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City Hall

Highberger will push for mortgage tax to pay for affordable housing

Critic says it will result in a price increase for homes

January 24, 2007

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City Commissioner Boog Highberger said this morning that he will actively begin to lobby the legislature to increase the state's mortgage registration tax.

Highberger said he'll seek an increase in the tax - which is paid every time someone buys a home and files a mortgage with the county's Register of Deeds - in order to provide the city with funding to implement affordable housing programs.

"I think using this tax for affordable housing programs is a very common model around the country," Highberger said as part of a meeting of the city's Housing Needs Task Force, which he chairs.

The current tax is 26 cents for every $100 worth of mortgage that is taken out on a piece of property. All but a penny of the tax goes to the county's general fund, while the one cent goes towards a state historic preservation fund. The 26 cent rate is charged in every county in the state.

Highberger said he wants a bill that would allow individual counties or cities to add onto that tax, if they agree to use the new tax revenue to fund a housing trust fund that would provide assistance to people in need of affordable housing.

How much of a tax increase the city will ask for hasn't been determined yet. But the Housing Needs Task Force said it wants to establish a housing trust fund that would receive $500,000 per year in operating funds.

Some members of the task force said they were opposed to a mortgage registration tax, and predicted that it would not receive legislative approval.

"The political reality is that it would be an uphill climb at best to get something passed," said Bill Yanek, a representative of the Lawrence Board of Realtors, who also is a member of the task force. "You could argue that this goes at cross purposes. If you want to increase housing opportunities, why increase the cost of purchasing a home? That's what this would do."

Highberger said he'll begin working with city staff members to craft a bill and seek a local legislator to introduce it. He said the bill likely would have to be introduced by the first week in February to have a chance to be heard during this year's legislative session.

Comments

Steve Jacob 7 years, 11 months ago

We pay enough taxes for tenants-to-homeowners, which is a good organazation. And it would NEVER pass statewide because most of Kansas has affordable housing.

HoosierPride 7 years, 11 months ago

How is a tax on mortgage that is paid for by the new homeowner going to help people afford houses. It is actually going to make houses more expensive. What is he trying to pull?

Mortage Costs going up does not help those trying to by a house Boog. I don't care if you do start a fund with the tax increase. This only helps a few people. Especially if you're only getting $500,000 a year to give away for those in need of buying a new home. What does that get you in Lawrence, two or three homes.

tolawdjk 7 years, 11 months ago

Let's make housing less affordable for everyone so we can make it more affordable for the few?

Does that leave a net result of everyone being homeless?

commonsense 7 years, 11 months ago

9 people now have their hats in for city commission. Here is your chance to do something about guys like Boog!

Raider 7 years, 11 months ago

commonsense nailed it. Let's vote this looney out of office in April. Lawrence needs affordable housing, but a mortgage tax is not the way to go about it. Housing is overinflated in this town b/c the board of realtors and the developers have such a tight reign on things. You allow developers from KC and other cities to come in and compete and things will get better. Additionally, let real estate agents from the city come in and sell homes instead of locking it down to just Lawrence agents only.

Luxor 7 years, 11 months ago

I voted for him once, but never again.

JerkStore 7 years, 11 months ago

We have an affordable housing area...Its called Topeka.

Hoots 7 years, 11 months ago

Why is it that everytime the Three Amigo's see someone else do something they thing we have to do it. I wish Boog would see someone jump off a bridge then maybe he'd follow.

I'm so sick of the government finding new ways to pick my pocket. They have outpaced inflation by a factor of anywhere from 2-5 times with valuation increases on real estate year in and year out for the past 15 years and now they are crying about how broke they are. My question is where has all that windfall gone? Most people in this city would love to just keep up with inflation. What a jerk. It's my money BOOG...NOT YOURS. Stop trying to take it away from ME!!!

Sigmund 7 years, 11 months ago

What he didn't mention is all mortgage registration fees must be paid in "Boog Dollars."

On a related note does anyone have a Boog Dollar they would sell me? List it on eBay and please send me an email!

