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.

 

The man behind the curtain is now backing bike share

Mike Ervin liked the idea when I first told him about bike share back in 2009. So did Andy Williamson- when I brought Bcycle from Boulder to the first Miami Valley Bicycle summit.

I took a slide deck out and presented it to, or talked with Dr. Hopkins at Wright State who loved it. Dr. Dan Curran at UD and I discussed over lunch in his private dining room where he seemed noncommittal, and people at Premier Health (who would be the ideal advertising sponsor) have had the proposal in their hands for years. Same goes for Sinclair, where Dr. Johnson has no interest in talking to me about it (he’s still mad that I’ve said Sinclair shouldn’t be in Warren County unless they pay a tax like we do to subsidize it- but, that’s another story).

RTA had a copy too- with Mark Donaghy liking it, but not sure about how it qualified for Federal transportation dollars (the Schuster Center got over $4 million from RTA and Federal dollars- more than enough to pay for an entire bike share system). It’s also been passed around Miami Valley Regional Planning Commission where it was filed in the good-idea-but-we-don’t-really-do-much bin.

It’s been on my campaign literature too- but, enough about what I’ve been doing for the last 4 years- now, it’s Andy and Scott making the rounds with the backing of Dr. Ervin, the man behind the curtain:

Andy Williamson, 32, and Scott Murphy, 34, share a love of recreation. Williamson is a regional director for the International Mountain Bicycling Association and Murphy is a recreational bicycle rider and mechanical engineer at Wright-Patterson Air Force Base.

As representatives for Bike Miami Valley, an organization that advocates for bicycle-friendly public policy, the two are making the rounds of government officials, planning organizations and private business groups to discuss their research paper, “Miami Valley Bike Share Feasibility Study.”

It will be unveiled to the public Friday at the Miami Valley Cycling Summit in Springfield. The event is sponsored in part by Cox Media Group Ohio, owner of the Dayton Daily News. They provided an advance copy of the study to this newspaper.

Mike Ervin, co-chair of the Downtown Dayton Partnership, said pending new downtown housing units, including hundreds of student apartments planned for the old Dayton Daily News site at Fourth and Ludlow streets, as well as newly-created bike lanes on major arteries like Brown Street, would help make a bike share program a success.

via Public bike rental system proposed for Dayton area | www.daytondailynews.com.

Bicycle sharing systems are a game changer for Downtown parking, where people would no longer be tethered to parking in the core to get to buildings with limited or more expensive parking. It also makes possible housing, where people could live without the need of a car- since bikes that can haul groceries are readily available. I’ve ridden bike share bikes in London and Paris and know how easily these systems can transform your mobility.

BCycle called it a “magic bike” because when a system is installed with critical mass and effective re-balancing of the system, there is always a bike at hand. Besides being great for the environment compared to cars, it also encourages healthy exercise. Maybe now that Dr. Downtown has blessed my idea, we will see it happen. You can read much more about bike share in Dayton here: http://esrati.com/category/bike-share-in-dayton-ohio/

Dayton Region Rally Nov 17 – they want you to come!

The Dayton Development Coalition- doers of evil no-bid contracts to congressman’s wives, are trying to clean up their image- and holding a feel good hoo-hah at UD arena.

A partial list of speakers:

  • Kellen Winslow, Athletic Director at Central State University and NFL Hall of Famer
  • Joe Sciabica, SES, Executive Director, Air Force Research Laboratory
  • Stacia Edwards, Director, Regional Workforce Transformation Consortium
  • Sean Creighton, Executive Director, SOCHE and DaytonCREATE
  • Dr. Tom Lasley, Dean, UD School of Education, Edvention
  • Dr Mike Ervin, Oregon District – Downtown Dayton Plan

They want you to go to this site and sign up:

We’re all in charge of our future, so let’s make it a positive one.

Join others in our community and become a part of this exciting event that highlights our regional strategy for growing jobs and celebrates all the opportunities available in our area. Hear how others are achieving success in the Dayton Region, and learn how you can get involved and do the same

via Dayton Region Rally.

I’ll be there. You should too.

Dayton’s next leaders; part of “The Esrati Plan”

The Dayton Daily News says everyone who is qualified, has left for the suburbs. How wrong they are.

As part of the Esrati plan, and if elected, it’s my primary job to find, recruit, mentor and help the next leaders of Dayton.

No more unopposed candidates, or incumbents (that’s right, I want a primary even if I’m the one in office), no more excuses for not voting because you don’t have good choices. And, I’ll host candidates’ nights like no others, with the candidates engaging in real debate- where they ask each other questions, not this moderator, controlled Q&A stuff. It’s time we see how well candidates think on their feet, and stand up to tough questions, different questions, and so that going to every event brings out new material- not the same old tired stuff. (I’ll even give candidates 5 minutes to explain their positions at the beginning, and at least 3 to close).

