Getting property taxation right

Why isn't the purchase price the permanent valuation for the length of time you own it?

Only in Dayton is the $10K house a reality

Are you your neighbors keeper?

Every week I look at the listings of homes sold in Montgomery County and marvel, because only in Dayton can you buy a home for less than the price of a nice used car.

This doesn’t happen in surrounding communities (other than the depressed ones- Jefferson, Trotwood) . Do you wonder why?

It’s all supply and demand would be the perfect capitalists answer. But, what drives demand?

In real estate 101 they say “location, location, location” – and people choose communities based on the schools. And to some extent this is also correct. Yet, my house, bought for $14,500 in 1986 is worth close to 10x that, and a slightly larger home 2 doors down, just went for the same amount 7 years ago. It shouldn’t have sold that low, but it was a foreclosure. And, my property value dropped- not just because the price was low, but because of the cancer that moved in.

Four doors down, a house sold for $95K 3 years ago. The new couple put at least $40K into it before splitting. It sold in a day- price unknown, but for well over $125K. And my property values are sure to go up.

Yet, I didn’t change locations, and my schools still suck. My investments in my house shouldn’t penalize me with higher taxes anymore than what my neighbors do. The value will come to me, and to the community, when I sell.

How and why do the actions of others affect my property values? If I own a share of stock in 3M, does my value go up just because Apple had a great year? No. Yes, if I go to sell my car, and someone else paid X for a similar car- that’s the price- but, I’m not selling my home, I just want to live here. Why should my value change until I do something?

Simple answer- it shouldn’t. And, this constant re-valuation of real estate based on the actions of others is causing gentrification, housing bubbles, foreclosures, and a mangled economy.

The purchase price of an owner occupied home shouldn’t change until the house is sold. The same should be said of rental property. When the government steps in and raises your property value for taxation purposes, they become an uncontrollable variable in a business equation. They distort markets. They screw existing businesses and property owners when they offer tax abatement to the new guy, while the long term investor gets shafted.

And, it’s almost counterproductive to do improvements to your property, if the tax man is just going to charge you more. But, what could be worse? Your neighbor doing improvements.

Case study: Dr. Michael Ervin, shadow mayor of Dayton before he left town for Scottsdale AZ, bought a dump of a bar in the Oregon District and poured $1.6M into it. This skewed the valuation tables for his neighbors, who were thankful the bar left, but were asked to pay more for Dr. Mike’s excess. Some, couldn’t pay the additional taxes and were forced to sell or move. Others might have spent more on a crappy house, because Dr. Mike did what he did. The market skewed. But, 10 years later, when it came time to sell, Dr. Mike got less than half his money back on his taj mahal. Yes, it’s still double the value of any of the other single family homes- and still skews things, but, the only person paying the tax on the new market rate evaluation- $725K , should be the new owner. Just as the neighbors who never left, shouldn’t have been forced to pay more when the $1.6 boondoggle went in.

The reason we pay property taxes is supposedly to support public infrastructure and government to keep our investments safe. Income taxes are supposedly a more progressive tax that are supposed to be based on ability to pay. When property taxes unfairly start to penalize people for making a long-term investment that they hoped to keep- it’s wildly unfair, un-American.

The fact that almost every office building downtown has been foreclosed on, while tenants have moved to fairer pastures funded in part by tax dollars- with more advantageous tax structures (both income and property tax) like Austin Landing is proof positive that our property taxation and income taxation hodge podge is causing more problems than it’s helping.

The value of the Kettering Tower, once the premier office space in Dayton, was decimated by Dayton’s high income tax (now 2.5%) and property taxes based on market forces beyond the owners control. Would Austin Landing have looked so good, without the huge investment in infrastructure by the county, or the income tax free zone for white collar workers (while the retail underclass pays 2%)? Probably not.

It’s time to realize that tax policy and abatement has serious consequences to the entire region, and we need to find a way to level the playing field and stop letting the choices others make, affect our tax rates.

Regional tax policy, from property to income tax, needs to be set and managed at the county level, and by fair market forces, for all of us to live within our means, and to stop changing the playing field in the middle of the game.

 

Just say no to Amazon HQ2

Say no to Amazon HQ 2, sad amazon logo

Just say No to Amazon HQ2

If your city thinks it should offer incentives for Amazon to come to town, it’s time to reevaluate your leadership.

Sure, landing an HQ for a corporate behemoth is prestigious, and  can put any city on the map, but, to offer incentives to one of the richest companies in the world, that has been stealing from local coffers from its inception?

If you are looking at empty retail developments, a hollowed out downtown, declining sales tax receipts in the last 15 years- thank Amazon. It’s not that they did anything wrong, it’s that they did almost everything right- including putting pressure on every small business (the true job creators in America) to cut margins and compete on an uneven playing field.

An uneven playing field that is just made more uneven when our leaders are willing to bend over and offer their rear ends for a reaming with a smile. There is a reason Amazon has to make more room outside Seattle- they can’t afford to stay there. They’ve already driven the housing and office markets into the stratosphere, they’ve pushed the limits of infrastructure, they’ve caused more troubles than they’ve solved- all in the name of “winning” at the capitalist trough.