Bud Stagg 7 years, 11 months ago

Boog, you just don't get it. We don't need more taxes, we need more taxpayers. Quit making it so damned expensive to live here, attract some businesses and housing. You are doing everything backwards.

You have raised the living wage and driven away business. You want to raise the impact fees and taxes and are starting to drive away the property owners and developers.

skinny 7 years, 11 months ago

Boog isn't thinking as usual. He is out of there next go around, I'll bet money on it~!!

JustLovingIt 7 years, 11 months ago

Schauner/Boog/Rundle want impact fees that will increase how much a home costs. Now Boog wants to tap into the home buyers for more tax? Does this mean they want to build more round-abouts?

If the City of Lawrence can't fund it's budget with the resources they have, with years and years of property tax increases and valuation increases, maybe its time to tighten the belt and stop spending money on studies and round-abouts.

My goodness people...its time for change!

Jackson 7 years, 11 months ago

The reason for "unafordable housing", especially in central Lawrence (but not restriced to it), is because over 4,000 houses in SF zoned neighborhoods have been converted into the the rental business, which automatically makes them worth (& sell for) 50% more.

If the city commission get the guts to prohibit rental to more than 2 unrelated persons in SF zoned neighborhoods, there would be plenty of affordable housing.

ilovelucy 7 years, 11 months ago

Raider: any agent can come in to sell a home in Lawrence. I'm not quite sure where you came up with that statement. It's a matter of agents marketing themselves. Now, there are restrictions between states but a test and fees can take care of that. Also, there are developers from KC and Topeka that do business in Lawrence. What ARE you talking about?

midwestmom 7 years, 11 months ago

Oh - HECK No. The middle class is dying over this stuff. Good by Boog and hopefully the rest of the squish heads who can't fathom an original solution ...

ASBESTOS 7 years, 11 months ago

I think a recall of the "booger" is in order. I hope he does not work at KDHE with this level of dieregard of the law, economics, and common sense.

Sigmund 7 years, 11 months ago

Jackson, explain to me how prohibiting more than 2 unrelated people in a rented house would DECREASE the demand housing??? Seems to me if three or more people were living in a rented house, 1 would have to leave and find a new house INCREASING the demand for housing. Without an increase in the supply of new houses, prices will go up.

The way to get more affordable housing is to increase (or grow) the supply, or decrease the demand (ie make Lawrence so unattractive that people leave and no new people want to move here.

classclown 7 years, 11 months ago

Maybe he figures his time is up and he plans to go out in flames.

budwhysir 7 years, 11 months ago

Well, this is interesting, another proposed tax increase that is covered by a dried up housing market. What do you think of that fellow citizens?

So what happens when we have affordable housing, then what I suppose our taxes will go down? Ya right this way they can always say there is not affordable housing.

oldgoof 7 years, 11 months ago

actually, it is a pretty novel idea in my mind. Pretty non-regressive. Yes Marion, taking from the rich and giving to the poor is income-redistribution.

budwhysir 7 years, 11 months ago

Rt please dont be so appologetic, I mean how hard is it to talk about our local commisioners and not sound political? Politicaly speaking of course.

Look, the playing field of politics is somewhat like that used by college football teams, the game is the same no matter what stadium you are in, the only difference is the amount of money donated to the cause.

Anyway, many times I find my vision blurred untill I find my glasses or contacts. And on Saturday morning you can forget it because I usualy dont get in untill late friday night. Politicaly speaking

just_another_bozo_on_this_bus 7 years, 11 months ago

Looks like all the math wizards have been busy posting tonight. (sarcasm)

budwhysir 7 years, 11 months ago

Bozo, Im actualy pretty good at math, and Im not seeing things add up around here so I think you might make a good point here. Thanks for the input

hottruckinmama 7 years, 11 months ago

who in the he!! names their kid boog?

as i take it this would be statewide? where i live we are already paying to expand sewer and other services to the $200,000.00 plus home crowd. not to mention paying higher property taxes to build the newer schools that they demand. now we would have to pay a higher fee when buying a different house to make housing more affordable for other people? geez maybe all the middle class should just give up there jobs and there houses and go live in a shack and draw welfare.

just_another_bozo_on_this_bus 7 years, 11 months ago

"Bozo, Im actualy pretty good at math,"

Apparently not--

"The current tax is 26 cents for every $100 worth of mortgage"

That amounts to about .26% tax, which is about 1/30 of what the current sales tax is in this city. While a tax increase is a tax increase, it's just absurd to assert that a small increase in this tax will hit anyone so hard that they can't afford to buy the house they want.

