Hucksters diverting taxes into speculation: Land Banks

The people who live in Dayton don’t have much money. The people who work in Dayton, who were taxed without a say in the matter do have money, but many of them are skedaddling to tax-free havens of the townships and places without an income tax. The craziest part of this new order is the area around Austin Landing where some people pay taxes and some don’t- depending on if your collar is white or blue (and for the life of me, I don’t know how they figure out who pays and who doesn’t).

So when money gets taken from the good people of Dayton and our guest workers to take care of city business- the money should go to the things that people are expected to pay taxes for: police, fire, roads, street lights, parks, public area maintenance, infrastructure, zoning and building code enforcement, etc.

But, instead, a great deal of it is being spent on things that aren’t really for the public good, things like empty buildings that someone may want, or building spec buildings that someone may occupy, or trying to patch problems caused by our lack of attention to the things we’re supposed to do right in the first place.

In a healthy community, people invest because they feel safe in their investment and believe there is a real return for their money. In an unhealthy community, you see disinvestment and decay. While fighting decay can become a city’s focus, it’s treating the symptoms, not the disease itself.

Land Banks take tax dollars that should be used to deliver top-notch services and spend them on buying up blight. The blight happened because other areas became more desirable- because of better schools, nicer parks, lower taxes, more land, newer homes, better shopping, etc. and people and jobs moved out. It sucks when the grass actually is greener in your neighboring communities.

For Dayton, the major cause of the economic segregation happened when school busing was implemented. People with kids, who could afford to move, did. Busing in Dayton was the best thing that ever happened to the suburbs. People like the Hubers made a fortune off new homes for new families who were escaping Dayton. Busing was a perfect example of government intervention gone totally wrong. I think Land Banks are a similar #FAIL.

Across the street from me are three small cottages that were built around the end of WWI. Supposedly, by a family, where the parents lived in one, and each kid got their own. The lot would normally hold 2 houses, but has 3 instead. I bought numbers 2 and 3 in 1996, because I couldn’t stand the tenants the slumlord was renting to. I overpaid to get control of the street. When the slumlord saw what I did to the houses, he couldn’t understand. His economic model was to buy shit and rent it as shit to Section 8-supported people and take as much money out as possible. My model was to provide housing that I’d be willing to live in, to nice tenants at a fair price.

I invested in quality of life, he invested for a return. That’s the fundamental difference in cities like Kettering, which strives for good schools, safe neighborhoods, clean, well-kept parks, and an abundance of amenities like the Fraze, the Rec with an ice rink, Delco Park, the Skate park, etc.

Dayton’s “leaders” are looking for a return on investment. They will do anything to attract tax dollars, including mortgage our future. They also, have to keep people happy who pay for very expensive political campaigns. They like people who tear things down and build new things. They abhor those who maintain the status quo, or are just getting by, because they, and their donors, don’t get a chance to take a scrape (“”scrape- a term used by mobsters to indicate their share of the deal just for being in charge/feared)

Back to the three cottages. Number 1, had been cheaply rehabbed by the same slumlord who sold me numbers 2 and 3, and sold to a young couple. They put a second mortgage on it, and were trying to keep it in decent shape until they broke up and she ran off with his friend. Next he lost his job, moved away and it sat. Along the way it lost most of its guts- the furnace, AC unit, water lines, wiring. Racoons, cats and rats moved in. It was vacant for a long time. He started to have problems paying the taxes, and finally, before the tax man took it- he sold it for a dollar and the tax liability to a neighbor of mine. The taxes were about $5,500 for a 1,000-square-foot house, with nothing remotely right about it.

It needs a new roof, a paint job, windows, doors, utilities, and it’s still valued at $30,000 for taxes. This is where the disincentive to invest comes in. If it was worth $30,000, why wasn’t it sold for that? If it’s going to take $30,000 to get it to that value, why spend it? If we want our population to grow, or for our properties to be reclaimed, is it better to spend $10,000 tearing this down which will give us an empty lot worth nothing? With zero tax recovery. Or to reward resident investors for their hard work?

While collecting the past due $5,500 may seem like a big win for the county, it does nothing for our community if that money is taken and turned around and spent on tearing down another building or buying one on speculation that it may be rehabbed and reoccupied. Spend that money on giving our community a unique competitive advantage like true fiber gigabit Internet. Build that system and you have a true competitive advantage that can’t be had anywhere in the state at a reasonable price, and you may see more people willing to invest in Dayton.

Instead of patting ourselves on the back for collecting the $5,500, write a contract with the investor, that if he or she lives in it for five years, the taxes are waived. And, as long as the house is their primary residence, they property is valued at the purchase price. Instead of spending money to pay Tyler Technologies  (the company that sets property tax values for the county) to try to make it more expensive to live here, we should be working to make it more desirable to live here.