Don’t worry, they aren’t alone. We’ve seen it time and time again- as companies that don’t pay taxes like General Electric leverage their “job creation” into tax free offices in places like poverty stricken Dayton Ohio. Or watched companies like Boeing move their HQ from  Seattle to Chicago. NCR did the same to Dayton- and now their stock is worth less and their CEO makes more.

It’s not governments job to subsidize and coddle business- it’s governments job to provide a safe, healthy, clean, secure and well organized platform for communities to thrive. Business is only one part of that equation. It’s time to put a stop to corporate welfare.

What’s laughable is that despite not clicking on any of the boxes of Amazon’s dream list- Dayton thinks it should be in the running. This coming from a city manager who has repeatedly failed at “economic development” projects- the Wayne Avenue Kroger debacle, where years and millions of tax dollars went into actually devaluing a community, in order to lure a store that was supposed to come- however, she’d forgotten to get that in writing. On the other- the hole on Ludlow- City Manager Shelly Dickstein gave millions to developers who didn’t do anything but promise to do something- even stiffing the demolition company that ended up owning one of the historic gems of Downtown. And then she had the nerve to insist any developer of the vacant space which the city still owns- has to buy the demolition companies building as entry to the deal (how this isn’t illegal is beyond reason).

Let’s see- Dayton doesn’t have over a million people, it doesn’t have an airport with the connections, it’s lacking in quality education (no, you can’t move 50,000 people into the Oakwood School district), we don’t have a highly educated workforce ready to switch jobs (counting the base is laughable- many of those people have contracts with the US Government that aren’t really negotiable). The list goes on.

Only the Dayton Daily news would even write about this pipe dream without laughing. The New York Times did an analysis and came up with Denver, other smart publications have also done their filtering and come up with other communities- none in Ohio.

The attraction of jobs that pay six figures landing in your city with an income tax is mouth watering, however, the chances of landing them in a city with a 2.5% income tax on top of a state income tax is slim. Especially when Denver does it without any income tax.

At some point, Ohio needs to grow up and realize that allowing this state to be a ridiculous patchwork of local fiefdoms all trying to stay in power and support the friends and family plan of the Ohio Political Caste is keeping us from competing. You can’t have 28 jurisdictions in one county, and 88 counties in a state that’s losing population and clout at an alarming rate without thinking “we’re doing something wrong.”

Nationally, this country needs to just put an end to “economic development” incentives that support big companies over small ones, and make the playing field uneven and unfair. Did the residents of Georgia even get their $100 Million they invested to lure NCR there back, before NCR asked for another handout to move within the State? Doubtful.

If you read George Orwell’s “Animal farm”- this line should come to mind: “all animals are equal, but some animals are more equal than others.”

The Narcan® roundabout

In this Wednesday, Sept. 7, 2016 photo released by the East Liverpool Police Department, a young child sits in a vehicle behind his mother and a man, both of whom are unconscious from a drug overdose, in East Liverpool, Ohio. Drug overdoses killed a record 3,050 people in Ohio last year. AP Photo.

In this Wednesday, Sept. 7, 2016 photo released by the East Liverpool Police Department, a young child sits in a vehicle behind his mother and a man, both of whom are unconscious from a drug overdose, in East Liverpool, Ohio. Drug overdoses killed a record 3,050 people in Ohio last year. AP Photo.

A small business I work with has had the Dayton Fire Department stop by almost every other day- because someone OD’d in their parking lot. The other day it was a city employee. The medics revealed that when they looked him up- they found out that he had been treated the day before as well. If a Narcan® revival was a frequent flyer bonus, we’d have people with miles to go to the moon and back.

Current practice is to revive them, offer treatment, which they refuse and let them go right back to using.

