David Jacobson (1st Ward, DeKalb) is looking at new construction with bleak eyes of the current snapshot in time. If DeKalb has 300 build-ready lots it will take 150 years to sell them, he said.
Residential new construction has been pretty bleak since 2008 and almost flat lined since 2010. There is good short term reasoning behind Jacobson’s thinking.
But in 2005 DeKalb issued 351 single family building permits. That year ended with a 3.7% unemployment rate in the city. In June 2013 DeKalb had an unemployment rate of 10.3%. Those were living wage jobs lost in the construction, professional, financial and retail sectors. Hearing that it will take 150 years to build 300 new homes in the largest city in the county had to be pretty bleak news for all those concerned.
If DeKalb has 300 lots that’s not enough inventory to support the projected $20 million in new construction EAV annually from 2008 to 2028 needed to keep the debt payments affordable to residents. In 2008 the anticipated real estate tax levy impact for a homeowner with a property valued at $200,000 was projected at about $22-27 dollars per month.
That ascending sucking sound taxpayers are hearing grows louder and more expensive with each passing flat year in new construction EAV. Maybe that’s why Ron Naylor (5th ward, DeKalb) has an unfamiliar urgency in his voice of support for the Irongate annexation proposal.
Naylor was one of the key role players in the 2008 $110 million referendum drive. He was on the Finance and Facilities Advisory Committee when the bond debt repayment rates were discussed. The housing starts projections used to predict the annual $20 million in new construction EAV came from the City of DeKalb.
That projected growth demanded a new police station be built. It boosted confidence to move forward on ReNew DeKalb’s plans downtown and to recruit a developer for the grand NB&T Square project. Soon came a new library and even grander plans for the old central business district.
Maybe Jacobson’s got it right. Stick a fork in any new construction plans until the Economy Fairy returns with her magic wand. Or maybe he’s wrong. A large number of un-and-under employed are sure hoping he is.
Meanwhile the clock is ticking and the taxes are going up on a steep incline.
Where’s plan B o’ visionaries?
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Special thanks to Mark Charvat for uploading this segment of the DeKalb City Council meeting. Questions: Was the motion to reconsider proper? Was the motion to postpone the reconsideration legal? What’s your Plan B?
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8 Comments
It just goes to prove how local government doesn’t get it when a city alderman wants to see the new library green certified. The costs to have a building certified green by Leeds is an exhorbitent cost. These same alderman says that it is a small price to pay to wear the little shiny badge saying that we wentngreen on the construction. You can build green all day but why do you need a plaque and a piece of paper to say it is Leeds certified. Hell, I pay to have a plaque made up saying this building meets Leeds requirements. Let’s stop spending money stupidly!
LEEDS Gold certification is one of the most prestigious awards an architect can have someone else pay for. Could add $1 million in unnecessary soft costs to the project.
A what does that $1 million price tag amount to over life of the Bond? LOTS!!
You are correct Lynn. The high density “projects” on the northwest part of DeKalb was a completeoversight by the City of DeKalb in fact if I am not mistaken, Edens Gardens did not pay any school impact fees even though the fee structure was passed and in place. Somebody sure dropped the ball on that one.
Remember this when discussing Irongate. School District 428 desperately need new construction to raise new EAV revenues to paythe $110 million referendum. Last year the area only had $3 million in new EAV when plans for bond repayment needs to see $60 million in new EAV each year of the bond. The district is already in the red for 2 of the first yearsand $57 million short for last year.
This is the school district’s motivation along with city officials like Ron Naylor who were verymuch instrumental in overbuilding the new high school and now the new police department despiteall the indicators and demographic polls that showed a serious decline in new housing starts and a decrease in property values.
These same officials are now scurrying in desperation to make something happen npw no matter what the cost and burden is to the DeKalb and Dist 428 communities. We need affordable housing but it begins with our local governments doing their part not to keep spending and borrowing this community into deeper debt which they seem not able to understand at all.
One of the more disgusting affronts to transparent government in DeKalb is the “two-by-two” meetings held between those doing business with the City and the aldermen. It is a practice encouraged by the appointed staff as an end around the Open Meetings Act. Probably has something to do with Dave Baker’s, “there’s more than meets the eye” statement. Who knows who is lobbying for and against that project and why. Publicly, Bessie Chronopolous and Paul Sauser has spoken out strongly against it. If you look at the building permit tables note that a high number, 173 total multifamly building permits were issued in 2001. Many of those were built west of Annie Glidden. From late 1999 thru 2001 there was a rush on multifamly units before Chronopolous led impact fees could be put in place. Many were built by Sauser, a few built by Baker. It should also be noted that the seeds of Irongate were planted with the Chronopoulos administration. The developers of Park 88 were recruited to convert Park 88 from a proposed shopping mall to a industrial park for logistics. The total project was a linked development plan. The Bridges of Rivermist was part of the package. I worked on collateral marketing material for Irongate as early as 2004 albeit it was then known as Bethany Ridge.
As you can clearly see with the Irongate project, developers can only build what the city allows them to build. If in the past the city has kowtowed to the will of developers to our detriment, the fault lies with the elected officials because that’s where the buck stops. Time to stop playing “blame the developers” for all our problems.
Thanks for the article, Mac.
It won’t take 150 years for Dekalb’s current lot to sell. That is not true. It is true that Dekalb has allowed unwise and very dense housing to be built near NIU. This did not serve the citizens well, however, it pleased developers who are interested in short term profits. The council needs to make decisions looking at the long term good of our community. We have become a City of low income folks without a sufficient tax base to support the services. Much of the housing near NIU needs redevelopment. It took 30-40 years
to create this problem and fixing it will not be quick or easy.
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It doesn’t matter if new development is allowed to move forward or not. The property tax rate could remain the same as today, without any increases, and it would still be unsustainable for Dekalb’s working class majority. Across the board tax increases for everything else in life, coupled with lower property values and increasing un- and under-employment, are almost certain to push these people over the edge. The relative well-to-do majority on the city council are hopelessly out of touch with the working class majority who are paying for their “wants” and financial extravagance. Property taxes need to be substantially reduced through any means necessary, including plan “B” – bankruptcy, or the foreclosure rate and scorched earth policy will continue unabated. The economic fairy has been permanently bottled and is not returning to main street any time soon. Austerity and artificial scarcity is the new religion.