...buy property in the province of Minneapolis. Not surprisingly, however, given the inclinations of the Minneapolis City Council, they want to do just that.
MInneapolis, Minn. — The Minneapolis Advantage is an effort to stabilize neighborhoods hardest hit by the foreclosure crisis. It would pay homebuyers $10,000 to buy properties in certain inner city neighborhoods.It's not a new concept. Some neighborhood groups have been offering similar incentives for years, and they say the city plan can boost their efforts to encourage homeownership.
The Minneapolis Advantage is still in the planning stages, but if adopted by the City Council later this month, there will be 50 loans available for qualified buyers to purchase a home in any of 18 neighborhoods.
Minneapolis City Housing Director Tom Streitz recently presented details of the plan to members of the City Council. He says the neighborhoods chosen for the program are areas that have high concentrations of boarded and vacant homes.
"We know that investors have come into some of these neighborhoods, and essentially flipped these properties over and over again. They've inflated the value," Streitz said. "They've stripped the equity, and in many cases they've stripped whatever quality materials were left in the house, and left devastation in its wake."
Streitz says the program may not be able to completely prevent a repeat of that scenario, but there are some safeguards.
For example, the loans will only be available to individual homebuyers, not corporations. The homebuyer has to live in the house and commit to staying there for five years. After that point, the loan will be forgiven. {...}
Ok, so not only is the City of Minneapolis considering offering interest-free loans to people whose religion bans them from applying for "traditional financing," they now want to pay people to buy up houses in one of the worst neighborboods in the city. And by "worst" I don't simply mean that the neighborhood is blighted because the houses are old and no one wants to upgrade, I mean "worst" in the sense that this is one of the neighborhoods that regularly earns the city the moniker "Murderapolis." It may be quiet now, but that's only because it's too cold for the crack/coke/meth dealers to go out and shoot one other. As soon as it gets warm outside, the melee will start afresh. And, if one should choose to take the city up on its generous offer, and the bullets start flying because the same city council won't fund the police department adequately, you wouldn't be able to move your family to a safer location because that would violate the terms of said cash payoff.
You might as well as someone to move to Mogadishu and tell them they can't leave when the warlords start rampaging. Again.
Mr. H, who is in the relocation business and knows something about real estate, and I were chatting about these same houses over the weekend, and he said that everything worthwhile in these houses has been stripped, either by flippers, or by squatters and thieves who moved in after the properties had gone into foreclosure. That means there is no plumbing in them, or electrical wiring---both are made of copper, and copper is particularly valuable right now---appliances, windows, furnaces, or wood, even, because if there were salvageable hard wood floors, those were stripped out for use elsewhere. They're just shells, and there's no way in hell that a $15,000 "incentive" renovation loan is going to bring these properties back up to code. Which, of course, the city will fine you for violating.
Then you have to remember that you'd be buying property in Minneapolis, where the property taxes are high, and I'm fairly certain there wouldn't be any sort of break on those particular taxes. Never mind the fact that, in the province of Minneapolis, you pay your taxes and you get squat in terms of city services, like plowing when it snows---and even then, they're more likely to tow your car than to actually get around to plowing the street---or even garbage removal (everyone in the Twin Cities has to pay to have their garbage removed. No one gets a pass on this one.), or even police, because they're strapped as it is stands. What anyone who decides to take the city up on its offer will get, however, is incessant, and expensive, meddling in their affairs. City inspectors will show up and will fine the bejeezus out of these people. They'll have to pay up the wazoo to get any renovation plans approved. And, of course, the property tax bill will, of course, go up when they make renovations and increase the value of the property.
Why would anyone, in their right mind, consider this to be a worthwhile endeavor? You know, other than the city of Minneapolis, that is.
This is just about as predatory as some on the City Council, or elsewhere, would claim the subprime mortgage market was.
Posted by Kathy at March 13, 2008 09:22 AM | TrackBack