That would classify it as insanity- doing the same thing over and over and expecting a different result.
I wrote a post about Narcan, coincidentally, 2 years ago to the day: “Just say no to naloxone” I was chastised in comments. And in the two years, we’ve just seen massive increases in overdose deaths- turning Dayton into the Heroin epidemic epicenter of the nation.
Two friends of mine, who are former journalists (the real kind- no longer employed by the Dayton Daily news) went out on an assignment from a foreign publication to do a story about the heroin problem. Within 30 minutes, they’d taken a photo of a roadside sign offering treatment- and followed a DPD ambulance to an OD victim in a parking lot of the U-haul franchise. Photos, story- the works- easy peasy.
In my last piece I spelled out the societal costs of heroin and overdoses- and they still apply. The drain on resources puts your life in danger- while the paramedics are out dealing with a self-inflicted wound- you might have to wait for a ride while you are having a stroke or heart attack.
Save and release ain’t working.
It’s time to change the way we do things. The first time you qualify for a trip back from death, you are taken to clinic where you are held for four hours, where you have to watch a video explaining the new practices and procedures on Narcan- and given a chance to enroll in a treatment program, offering methadone, Suboxone, Naltrexone, Vivitrol etc.
You are also informed that the next time you need to be revived, you will spend 24 hours in the center. There will be round the clock counseling available, but, you won’t be receiving any medications that aren’t prescribed as part of a doctor supervised program.
Third visit, you’ll spend 3 days in the center. Fourth visit, a full week. Fifth visit, a month. At the end of the month, you will have an option to voluntarily stay in a highly supervised treatment program for up to a year, or walk.
Unfortunately, after the fifth visit, you will no longer be revived by safety personnel. If you are unidentifiable as a five time loser, and are being treated for the sixth time, you will face a mandatory 1 year mental health incarceration. This isn’t in a prison, but a secure treatment facility. There are no options for appeal, or release. If you are identifiable by the medics, treatment will not be administered.
Drivers licenses or state ID’s will be “punched” with each treatment- as reminders and for medical personnel to check.
Right now, we are kidding ourselves if we think we can arrest suppliers and take enough drugs off the street to solve the problem. All the posturing of law enforcement is an insult to our intelligence. Heroin addiction isn’t a criminal problem- it’s a mental health one. Yet it does cause massive increases in crime and threats to public safety.
What we can do is seize all assets of anyone caught with what we would identify as quantities to distribute- and use the proceeds to fund the treatment programs.
Of course, the other option is to stop kidding ourselves, and just start providing addicts with safe, inexpensive heroin and take the profit motive out- and give people who want to stay high permission- no judgements. This has been done in other countries and has cut crime and deaths considerably. There are people who are able to function in society while high- this is nothing new- my paternal grandfather was a PhD MD and a morphine addict his entire adult life.
If you have any better ideas, feel free to leave them in comments.
It’s time to stop the insanity cycle of save and release in Dayton Ohio- it’s not working.

I’m David Esrati, and I don’t approve this message

David Esrati portrait 2016

I took my own mug shot.

It’s happened a lot recently. Randomly, I’ve connected with someone who said “Aren’t you David Esrati, I read your blog.” Not necessarily read it every post, but, have read it. One of my hockey teammates even said it was helpful to him when he looked for “Where to get Baklava in Dayton

A very pretty, sweet woman walked up to me, and said she was touched by the piece I wrote in the Dayton Daily news about the Kettering Ice Rink. When I asked her name, she said she was nobody- and only gave her first name.

A conversation in Kroger yesterday turned to politics, and I was asked again- am I done running? Right now, I’m running a business, taking care of elderly parents and 5 pieces of real estate, and then there is this book I’m neglecting right now. I’ve yet to see a whole bunch of people show up and say they want to help me run. I also had to hear again about how our County Auditor thought it was OK to make me the punchline at the Dems’ big fundraiser. It didn’t sit well with some of the people who buy tickets to these things because they lobby- not necessarily agree with the party and its politburo of friends and family.

Others tell me, you need to stay out of politics. Retire the blog. Just concentrate on your business. Make money.

But, then the brilliant minds at Cox- owners of the newspaper, a TV station they call “the leader” and a bunch of radio stations- decide to can 27 people in copy editing- and hand it over to some farm team. I’m the son of a copy editor- and know how important it is that the people editing the people reporting the news actually know the city, the people, the players and even the pronunciations of street names, and if it’s a council or a commission- and if the mayor can vote or not on an issue. I guess their buy-one-give-away-five subscription plan failed to boost eyeballs- like everything else they do- other than give us better quality content- meaningful content.

This Tuesday is the most important primary I think I can ever remember in my lifetime, and could be one of the most pivotal in our country’s history. In a country where less than half the people vote- and less than half of those vote in primaries, we let a very few people chart our course, while we all bitch about the outcomes.

I get pissed when I get an email from the Montgomery County Democratic Party, of which I’m a member and on the central committee- telling me to vote for Hillary. I don’t recall a vote at any meeting where we decided whom to endorse.

You should get pissed too when people tell you who to vote for. But, you should get even more pissed when people just don’t vote. To think Nan Whaley was elected by such a small proportion of our population- is testament to how screwed up our system has become.

Everything I’ve done with the close to 2,500 posts I’ve published here- is to try to make people think, to engage, to make them more aware of what, who, and why our city is where it is today. Tuesday, you can do your part to set a course for our country’s future.

And, I’m not going to tell you who to vote for. But, for me- the only two candidates I’m sure of are Bernie Sanders and PG Sittenfeld. I just wish I had other choices in other races- and knew that I wasn’t going to be one of a small number of people setting the course of this next election.

And, while I can think of other things to do, instead of writing this blog- I can’t imagine living in a city where the only source of news and insight is coming from one place run by imbeciles.

Love or hate me, I am my father’s son. He, with the master’s degree in Political Science- and the knack for language, and the many years of reporting real news, and teaching his son the importance of checks and balances provided by the “fourth estate.” Today, the old man turned 89, and he’ll still find something to fix in this post after I finish.

Happy birthday pops.