The Indiana Real Estate News Blog

Major mortgage fraud investgation linked to Indiana

2006-09-28T10:35:00.000-04:00

The Indianapolis Star has just posted a report that an Indianapolis resident is being targeted in mortgage fraud investigation (click here). The report is based on a front-page article in today’s New York Times. Click here to read the NYT article, which begins as follows:

“MARTINSVILLE, Va., Sept. 27 — In a tightknit neighborhood, where people’s social lives often revolve around their churches, Beulah Penn and her daughter, Sharon, were well-connected and trusted. Beulah Penn was a lay minister in a local church; her daughter, Sharon Penn, dressed hair.

Using these connections, according to a recent lawsuit, the two women and another relative in Indianapolis perpetrated one of the largest mortgage frauds in American history, victimizing dozens of local residents and, according to sources with knowledge of the accusations, at least $40 million in fraudulent loans — perhaps even twice that amount.”

Wow. Mortgage fraud is truly an epidemic that leads to bankruptcies, foreclosures, and family tragedies. Check out The Mortgage Fraud Blog, which is a sort of clearinghouse for information on fraud activity around the country.

New flash from HoweyPolitics.com: Gov. floats idea of TABs

2006-09-25T14:37:00.000-04:00

A couple of weeks back we commented on an idea under consideration in Allen Co. regarding Tax Adjustment Boards. You can read that post here.

Brian Howey of HoweyPolitics.com is now reporting that Governor Daniels has "floated" a version of the TAB approach to property tax control during a speech today (click here to see his coverage). There is a lot of merit in pursuing this concept and IAR appluads the Administration for raising the profile of this idea.

UPDATE: Brian Howey's recap of the Governor's comments this morning on TABs is no longer at the link above, but you can click here to read the article Theodore Kim posted on IndyStar.com at 1:55 pm.

Interesting summary of Chicago Fed housing conference

2006-09-25T14:16:00.000-04:00

The Federal Reserve Bank of Chicago has published "Fed Letters" for the month of October. One of them summarizes a conference on the national housing market held earlier in the year. It is a brief but nice overview of changes in the mortgage market, homeownership rates, and home price appreciation. You can read the full document by clicking on the link below:

Developments and innovations in real estate markets: A conference summary

Remember the Tax Adjustment Board?

2006-09-07T15:17:00.000-04:00

Fort Wayne-area blogger and former state legislator Mitch Harper has written before on the Tax Adjustment Board, and a renewed discussion of this concept could not be timelier. Read Mr. Harper’s most recent post here for background on the TAB.

IAR has written before here that perhaps the best public policy element of the controversial “2% cap” is that it creates a shared accountability between taxing units. With mayors declaring “war” on the 2% cap and some legislators indicating that changes will be made, we fear that this shared accountability could be lost in any changes.

In the legislative give-and-take over the 2% cap, Hometown Matters, and property tax relief next session, maybe there is hope for a new system of property tax controls that looks at the overall burden on each taxpayer? Some form of the TAB could be the answer to balance out any new fiscal flexibility for locals.

Leo Morris of the Fort Wayne News-Sentinel wrote a great editorial on the TAB idea yesterday (read it here). Kudos to the Fort Wayne community for putting more good options on the table for the 2007 session of the General Assembly.

New OFHEO data reveals slowdown

2006-09-06T10:53:00.000-04:00

When the news release arrived in my email inbox yesterday, the text accompanying the latest figures from the Office of Federal Housing Enterprise Oversight seemed a bit shocking: "OFHEO House Price Index Shows Largest Deceleration in Three Decades". Click here to jump to the report (it is a rather large PDF file).

Comparing the first and second quarters of 2006, Indiana was one of only five states showing actual price declines. The others were Michigan, Ohio, Maine, and Massachusetts. Massachusetts was a surprise to us, and the 0.72% price decline over the last quarter in Michigan stood out as well.

Matrix, the top-notch real estate blog by Jonathan Miller of the Miller Samuel appraisal firm, has two great graphics that illustrate the latest OFHEO numbers. Click here to see this post.