Anyone recieving housing assistance from this tax will recieve considerably more than whatever increase in this tax might be.

just_another_bozo_on_this_bus 7 years, 11 months ago

In an economy that is inherently unfair, it's amazing how worked up people get about "unfair taxes."

Sigmund 7 years, 11 months ago

More importantly, name a inherently fairer economy ....

just_another_bozo_on_this_bus 7 years, 11 months ago

"More importantly, name a inherently fairer economy ...."

That would be any other of the larger industrial democracies in the world.

budwhysir 7 years, 11 months ago

HMM Im wondering if it is worth it to debate this with you bozo

Sigmund 7 years, 11 months ago

What makes any of the larger industrial democracies fairer? If this country is so unfair why aren't millions of people streaming out of this country to all the other larger industrial democracies?

budwhysir 7 years, 11 months ago

How worked up ARE you about your taxes bozo??

bearded_gnome 7 years, 11 months ago

with, higher unemployment, slower growth, less incentive for investment, fewer benefits to investers who create new jobs, lack of personal incentive in a cradle to grave care system, taxes that make work into slave labor, often higher suicide rates... those are those other "inherently fair" economies. thank you, thank you very much.

budwhysir 7 years, 11 months ago

Ya, what bearded gnome said but politicaly speaking

bearded_gnome 7 years, 11 months ago

bud, politically speaking of course, vote NO on Boog. if people want to vote for the Boog, they should write in "Bigfoot."

debating the Bozo is usually pointless because he will very quickly devolve into name calling or blatant obscenity. poor sap, he lives on these boards.

budwhysir 7 years, 11 months ago

Ya I get along with everyone so a little name calling never hurts me, I have heard it all. I sometimes wonder if we are the only ones that know speak politicaly on politics.

budwhysir 7 years, 11 months ago

Bozo seems to have nothing to say, did he get off at the last stop.

bearded_gnome 7 years, 11 months ago

politically speaking, I think all the air is out of his little balloon.

budwhysir 7 years, 11 months ago

Maybe he just forgot to tie the string to his wrist and accidently let go. Or someone could have taken it from him, politicaly speaking.

Im surprised at how many people hate it when I speak politicaly last time I saw that plumber guy he was worried about all the political talk.

cowboy 7 years, 11 months ago

If they would take the 1.5 million they are throwing away on the T each year they could fund the program , set up an endowment and be off and running.

bearded_gnome 7 years, 11 months ago

absolutely oppose this "new" old program of wealth distribution. hope people take note, and vote for others! besides, just who does the Boog think this will appeal to anyway, since we're in a political season?


while mayor, Boog once said: "its just a little pot."

sorry, couldn't resist.

budwhysir 7 years, 11 months ago

Cowboy, politicaly speaking, that money could not be used for this matter. It would actualy be looked at as personal property instead of real estate. This means we would only be able to use that money to make sure that we had affordable motor transporation in lawrence. Politicaly speaking

bearded_gnome 7 years, 11 months ago

yes, Bud, I saw how that plumber's-crack guy was being "mr. crankypants." think his plumber's toolbelt is on waaay too tight.

Godot 7 years, 11 months ago

It really bothers me that Highberger wastes the time and resources of city staff on projects that are doomed from the beginning, and that are not even in the job description of city commissioner. Boog's problem is that he wanted to be governor, or even president, maybe even ruler of the world, but he had to settle for being a lowly Lawrence City Commissioner.

Godot 7 years, 11 months ago

"Well, this is interesting, another proposed tax increase that is covered by a dried up housing market. What do you think of that fellow citizens?"

