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Old 06-25-2008, 08:16 AM
 
Location: Oak Park, IL
5,522 posts, read 12,720,666 times
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Quote:
Originally Posted by dherkes View Post
Fortunately the zoning laws no longer allow "down"zoning. If you see someone converting their house into an apartment call the zoning enforcement. They will stop it, they have to. I grew up in Aurora while all of that division of the big houses was was going on. It ruined the East Aurora school district by nearly doubling its population, while the tax revenue steam became negative. The city moved very slowly to correct the zoning error - thirty-five years later the effects are still apparent.

It would be better to tear down the big empty houses than to saddle the people who did not overbuild with the debt. I love Sugar Grove. The schools are very good, and the amount of building that occurred was minor compared to, say Plano or Yorkville. The big builders just had to work so hard to keep the planning board happy many of the big developments stalled. Newman, two years ago, now Kimball Hill.
If the economic trends become strong enough, they will overwhelm and overturn zoning laws. In other words, IF demand for these big exurban SFH plummets, the economic imperative to maximize value of these assets for owners will push them to be recycled into other uses (multi-unit housing). Who is going to take the financial hit required to turn an income-producing rental property into an empty lot?

In the end, economics trumps zoning.
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Old 06-25-2008, 08:31 AM
 
38 posts, read 107,209 times
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Quote:
Originally Posted by sukwoo View Post
If the economic trends become strong enough, they will overwhelm and overturn zoning laws. In other words, IF demand for these big exurban SFH plummets, the economic imperative to maximize value of these assets for owners will push them to be recycled into other uses (multi-unit housing). Who is going to take the financial hit required to turn an income-producing rental property into an empty lot?

In the end, economics trumps zoning.
That is where community involvement comes in. Go to the zoning meetings and voice your opinion. The big subdivided houses do not produce a revenue stream if people cannot afford to to rent in an area where they have to drive any appreciable distance to work. Make the process of getting a building permit very stringent. The old houses in Aurora were extremely well made structures - brick & mortar. The empty houses that have just been built will not last all that long. Mostly cardboard and siding from what I can see.

The tax stream from a non-paying house due to either down zoning, or vacancy is the same - zero. What is worse, if the house is down zoned, the revenue stream becomes negative. Depopulated areas also have lower revenue requirements. The demand for the big SFH is already pretty well gone, at least in the outer burbs. How the community weathers the changes will depend on the people who will stay.
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Old 06-25-2008, 09:23 AM
 
11,973 posts, read 28,736,685 times
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Quote:
Originally Posted by dherkes View Post
That is where community involvement comes in. Go to the zoning meetings and voice your opinion. The big subdivided houses do not produce a revenue stream if people cannot afford to to rent in an area where they have to drive any appreciable distance to work. Make the process of getting a building permit very stringent. The old houses in Aurora were extremely well made structures - brick & mortar. The empty houses that have just been built will not last all that long. Mostly cardboard and siding from what I can see.

The tax stream from a non-paying house due to either down zoning, or vacancy is the same - zero. What is worse, if the house is down zoned, the revenue stream becomes negative. Depopulated areas also have lower revenue requirements. The demand for the big SFH is already pretty well gone, at least in the outer burbs. How the community weathers the changes will depend on the people who will stay.
But if demand completely collapses, people will default on their mortgages. If a person bought a house for $500,000 and it's now worth $200,000, most will walk away from the mortgage with ruined credit instead of taking a $300,000 hit that they could never escape. The bank will then own too many houses and won't be able to sell them. There will be no "community involvement" from concerned homeowners, becuase the concenred homeowners will be long gone. Banks and the remaining property owners will no longer want to live in the ex-urbs, but they will be stuck with property--and they will want to get the most out of their investment. And this is when zoning laws will collapse.

So, encourage your political respresentation to support research into alternative-fuel vehicles! We're going to need cheap hydrogen (or whatever alternative fuel wins out) to keep the ex-urbs going after oil becomes too expensive or scarce. This may not happen in my lifetime, however. Or maybe we'll all just work from home and grow our own food.
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Old 06-25-2008, 09:50 AM
 
Location: alt reality
1,084 posts, read 2,064,856 times
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Quote:
Originally Posted by Lookout Kid View Post
Or maybe we'll all just work from home and grow our own food.
You know, this could very well happen during our lifetime. I know my employer just introduced alternative work shedules where you could work 4 days for 10 hours and have the 5th day off. They also provide shuttle service for employees commuting from the city. So, if things get too outrageous a lot of companies may have to look into these kinds of options, including letting people work from home.