Using technology to assess property

2006-08-29T10:47:00.000-04:00

The folks over at Talking Taxes, a great blog run by the Citizens for Tax Justice, picked up on a New York Times article about the City of Philadelphia’s use of a company called Pictometry to assess property from the air. This firm can compare old photos of a property with new ones to direct assessors' attention to improvements and new construction without leaving the office. Here is a snippet from the NYT article:

"Scott Yamamoto, the property appraiser for Geauga County, Ohio, which is east of Cleveland, also uses the change-detection feature. The computer, he said, is programmed to look for “something that wasn’t there before, or something that was there before but isn’t there now.”

“We get a list, in spreadsheet form, of all the parcels where there was some type of change,” he said.

Unfortunately, he said, there are a lot of false positives. A pile of sand, or snow on the ground, can trigger the change detector. “Or a boat parked close to a garage can look to the computer like the garage has been expanded,” he said.

But Mr. Yamamoto is not complaining. The first time his office used the change-detection feature, he said, his office “picked up about $1.8 million in property value that we could not see from the ground.”

That translated into $35,000 in tax revenue last year for his rural county."

Click here to read the full article. The blog post on this article at Talking Taxes here provides a link to the webpage of Lee County, FL which allows anyone (after registration) to view the Pictometry data.

On a somewhat related note, Indiana has been developing some cutting-edge GIS technology in the past few years, and I highly recommend you check out the webpage of the state's Geographic Information Council (IGIC) here. We would love to hear if readers know of any Indiana counties using aerial maps or GIS for property assessment. There may be some initial costs to taxpayers, but the benefit of a broader, more accurate tax base probably outweighs the cost in the long run.

2Q-2006 housing market stats released by NAR

2006-08-16T11:09:00.000-04:00

Bubble-watchers in the media jumped on the latest market data releases from NAR this week, as some cooling does seem to be occurring in many formerly “hot” markets. For the Hoosier state, there was both good news and bad news buried in the figures.

The Good: Sales of existing home sales fell nationally, and this has been the major point in most media coverage (see this AP piece here, for example). But home sales in the Midwest did not fall as sharply as they did nationally, and Indiana actually saw a 4.8% increase from 2Q 2005 to 2Q 2006. Click here to jump to the release document and stats.

The Bad: Some Indiana metro areas included in NAR’s survey showed price declines (although they were slight) for single-family homes from 2Q 2005 through 2Q 2006. Click here for the release on the price appreciation stats.

More thoughts on the 2% cap

2006-08-16T10:10:00.000-04:00

We have written about the 2% property tax cap here before (see this post), but a recent piece by RiShawn Biddle of the Indianapolis Star posted on the paper's "Expresso" blog section reminded us of another unintended (or possibly intended?) consequence of the cap. Biddle writes:

“Another factor lies with the state's antiquated -- and oft-tinkered -- property tax system under which a property tax increase by one of the local governments pulling off the tax rolls can slam the finances of other governments. At the heart of this is the so-called circuit breaker under which total tax increases are limited to 2 percent of assessed value. Since no one completely understands how this will play out over the next couple of years, an IPS tax increase would likely not be appreciated by the city-county government or other agencies, whose efforts to pay for projects may be hamstrung as a result.”

Biddle doesn't quite have the specifics correct-- it is not increases that are limited but the dollar amount that each property owner must pay. The 2% cap was conceived mostly as a simple limit on the level of property taxes. But beyond that, the concept has resulted in giving each taxing unit in Indiana a greater interest in the actions of any taxing unit whose tax base overlaps its own.

In this sense, Biddle is absolutely correct that the borrowing by IPS could directly reduce revenue for other taxing units that overlap its base, such as Indianapolis, township governments, and others.

To illustrate this, let's fast-forward to 2008 when the 2% cap becomes effective for homeowners. In one hypothetical county, no homeowner pays any more than 1.99% of their gross assessed value in annual property taxes. However, if a school plans a major project that would increase the effective tax rate for some homeowners over 2%, then other elected officials will be highly motivated to enter any debate over the project since their own budgets will be impacted.