Makes as much sense as when Sebelius increased the cigarette tax in an effort to simultaneously help the budget and force people to quit smoking. Problem with that is, as people quit smoking, the tax revenue dries up. At least we can always count on Democrats to give us a laugh or two.

Bladerunner 7 years, 11 months ago

Wow! I never knew Bill's nickname was Bigfoot. Cool!

bearded_gnome 7 years, 11 months ago

well said Godot, and the general impact of this would be to raise the price of homes and purchasing homes. yet, there's always the concern for "more affordable housing."

sometimes, I just wonder did these people have some basic economics in their college classes, or just all hate-dead-white-maleism classes, touchy-feely group hug classes, and blameamericafirst classes.

bearded_gnome 7 years, 11 months ago

righty, I do understant that bigfoot is well qualified for the PLC/GRA city commission candidacy: he hates wal-mart; is a big back to nature fanatic; he hates development; Bigfoot has zero understanding of markets and economics; and is big and smelly. if he also has consorted with Hilary and Barbara, then that would give Bigfoot some political gravitas and connections, too.

just_another_bozo_on_this_bus 7 years, 11 months ago

"Note that Boog does NOT OWN A HOUSE in Lawrence, he rents."

As with most everything else in this thread, that is wrong.

Jamesaust 7 years, 11 months ago

For once at least, I find Bozo to be the voice of sanity.

My guess is that the average person living in Lawrence in their lifetime might take out an average of something like 3 mortgages. In other words, this tax applies 3 times. Every hour of every day of every year one is not taking out a new mortgage (99.999% of your life) is a "tax free" period.

And the tax on each mortgage-holder is so small as to barely be worth noting. The average sale price in Lawrence last year was $155k. Assuming 100% of this is mortgaged and there's no equity or money down - virtually impossible - the tax is already $403 (again, one time). Guessing an increase of $0.04 ($0.30 total), the additional tax for this purpose is $62 (again, one time).

People, if you want to moan about taxes, shouldn't you focus on taxes that add up to at least the value of a suit from Kohls or an airplane ticket to St. Louis (or one gas-tank fill-up for your SUV)?

Besides if you don't like this tax/tax-subsidy, then do you favor the IRS' major tax subsidy - the mortgage deduction? (Polls say 82% of you say yes.)

What's different about this plan for aiding the needy in owning their own home than the same income tax subsidy that has existed for half a century - and frankly has helped put the roof over the heads of most of the readers here?

Is it because Boog's plan is lower class welfare and the IRS income tax subsidy is middle class welfare?

bearded_gnome 7 years, 11 months ago

Godot, I meant to add this old saying "if you want less of something, then tax it more."

UKept 7 years, 11 months ago

Jamesaust: I got roughly those same figures, using the 2000 Kansas Census figures and house pricing stats. Granted it's a rough figure, but proportionally it works out to be approximately $61 per mortgage registered in Douglas County. Considering the average first time buyer is already looking at appx. 90-95k in mortgage this addition isn't going to break the bank. And though I'm not sure just by reading the article, it doesn't appear that it will affect people who are remortgaging.

The only people I can see who may truly be affected by it, though again it's nickel and dime stuff, are those who purchase multiple properties to rent. They may incur a registration charge each time, though I'm sure they'll have no problems offsetting this by increasing the rent to their tenants.

My biggest concern is that if the impact seems slight to those being taxed, will it be of signifigant benefit to those for whom it's intended. $500,000 a year for affordable housing doesn't seem particularly helpful. Even at 20% under the average rate (again 2000 figures, bear in mind), that's only 7 1/2 digs the city could pick up for people. This is again hard to figure out based on the article, which doesn't provide much detail as to how the program works.

Godot 7 years, 11 months ago

Jamesaust, in my work I have seen people take out new mortgages on the same house several times in just the last few years, to get a better interest rate.

Godot 7 years, 11 months ago

Ukept, I believe that, when it comes to mortgage registration tax, a mortgage is a mortgage.

Godot 7 years, 11 months ago

The $500K would buy houses for 20 families per year, if they used the money to buy houses that are for sale in rural Kansas.

