg tingle. But how much money will be enough? How many $85,000 failures do we have to have to achieve a stabilized neighborhood? 30? 40? Maybe the city ought to buy and rehab everybody's home before they move in? Think of all the "social good" we could do then! One question Janesvillean. Who pays the tab?

The purpose of this program is not to make money. The purpose of most government programs is, in fact, to spend money and get a social good out of it rather than a profit. In this, government is distinguished from business.
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The goal of the Neighborhood Stabilization Program can be found in its name. It is intended to take a property that was in serious danger of becoming a slum property, return it or keep it as a single family home, and return it to the tax rolls.
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Note that there are three things that happen to properties in this program and one of them is just razing them and selling the property at the appraised value of vacant land, which is also a loss. The point in that case is to eliminate blight.
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I suppose you could evaluate all government programs as if they are businesses, but then what would happen to fire protection and streets?

God I love OPM.

I love it. Only in government circles could this be considered anything but a colossal failure. Epic fail.

I admire the City of Janesville's goals on projects like these. I am a bit troubled that the appraised value of the property is less than half of the investment. This cannot be a self sustaining mission with those end results. I wonder if the grant monies and the city funding would have gotten better results invested elsewhere.