The future for the 2% cap is uncertain, and some legislators have already called for modifications. IAR hopes that no matter what develops, this element of making taxing units more accountable to one another remains in place.

REALTOR® repsonds to IBJ editorial

2006-08-04T16:48:00.000-04:00

We didn't post specifically on the IBJ's recent off-base editorial since we had just written about HEA 1339 (click here), but we just had to link to the terrific response from REALTOR® Joe Shoemaker. Under the heading "New law not unfair to discount brokers", Mr. Shoemaker writes in the newest issue of the IBJ:

"I have been very disappointed over the last two weeks with items I've read published in your paper regarding changes in Indiana's real estate license law. The first article, written by Tracy Donhardt [in the July 10 issue], implies that the new minimum-duties law is designed to protect full-service real estate brokers and squeeze out limited-service brokers.

No part of HB 1339 prevents limited service brokers from providing such services, as suggested by Donhardt. Just because Broker A decides to raise his fees or change his business model doesn't mean that the state forced him to do so. That's a business decision he made."

Way to go Joe! Click here to read the full letter. IAR had hoped we had set the record straight back in March (click here to read what we wrote back then), but we think that the recent spate of news has been generated by marketing departments rather than real consumer advocates.

Mortgage fraud warning signs

2006-08-04T10:05:00.000-04:00

IAR recently attended a regional meeting of the Association of Real Estate License Law Officials, or ARELLO. Much of the focus was on the mortgage fraud epidemic in the states represented at this meeting. The scope of wrongdoing and the diversity of schemes are truly staggering.

One presentation was by a Special Agent in the FBI’s white-collar crime division who provided a helpful list of “red flags”. Real estate professionals should be on the lookout for these warning signs of mortgage fraud, and the FBI requests that law enforcement be contacted if one suspects criminal activity.

Mortgage Fraud: “Red Flags”

Purchase offer significantly exceeds the listing price
There are an unusual number of addenda to the purchase contract
Last minute invoices are submitted to the closing agent
Unusual expenses are paid by the seller, such as “marketing” fees, large repair charges, and/or charitable donations
“Seller carry” second mortgages are used
Lenders or mortgage broker not willing to commit something to writing
Transactions are not recorded on the HUD1 settlement statement
Mortgage broker does not want real estate professional to contact lender or investor to alleviate concerns

NOTE: These “red flags” could be present during a perfectly legitimate transaction, and this list is only meant to provide general guidance. Each transaction is different and your instincts are likely to be the best indicator of any fraudulent activity.

Local government spending data online

2006-07-31T16:24:00.000-04:00

As you know from past posts here on the IREN Blog, IAR supports efforts to create greater efficiency in local government. One tool that can help us achieve this goal is better data, and the State of Indiana is helping out in this area. Thanks to legislation originally promoted by Senator Luke Kenley (Noblesville), the Department of Local Government Finance is now publishing information on per capita spending by local units. In the long run, these numbers could be successfully used by proponents of future consolidations or other reforms.

Purdue economist Dr. Larry DeBoer wrote a recent column about the DLGF's figures, and you can read it here courtesy of the Carroll County Comet.

To visit the DLGF's webpage and compare spending data for your local units of government with others throughout the state, click here (WARNING: this is a rather large PDF file).

Our take on the "2% Cap" debate

2006-07-20T11:09:00.000-04:00

This week’s Indianapolis Business Journal features an in-depth look at the “2% cap” property tax circuit-breaker passed in the 2006 General Assembly. IBJ reporter Peter Schnitzler turned to IAR for our take on the 2% cap (click here for the full piece):

Legislators love the political results, said Karl Berron, vice president of government relations for the Indiana Association of Realtors. Rising property taxes regularly top the list of constituent complaints. The cap shows voters their groans are heard.

“This is something that’s pretty tangible, easy to explain,” Berron said. “In some ways, you wonder if the more people hear about it, the more they’re going to like it.”

We haven’t written very much here on the IREN Blog about the 2% cap, but it isn’t because we don’t think it is important. It raises critical questions that must be answered (probably in the next legislative session) about acceptable levels of property taxation and whether or not this revenue source should be available to local governments in an essentially unlimited capacity to fund both operations and capital projects.