Figuring out the value of real estate for taxation purposes shouldn’t be that difficult. Nor, should it be a system where you are penalized for improving your property. It used to be easy to estimate the value of rental property before the advent of credit default swaps and other Wall Street swindles that caused the foreclosure crisis. The monthly rent was equal to about 1% of the property value. If we started using real world valuation for property taxes, and focused our efforts with public dollars to provide for the general public good- we’d start to see investment again, without government intervention.

Taking your tax dollars from you, to buy other property is legalized robbery. Allowing banks to kick people out of homes and not maintain them in the same condition as when occupied is criminal and costing all of us through decreased property values as wealth is sucked out of our community. The banks got us into this mess, by using our properties as collateral for their speculative investments. Now, our local government is trying to tell us that if they run a bank, buying up property, we’ll be better off too. Horse hockey.

Government isn’t and shouldn’t be in the business of buying real estate for speculation. Nor should government be part of the process of stealing homes based on unreasonable and arbitrary tax valuations.

Until cities realize that tax dollars aren’t to be viewed as a return on investment, but instead as the profits from creating a valued and viable community, we’re screwed. Invest in quality of life and delivery of service. Protect the homes and investments of the people who are here, instead of asking them to pay to clean up the messes of those who’ve left. And remember that the cost of acquisition of new taxpayers is much higher than keeping the ones you already have. Then we may start to cure the problems, instead of treating the symptoms.

 

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8 Responses

  1. Marianne Stanley January 1, 2014 / 7:48 pm
    WOW!  Now THAT is a column that every voter should read because it not only clarifies the problems plaguing our cities and their root causes but also demonstrates why we need YOU as a Dayton decision maker/leader!  What a different city Dayton would be if you and people who share your knowledge, vision and dedication to our community were making and implementing policy! You are right…so many who live in the city are in dire straits, desperate for enough money to feed their children or keep their car running when they cannot get work. The basketball nets indicate heart….a “fellow-feeling” so sorely missing not only in Dayton but throughout government in the U.S.   Let me just say I admire you and what you stand for and hope you will someday have the opportunity to restore Dayton to what it usedto be -a city that valued its residents and their wellbeing!
  2. bobby January 2, 2014 / 7:46 pm
    All Montgomery County property owners retain the right to file a formal complaint against the valuation of their property with the Montgomery County Board of Revision. Complaint forms must be filed between Jan. 1 and March 31.  Forms are available on the auditors website or at the county building.
     
  3. Rob Vigh January 3, 2014 / 12:10 pm
    I agree with most, except you should probably avoid blaming the banks. As they are most often enabled by the government, the blame so to say, pretty much resides with the government.
  4. Rob Vigh January 3, 2014 / 12:17 pm
    And why does bobby get thumbs down for providing a factual piece of data that could be utilized by anyone wondering how to contest their valuation? Who clicks these thumbs, seriously! Thank you bobby.
  5. Gene January 3, 2014 / 1:47 pm
    The thumbs down are too close to the thumbs up if you are using a touch screen. I have huge hands, after all I am 6 ft 9 in tall and I have expanded to 310 lbs. I really was 280 for the last twenty years. So I almost always hit the wrong button.
     
    btw I blame government for most everything that is wrong in our society today. Taking my dollars for whatever reason is theft. 
  6. David Esrati January 3, 2014 / 5:22 pm

    Well Gene and his fat fingers can’t account for more than one thumbs down- so ?

    I’ve received some other documents via email on this topic- that I’ve not had time to read, but will- and may add something to the discussion.

  7. Anonymous January 4, 2014 / 5:07 pm
    Gene has it mostly right, except that I would call taking money and resources without consent “extortion” instead of theft.
    Esrati, it is a wonder that you recognize that private interests exploit the government and use it as a tool to abuse and further their own agendas, yet you do not see that it is the government’s involvement in the first place that allows them to do this. How hard is it to connect the dots that the government and the banks are colluding, and in some cases are even the same people??

    DO NOT increase regulations on banks! Anything that is agreed to will only help them! Hell, don’t even bother with “deregulation” – it will not result in any change, and only serve to temporarily placate and be abused in its own right. GET RID OF THE STATE. YOU DO NOT NEED THEM. Allow voluntary trade and community upkeep to occur without extortion, coercion, and state violence.

  8. David Esrati January 4, 2014 / 6:19 pm

    @Anonymous- welcome- but, you could find a better name for yourself. Anything goes here- as long as you stick to the same one.
    Unfortunately- I don’t believe that getting rid of the State solves problems.
    I think that pre-deregualtion, banking did OK for about 60 years- after we straightened things out as a result of their last grand move- which caused the original great depression.
    Yes, Government and Banks and Insurance companies and Wall Street are playing around with money- and people are getting crazy rich- and crazy poor. It’s because our government has been co-opted by money in politics.

     

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