I can't answer the OP since I'm not a suburban dweller but, it will be interesting to watch how things pan out over the years.
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Old 06-25-2008, 11:48 AM
 
1,156 posts, read 3,415,651 times
Reputation: 487
Default I'm missing something...

Fortunately the zoning laws no longer allow "down"zoning. If you see someone converting their house into an apartment call the zoning enforcement. They will stop it, they have to. I grew up in Aurora while all of that division of the big houses was was going on. It ruined the East Aurora school district by nearly doubling its population, while the tax revenue steam became negative. The city moved very slowly to correct the zoning error - thirty-five years later the effects are still apparent.

Can someone connect the dots for me?

How does this turn the tax revenue stream negative?
Aren't the landlords still paying taxes?
And don't more people = more sales tax?
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Old 06-25-2008, 11:51 AM
 
38 posts, read 107,209 times
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Quote:
Originally Posted by Lookout Kid View Post
We're going to need cheap hydrogen (or whatever alternative fuel wins out) to keep the ex-urbs going after oil becomes too expensive or scarce.
I think you'd better read Lavoisier. Matter cannot be created or destroyed, only conserved. Making hydrogen will consume more energy than will ever be released. I am afraid the same goes for ETOH as a fuel. . .

The banks, I mean the big commercial underwriters, have already lost, by some estimates, 1/2 of their worth since 2000. The zoning laws will not collapse. The value of the houses was not real. That is the point of a "bubble" bursting. The gains, now seemingly lost, were not real money.
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Old 06-25-2008, 11:54 AM
 
38 posts, read 107,209 times
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Quote:
Originally Posted by cdc3217 View Post

Can someone connect the dots for me?

How does this turn the tax revenue stream negative?
Aren't the landlords still paying taxes?
And don't more people = more sales tax?
Not at all. The people who moved into those houses did not pay the real estate taxes. The landlords did that. The people who moved in had more kids in the school district than the facilities could handle. Sales taxes do not benefit the schools.
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Old 06-25-2008, 12:06 PM
 
1,156 posts, read 3,415,651 times
Reputation: 487
Quote:
Originally Posted by dherkes View Post
Not at all. The people who moved into those houses did not pay the real estate taxes. The landlords did that. The people who moved in had more kids in the school district than the facilities could handle. Sales taxes do not benefit the schools.
OK, this is obviously a net loss for the public schools' revenue stream, and I don't mean to minimize that -that's huge.

But the city itself didn't have a negative revenue stream, then, did it? The landlords are still paying their taxes, right? And a little sales tax goes to the city coffers, yes?
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Old 06-25-2008, 12:15 PM
 
11,973 posts, read 28,736,685 times
Reputation: 4596
Quote:
Originally Posted by cdc3217 View Post
Fortunately the zoning laws no longer allow "down"zoning.
I'm saying the zoning laws will be changed in my ex-urb apocolyptic scenario. If there is no more demand for large single-family homes and the people that own such homes do not live there anymore, the government will respond to the wishes of property owners. More than likely you'll have a bunch of old McMansions that are empty and deteriorating due to the poor construction quality--or have been torn down. Perhaps the vast open spaces will return to nature or farming.

Aurora existed as a town before it became a Chicago suburb, so it's a different scenario from the ex-urb cornfields of western Will County. I have a feeling that places such as Aurora will simply densify around public transportation nodes. It's almost it's own population center, afterall.
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Old 06-25-2008, 01:01 PM
 
38 posts, read 107,209 times
Reputation: 11
Quote:
Originally Posted by cdc3217 View Post
OK, this is obviously a net loss for the public schools' revenue stream, and I don't mean to minimize that -that's huge.

But the city itself didn't have a negative revenue stream, then, did it? The landlords are still paying their taxes, right? And a little sales tax goes to the city coffers, yes?
The city has nothing to do with the school district. Sales tax is collected by the state, and apportioned to communities. The reals estate taxes are assessed by the township assessor, and collected by the county. That tax money goes to the schools. Not sales tax, sorry.
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