We realize that there are legitimate concerns, but instead of pointing fingers at legislators we should use this opportunity to build consensus around a viable plan to reduce property taxes and provide some fiscal autonomy for local government.

Side Note: While on the topic of property taxes, we should keep in mind that Indiana is not alone in having a property tax “problem”. Click here to read an article on Stateline.org about property taxes emerging as an election issue in Pennsylvania, New Jersey, Montana, and elsewhere.

IAR's repsonse to critics of HEA 1339

2006-06-30T14:16:00.000-04:00

Following the publication of an article on HEA 1339 in the Louisville Courier-Journal last week, some well-known Indiana bloggers fired off some poorly-informed posts in our direction. We at IAR think that these criticisms are way off the mark, as HEA 1339 was in no way designed to restrict competition and will actually increase consumer protection. After all, at a time when Indiana continues to lead the nation in foreclosures, doesn’t it make sense that Hoosiers who choose to use a licensed real estate professional should not be abandoned during the most important financial transaction of their lives?

There are a couple of major misconceptions about this legislation. One is that it introduced a new concept of requiring minimum standards. The reality is that Indiana has licensed and regulated real estate professionals for decades. And as in every licensed profession, there are minimum standards enforced by the state to protect consumers. HEA 1339 was needed because the previous law contained a loophole that allowed licensees to avoid all of the statutory responsibilities. HEA 1339 merely says that a very small subset of these duties cannot be contracted away.

Another misconception is that the law requires a real estate licensee to be involved in every aspect of a real estate transaction. We noticed a recent report by WISH-TV (Channel 8) in Indianapolis on this topic, and the associated article on the station’s website (click here) reads:

“There's a new law set to begin in Indiana that says an agent must be involved in every part of the transaction.”

This is patently false. If one simply reads the bill (click here), one can see that it most certainly does not require such involvement. It only addresses what the Courier-Journal article’s author, Lesley Stedman-Weidenbener, accurately calls, “a list of services that may seem like the basics to those who’ve bought and sold a home: answering questions offers and counter-offers, and assisting with the transaction paperwork.”

Under HEA 1339, so-called discount real estate firms will still be able to provide a variety or “menu” of services. Contrary to the implication of at least one critic, there is absolutely no requirement that an agent assist in marketing the home. Consumers can approach real estate transactions like choosing a restaurant—does one want a “fast food” approach where you perform certain services oneself or a more expensive full-service approach?

The new law ensures only that consumers cannot be completely abandoned during the transaction. We do not believe that asking a licensed professional to answer questions represents an onerous burden that will stifle competition. In fact, IAR finds the allegations that this law was designed to be anti-competitive offensive.

(It should be noted here that for those consumers who are experienced in home buying and selling and do not want any services, using an attorney or the for-sale-by-owner route will always remain options and are unaffected by HEA 1339.)

Perhaps the most preposterous statement we have seen is that the new law “outlaws” discount brokerages. The law does not address discount brokers, commissions, or the level of payment for any services. Illinois and Texas have laws similar to the new one taking effect here in Indiana on July 1^st. Discount real estate operations, or those who offer fewer services than full-service firms, have not closed up shop in these states. Here are just a few examples we found during a quick web search:

http://www.royal-realty.com/

http://www.helpusell.net/

http://www.nuwaymls.com/mlsil.asp

http://www.turn-keyrealty.net/page4.html

http://www.domesticsale.com/realestate/Brokers/Illinois/

http://www.payless-realty.com/

When Hoosiers are navigating the complicated process of buying and selling homes and decide to use a licensed professional (which is, of course, optional), they should know that their agent will answer questions and respond if called upon. After all, this is the most important financial decision in the lives of most Americans and involves significant legal liabilities.

Finally, although several states have passed similar laws to HEA 1339, no evidence has yet been produced showing adverse impacts on the discount brokerages operating in those states. We encourage everyone to first read the legislation here before jumping to conclusions about the intent of the Indiana Association of REALTORS® and our members. Click here to link to the text of HEA 1339.