Of course, we must realize that the $500K will be reduced by the salaries and benefits for an administrator and staff, so, really, there will be only about $350K (if that) left for actual housing.

Godot 7 years, 11 months ago

Maybe the goal is to build an endowment, similar to KU's. In that case, they would only use 4 of 5% of the $500,000 per year to support housing; the rest would go toward salaries, and the trust fund.

What a ripoff.

thelonious 7 years, 11 months ago

The problem of affordable housing in Lawrence is in the process as we speak (or write) of working itself out. It is being "solved" by the local homebuilding community, which continues to build empty houses even though there are hundreds of brand-new homes in Lawrence that have been sitting unsold and unoccupied for most of the last year. Drive up on north Monterey and count them - there are at least 30 or 40 in the new subdivisions on either side of north Monterey. They have been sitting empty since last summer. These are currently "ghost" subdivisions - there are houses, but no one lives there. What this continued increase of housing inventory is doing, of course, is cratering prices of existing houses. Way to go, Lawrence homebuilders - you are singlehandedly solving the affordable housing problem (well, you and your lenders).

I wonder how long the lenders will continue to finance the construction of more empty homes - or maybe the homebuilders have made so much money over the past ten years that they are investing their own money. At any rate, my strong suspicion is that housing in this town will get a lot more affordable (i.e., lose value) over the next few years before it resumes going back up.

Of course, the lenders will try to blame city hall/taxes/regulation/Al Gore/liberals (pick one).

bearded_gnome 7 years, 11 months ago

$350,000, Godot, that's awefully optimistic and relies on a level of efficiency not yet seen in these endeavors.

Godot 7 years, 11 months ago

"Godot:

There are entire TOWNS in Western Kansas which can be bought for FAR less than $500K!

Thanks.

Marion."

Smithville would be one of them. But not for long.

budwhysir 7 years, 11 months ago

So we will pay a tax to fund a group to find out how we can have affordable housing???

So we will pay money to see how we can save money???

Wouldnt affordable housing only be affordable if your income was able to keep up with tax increases???

How would people on a fixed income be able to pay more money to fund a group to find out how they can save money???

Buy now pay later program?? Reduced taxes in 2050 after all those who payed in are gone?????

Godot 7 years, 11 months ago

Did you know that there are more people in poverty in the US than anywhere in the world? Of course, poverty in the US is defined as being in the lower percentage of the highest earning economy in the history of the world.

As long as poverty is defined as being the lowest 10% of all earners in the country, then we will always have poverty.

As long as "affordable housing" is always something less than the housing that is currently available, we will always have "unaffordable housing."

Remember when "a chicken in every pot" was the goal?

budwhysir 7 years, 11 months ago

I am sure that the term AFFORDABLE can not be defined by a group working with other people money that was collected thru a tax system.

It is too easy to look at something and say yep, best way to make money is to bring more money in. So, the answer will be, ok we have a job that is going to last for 5 years, during that 5 years we must establish the guidelines for affordable housing, how much do I want to make for doing that???

This will be the starting words in determining affordable housing, how much does it cost to define this term

bearded_gnome 7 years, 11 months ago

yes, the poor in the u.s., even the homeless have it better than the average citizen of the average country around the world. how many of the poor have televisions? how many have cable to the televisions? how many have at least one car in their household? the poverty pimps of this country do their charges a disservice by exaggerating the problem, and often misapplying language, catastrophizing a situation that doesn't deserve it. yes, housing is more expensive in lawrence than just about all other cities in Kansas; how to fix that? two paths: big government intervention, 'government will save you' "we're from the IRS, we're here to help you;" or, do things to actually cut the costs of building, mortgaging, selling, etc., those homes. again, what I said above, some of these leaders seem bereft of basic economic education.

bearded_gnome 7 years, 11 months ago

Godot, if you're buyin' one of those towns, you going to rename it "Godot" or "godotville? or "waiting for Godot?" would be cool, and you'd have your own zip code too.

bearded_gnome 7 years, 11 months ago

Hey, Godot...we got questions on this thread for ya'!

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