City Council needs to protect Plainfield's interest in the proposed tax breaks for the Senior Center condos, especially given the sketchy nature of the Robinson-Briggs administration's proposal.
After nearly four years, it has become clear the Robinson-Briggs administration is averse to doing real homework in advance of floating proposals (dare I say IN WRITING?) that would anticipate the issues involved and questions Councilors might ask.
The proposed tax break for the condo buyers is just another example, beginning with the apparent 'walk-on' of the proposed ordinance.
Saying that condo buyers needed an incentive in this market, Corporation Counsel Dan Williamson fielded questions raised by the Council. Eventually the public learned that the tax break was proposed for actual condo owners, not the developer; that the abatement was for five years and would require the payment of only 40% of the assessed valuation of the condo properties; and that the Council would be able to tinker with the conditions.
As I heard Council President Burney talking about how important the proposal was while waving the 'bloody shirt' prospect of the units becoming rentals, my Realtor® brain kicked in.
What about the importance of protecting Plainfield's interests?
Here is some tinkering the Council should consider that would protect the rest of us from being scammed --
- Require that buyers be qualified for their mortgages BASED ON THE FULL TAX ASSESSMENT, not the rebated amount. Why? We don't need to have buyers whose viability would be at risk were they required to pay the full tax freight. (Mortgages use a formula called PITI -- Principal, Interest, Taxes and Insurance -- to calculate how much an applicant is qualified to borrow.) If it's to be an ENTICEMENT, make sure it's for FULLY-QUALIFIED BUYERS ONLY, and not a gimmick for lowering the quality of buyers.
- Second, NO TAX BREAKS FOR NON-RESIDENT OWNERS. Let's not subsidize speculators who buy and then rent out the unit. And put some teeth in it: Require certification of residency, with both revocation of the privilege and criminal perjury charges facing cheaters.
- Third, PUT PENALTIES IN PLACE FOR PREMATURE SALES of the abated units. In other words, the tax break should be for legitimate buyers who plan to stay in the unit at least five years. That means NO FLIPPING. Sale of the unit before the five-year marker could be penalized by requiring the FULL TAXES ON THE UNIT TO THE DATE OF CLOSING to be paid to the City at the closing table out of the sales proceeds. An even stricter proposal would be to require payment of the FULL FIVE YEARS' WORTH OF TAXES for any premature sale.
There is no reason Plainfield should play the 'foolish virgin' in any development schemes.
Posts
12 comments:
A bit of self advertising, but I would call your attention to my post today, and Maria's yesterday. You are more lenient than I would be, but your conditions are a basic minimum. If the politicians are not going to protect the citizens we must keep them accountable.
Why do they need an abatement at all to purchase these condos, Dan? If they can't afford the place, they should go somewhere else to buy. That's the way it goes. I know people who bought in Meadowbrook Village and they aren't getting an abatement. There's at least a couple of units at Meadowbrook right now, and those folks deserve the same break for buying in Plainfield as people who might want to purchase one of the Monarch condos. What about my break? I have lived in Plainfield for a long time and I don't get a tax break. This is inherently unfair, and I can see the city opening itself to several lawsuits based on this harebrained scheme. The only way that this type of proposal would be fair would be to give EVERY homeowner and purchaser in Plainfield the SAME break. But what would happen to our city then? As much as I respect you Dan, I don't think this kind of incentive is fair. A lot of us are struggling to pay our taxes, and to give newcomers this kind of break is a slap in the face to the rest of us. I think the developer has to eat this. There's no reason that the real estate company can't just work that much harder. When their exclusive listing agreement expires, why not give the option of the condo listings to all the realtors in Plainfield, creating competition? Then, they would all work hard to get the condos sold. As it is now, there is no reason for all the other realty companies in town to steer their clients to these condos. I am offended that Burney would say something so scary so soon. He seems to have no faith in Plainfield. What does this do to all the other residential redevelopment projects the mayor has been trying to float over the past few years?