Another way to view Indiana's big jobs win

2006-06-28T15:27:00.000-04:00

As Indiana celebrates its major economic development victory today (Honda's plan to build a major facility in southeastern Indiana), one indication of the scale of this success is the reaction in our neighboring states. One example is this story from the Columbus (OH) Dispatch entitled, "Honda crushes Ohio's dreams" (link here). After reading it, it sure feels good to be on the winning team.

We also suggest checking the upbeat blog post by Bill Testa, economist with the Chicago branch of the Federal Reserve (click here). He writes that:

“Honda’s decision to site its next assembly plant in the Midwest is very consistent with the crucial role that supply chains and logistics play in today’s manufacturing environment. In this regard, the Midwest’s continued high concentration in automotive parts and related industries keeps it a contender for future siting of North American automotive production facilities.”

Johnson Co. ban on renting homes defeated

2006-06-20T14:44:00.000-04:00

A ban on allowing owners of newly-constructed homes to rent their properties was defeated 5-2 by the Greenwood City Council last night. The Indianapolis Star reported today (read the article here) that REALTORS® played a key role in the defeat of this misguided proposal:

Realtors said the ordinance would hamstring homeowners who might have to face foreclosure on their property. "If you take an ordinance and apply it to one particular situation, that would have a negative impact on the entire community," said Chris Pryor, governmental affairs director for the Metropolitan Indianapolis Board of Realtors.

What is your area getting from Major Moves?

2006-06-13T16:45:00.000-04:00

The Indiana Department of Transportation has posted detailed information on what specific road and highway projects will now become a reality thanks to the Major Moves program. You can search by county to see what projects are planned and when construction will begin. Click here to jump to the site.

Link to INDOT website: Major Moves Projects by County

Chicago Fed on Midwest cities and job growth

2006-06-09T16:35:00.000-04:00

The Federal Reserve Bank of Chicago has just published a four-page issue brief entitled “Looking for diamonds in the rust: Midwest cities and job growth.” (Click here to view it.) Along with Iowa City (IA) and Madison (WI), Indianapolis and Elkhart are highlighted as metro areas that have exceeded "expected" job growth. The author makes this interesting observation regarding Elkhart:

"Elkhart is the city in the District with the largest concentration of manufacturing jobs (45% of total employment in 1998–2000), yet remarkably, it still had faster job growth than the national average."

Reading the relatively positive assessment of the Indianapolis economy reminded us of a past blog entry by Chiacgo Fed economist Bill Testa. Testa’s blog is terrific, and you can find it here.

In a November 2005 post entitled “Driving Indiana’s and Michigan’s Economic Performance”, Testa posited that the structure of local government may help explain the very different economic performances of Detroit and Indianapolis.

"Governance structures may also explain some of the challenges. Central city Detroit has been buffeted by job, population, and income flight, with concentrated poverty left in the wake. Detroit city leaders have been unable or unwilling to climb above the city’s fiscal problems to re-build its economy. To what extent has this failure come about because the central city was isolated from the rest of the metropolitan area (and state), and left to solve profound problems with its own (meager) resources?

Indianapolis and other cities have taken some modest steps in consolidating local governance to a closer fit with their metropolitan-wide economies. In the late 1960s, Indianapolis moved toward a “Unigov” structure. As Rick Mattoon discusses (working paper), the city’s boundary was expanded from 82 square miles to 402 square miles, with a legislative body responsible for governing the city. Though there remain many independent governments, taxing authorities, and school districts within the city, the consolidated city has six administrative departments below the mayor’s office.

Other Midwest cities with elements of regional governance include Minneapolis–St. Paul, which has a metropolitan sharing of property tax base. Columbus, Ohio, has not consolidated, yet its central city government has been aggressive in annexing land outward toward its interstate beltway. Both metropolitan economies have outgrown the broader Midwest."

This is a rather interesting proposition: does local government reform and consolidation have a positive impact on economic development? Click here to read the entire piece.

Ban on renting your home in Johnson Co.?