With all that said, the other goal is to have a City Manager who has a number 2 and a number 3 person trained and ready, to step up to the position, if they can’t get the job done. It doesn’t mean they have to leave the city, they just may not be suited to being City Manager, our most important leader. (The military rotates generals all the time- and the system works fine.) No more national searches, it’s the job of our leader to develop his replacement, just as it will be mine.

So, with all that, I’d like to introduce someone to you whom you may or may not know. I didn’t know him before tonight, but after he pulled me aside to give me some advice, I asked, why don’t you run? His answer was next time! These are the kinds of people I want to champion, and help:

Dayton Original: John A Lumpkin, Jr.

Born at Good Samaritan Hospital, John A Lumpkin, Jr., is a true Dayton Original. Mr. Lumpkin is currently a manager of Chase Bank on North Main St. in Dayton. The Lumpkin family has deep roots in the City of Dayton. All of Mr. Lumpkin’s uncles and his grandfather worked for the City.

Mr. Lumpkin credits the City for providing an opportunity for his family to thrive in this region and feels he owes the City a debt of gratitude for his success. Mr. Lumpkin is a proud 4th generation Dayton native. After graduating from Trotwood-Madison and going to The Ohio State University on athletic scholarship, he brought his teammates home to run both football and basketball camps for Dayton Youth.

Mr. Lumpkin believes that for the city to change the overall perception, its natives must go out into the world and bring back, and implement, the successful practices from around the globe here in Dayton.

Mr. Lumpkin immediately got involved in his community first by graduating from Parity Inc.’s black leadership program. Shortly after that, he ran for the Northwest Priority Board, and is currently serving his third term. Mr. Lumpkin is also a member of Kappa Alpha Psi Fraternity Inc., Joshua Christian Ministries, The Dayton Urban League Young Professionals, and The Trotwood YMCA board. Mr. Lumpkin has been a mentor for students in the Dayton Public and Trotwood-Madison schools.

He has had interns from DECA, Dunbar, and Trotwood in his office to promote financial literacy in our youth. Mr. Lumpkin has an unswerving loyalty to his community. Mr. Lumpkin lives in Dayton View Triangle with his wife, and they are expecting their first child – the next Dayton Original.

via Dayton Originals: Stamp Collection.

Since this bio for Dayton Originals was written, John and his wife now have an 8 month old. He’ll be ready at the next election.

I’ve called before for candidates for Mayor, suggesting that Dr. Mike Ervin stops running things from behind the stage and steps up, and that Col. Colleen Ryan, USAF Ret., would make great strides in projecting a city with confidence.

Another great candidate for Dayton City Commission (and I have many more in mind) is serial developer Jim Gagnet. He’s served as a council member in Tipp City for 8 years, and he’s made his mark in Dayton as one of the original developers of “The Diner on St. Clair” (now Vex nightclub on St. Clair), many buildings in the Oregon District and South Park, co-owner and developer of Coco’s Bistro, and owner of Pacesetter Painting. You’ve seen his handiwork as the painting on the Oregon railroad overpass, the Neon Movies mural, and the sides of numerous buildings. He’s a no-nonsense renaissance man, who has made things happen over and over in the 15+ years I’ve known him and has a track-record of proven “economic development” in Dayton (mostly in-spite of city bureaucracy).

Do you have future candidates in mind? Are you one? I’ve been assembling the online data tools to help you win without the assistance of the ruling political party. It’s time we cut the puppet strings and elected independent visionaries who have new ideas and are elected by the people, not by a system that’s unfriendly to anyone but party insiders.

That’s part of my plan, and one of the reasons I’m asking for your vote November 3.

Rashad Young to leave Dayton for NC: the real issues

The mark of an excellent leader is that he has a capable number two ready to step into his position.
That’s not the case with Mr. Young, however, he’s hardly to be faulted. We have a city manager form of government, with a part time mayor. Someone needs to tell that to Mayor McLin- who has made every effort to keep Mr. Young out of the lime light- or to let him do his job.
However, McLin is no different than Mike Turner before her, and Clay Dixon before Turner, and Paul Leonard before Dixon and… well, that’s as far back as I go.
If Young had been allowed to do his job, we’d know more about what he was, or wasn’t capable of.
It’s unfortunate that Young will leave before the citizens have a chance to vote at least two new faces to the commission. His announcement comes at the same time we learn that the city is facing a $20 million deficit. It’s going to take a strong leader, who knows our community. We can’t afford to bring in an outsider.
We have the talent here. I’ve already suggested Colleen Ryan, now with the Dayton Development Coalition. Other options, David Bohardt (who didn’t run for Mayor this time), Dr. Mike Ervin (he’s already doing so much- why not pay him for it)- and now that we don’t have a residency rule- there may be a lot of other candidates available.
The most important change we can make is to help Mayor McLin retire, and empower the new City Manager to lead and do their job. Otherwise, it’s futile.
Best of luck Rashad- hope they give you a chance to really manage a city in North Carolina.