I agree with all of your suggestions relative to preventing absentee owners and "flippers." But I think the 5-year clause is simply too stringent. I would not buy a condo with that kind of clause. What if my employer suddenly moves me - or fires me - so I have to sell, unexpectedly? I could see a one year clause accomplishing essentially the same goal, without off-putting prospective buyers.
Dan
And why are we giving a tax abatement at all? We already gave them the land!
If the units are not selling, the deveoper should lower the price, or renegotiate the sales commission, or whatever! But not come back to us for further subsidies
As it is, and as pointed out by P&F Management in a press release, prospective buyers already have a subsidy from the Feds in the form of a tax credit:
"The historically low interest rates, coupled with the price-points of these units, makes this is an outstanding opportunity to purchase a new home in an up-and-coming neighborhood.”
Another benefit to buying a home in 2009 is the federal government’s new housing allowance. Approved as an amendment to the new economic stimulus plan, the incentive gives a tax credit of 10 percent of the purchase price, up to $15,000, to those buying a home this year."
The full press release can be seen here:
www.pandfmanagement.com/press_2-1-09.htm
Antonio
Dan,
The tax break is another sub-prime mortgage gimmick to get the developer off the hook and put the tax payers of Plainfield on the hook. It maximizes the developer's profit and a 100% sell out. Plainfield politicans give great lip service to market prices vs. subsidized prices; so, lets hold their feet to the fire and that includes Councilman Rashid Burney. Call it what it is - subsidized housing. Why doesn't Directer of Public Housing and Rahway Councilperson Jenny Maier have these sub-prime projects in Rahway? Has anybody asked the Plainfield Tax Assessor her thoughts on the pros & cons of this "ponzi scam?" It is hard to believe she would give it her backing. Why? Where does it end? For example, there is a new house on Woodland Avenue priced at $465,000; the builder is asking for a similar tax break. Is this another example where Plainfield politicans give lip service to attracting upwardly mobile families? Looks like it. This subsidy tax proposal would only fly in a pay-to-play community like Plainfield where the hard working tax payers are being asked to take it in the pocket so the developer with close ties to the Union County Democratic Party can profit from his less than thought out flawed project.
There shouldn't be any tax abatement. It's wholly unfair. The selling price should be dropped further to attact buyers. The only reason a tax abatement is being considered, IMO, is simply because this is a project backed by the Union County Improvement Authority. How many failed projects does the UCIA have on its books these days? Poor taxpayers everywhere.
I must agree with the previous comments. I am a homeowner and I have lived here 11 years, and with the current economy, it is all I can do to keep up my mortgage, taxes, PMUA, utilities, upkeep etc.
Either give us all a break, or nobody. As commented above, let the developer eat it. Period.
Dan,
I suggest you are supporting the tax break because Cory and Adrian voted for it? GIVE ME A BREAK!! To TAX BREAK - UNLESS I TOO GET A TAX BREAK.
AMAZING HOW TIDES SHIFT IN PLAINFIELD. I SEE THE VIRGIN MARY DAN DAMON ALRIGHT! IT AIN'T WITH YOU!
Lower commissions ??? Now you are talking treason my friend !!
Dan, your ideas are great. At least you are proposing SOLUTIONS to this matter. The Robinson-Briggs administration, on the end of the Assemblyman's strings seems to have none. Strangely enough, the Assemblyman is challenging candidates on solutions to problems he and this administration has FAILED to address over many years. My only regret Dan is that you are not on the payroll. You are working for free by giving them ideas on how to solve the problems they have been elected and are paid to do. Keep up the great reporting but don't do the job of THINKING for this incompetent administration.
No, No, No, NO...no rentals, no tax breaks..NOTHING. LET IT GO BACK TO THE BANK. If that doesn't put the fear of God into the developer I don't know what will. It is NOT fair.
Dan,
Your suggestions are a best case scenario. In reality, it sounds like an acommodation to a flawed project that hard working, over burden tax payers of Plainfield are being asked to subsidize. Enough rationalization. It is time to say no-no-no to the political machine of Plainfield and its pay-to-play factotums-including Monarch Construction. Monarch, like the rest of us tax-payers,can wait till better days - when these condo units will command $400,000-now isn't that wishful thinking.
Post a Comment