2006-06-07T22:54:00.000-04:00

A proposed ban on allowing owners of newly constructed homes from renting or leasing their property in Greenwood (Johnson Co.) is getting a lot of attention. For the record, we here at IAR think that such a proposal is misguided. Our colleagues at NAR and MIBOR have already weighed in on this idea—here's an excerpt from Monday’s Indianapolis Star article on this topic (link here):

The idea is unusual, said Joe Molinaro, of the Chicago-based National Association of Realtors, who has reviewed 300 housing laws nationwide.

"Typically, towns have powers through state laws to do zoning, but zoning always deals with uses such as residential versus commercial, or the size of lots. It doesn't deal with whether a person can own or rent a space," Molinaro said.

The idea also raises fairness questions for homeowners who want to rent out their properties.

"It's limiting the use of what you can do with a home that you own," said Tom Rector, political affairs liaison for the Metropolitan Indianapolis Board of Realtors. "Fair housing also comes into play. It's limiting from the renter's side. It's limiting the opportunity that they may have to live in a house or a unit that suits their needs."

Yesterday’s Indy Star (link to full article here) highlights further involvement by REALTORS® in Monday night’s City Council debate over this ordinance:

Bruce Brian, a Realtor and Greenwood resident, was concerned about what might happen if a person was forced into foreclosure. Would the ordinance prevent investment opportunities for vacant homes? He also predicted the city could end up in court if a rental ban is passed.

"As a taxpayer, I'm sure this will be challenged in court," Brian said. "I'd rather not have my taxpayer money going to defend this ordinance in court."

The ordinance has been tabled for now, but this serves as an excellent example of the involvement of the real estate industry in public policy on many levels. We’ll be watching events in Greenwood and will provide updates here.

IBJ spotlight on new commercial lien law

2006-05-31T15:34:00.000-04:00

Jennifer Whitson, formerly the State House reporter for the Evansville Courier & Press, has moved to the Indianapolis Business Journal. She will be the IBJ’s real estate reporter, and her first piece appears in this week’s edition. The focus is HEA 1136, the commercial broker’s lien law that was passed in this most recent session of the Indiana General Assembly. The article is available online only to IBJ subscribers.

Ms. Whitson is a great reporter (as we have recognized before here on this blog), and we wish her well in her new role.

Also, the IBJ has a very good weekly email focused on real estate. You can sign up for this free bulletin here.

Indy and FW in top 20 metro areas for foreclosures

2006-05-31T10:30:00.000-04:00

Benjamin Lanka writes in today’s Fort Wayne Journal Gazette on new foreclosure rate figures from RealtyTrac:

Fort Wayne ranked in the top 20 nationally among cities with high foreclosure rates, according to an online foreclosure marketplace company, but the problem is more severe in the state’s capital.

A study from RealtyTrac, which publishes the largest national database of pre-foreclosure and foreclosure properties, showed Fort Wayne ranked 18th out of the top 100 metropolitan areas for foreclosure rates in the first quarter of this year. Indianapolis ranked first on the list, averaging one foreclosure for every 69 households. Fort Wayne averaged one foreclosure for every 166 households.

The numbers aren’t shocking, but the article is worth reading nonetheless. The J-G article also lists the twenty metropolitan areas with the highest foreclosure rates, and there are some surprises there. Las Vegas made the top 20, sandwiched between Canton and Columbus (OH) despite strong recent home price appreciation in that market.

Click here for the full article and click here to visit the RealtyTrac website.

Visualizing property tax rates

2006-05-25T15:53:00.000-04:00

The May issue of InContext, a joint publication by the Indiana Department of Workforce Development and the Indiana Business Research Center, has a neat graphic illustrating the variation in property tax rates across the state. Click here or click on the graphic at the left to read the full article.

IAR's new Executive VP announced

2006-05-25T10:41:00.000-04:00

The news has broken-- Inside INdiana Business reported today that Ellen Engleman Conners will become the new CEO of IAR on June 1^st. You can read the full article entitled “Indiana Realtors Land High-Profile Leader” here.

A former chair of the National Transportation Safety Board, Ms. Engleman Conners has an official biography available on the NTSB's webpage here.

We at IAR are very excited about this announcement. Our current president is quoted in today’s Indianapolis Star article on this news (read the full article here):

"She will give us new vision," said Sue Pfohl, association president. "It's time to move to the next level, and I think she will take us there."

Progress on assessment consolidation in Allen Co.

2006-05-23T10:59:00.000-04:00

Today's Fort Wayne Journal Gazette features an editorial about an ongoing attempt to consolidate local property tax assessment:

Instead of a full-scale restructuring plan that would move township property tax assessment operations to the county assessor’s office, the assessors outlined some modest cooperative measures that preserve the “hub and spokes” structure between the township and county offices.

Even though it cleaves to the outdated and inefficient township system, the plan and the discussions it prompted among council members and assessors provide a good place to start considering changes to make the property tax assessment system as fair and efficient as possible.

You can read the rest of the editorial here. IAR applauds the elected officials in Allen County for their efforts to modernize local government. We hope similar discussions take place in the rest of Indiana.

"Official" real estate blog launched

2006-05-08T12:13:00.000-04:00

Well, it actually launched last month, but by now there have been enough posts published to get a good sense of what this blog is all about. Here's a portion of the press release from the launch of realblogging.com (which is produced by RealtyU, Inc.):

Real Estate Industry Gets National Blogging Website
As Industry Icons Blog Together

ALISO VIEJO, CA, April 19, 2006 – Until a year ago blogs were considered a curiosity, but this early cult phenomenon has now gone mainstream in a big way. Today there are thought to be more than 30 million “bloggers” worldwide and growing by thousands every day. Blog is short for “web log,” and is basically an online platform published on a website where “bloggers” (those who write the entries) offer their opinions and thoughts.

To meet this growing need in the real estate industry RealBlogging (www.realblogging.com) – the self proclaimed Official Real Estate Industry Blog – was launched this week. Validating that claim is their line up of bloggers that reads like a real estate who’s who of Authors, Speakers and Real Estate Experts. Collectively RealBlogging may have pooled together the most extensive real estate brain trust the industry has ever seen. With interaction and blogging in large part being based on the sharing of knowledge, this level of cooperation is unheard of and to be applauded.

Rental properties and taxes

2006-05-08T10:29:00.000-04:00

IAR held one of our major “Triennial” meetings of the general membership in Merrillville recently, and the citizens of northwest Indiana were terrific hosts. The Property Tax Committee and the Government Affairs Committee met jointly to listen to a panel of elected officials and policy experts. It was truly a great dialogue, and it sparked a number of questions.

One thing was very clear—REALTORS® from around the state are concerned about the tax burden on rental or non-homestead residential properties.
Experienced agents and brokers spoke of investors unloading properties due to the relatively high property tax burden. It seems likely that this is contributing to the slow rate of price appreciation in Indiana. This story by WNDU of South Bend demonstrates how serious this problem is in some areas of the state (click here).

For owner-occupied homes, it appears as though the boost in the state-paid Homestead Credit for this year’s property taxes is having a noticeable, positive impact. For example, a story in the Fort Wayne Journal Gazette on April 14th began:

Thanks to last-minute action by the Indiana General Assembly, homeowners across Allen County will reportedly see a 3 percent average drop in their property tax bills. (Click here for the full article.)

But next year, homeowner relief will come not as a credit, but rather as a $10,000 increase in the $35,000 “standard” deduction. This deduction will further shift the existing tax burden to all other classes of property, including rental homes. IAR did not support this approach, and Dan Shaw’s article in the Lafayette Journal and Courier from April 17th indicates that a key fiscal leader wants to get away from the deduction “game”:

State Sen. Luke Kenley, R-Noblesville, says he wants to end the practice of giving relief to just one group. In 2007, the chairman of the Senate Tax and Fiscal Policy Committee will again introduce a bill that will allow local governments to raise an income tax and use revenue from that source to replace money they would otherwise get from property taxes.

"I'm tired of choosing which taxpayers are more deserving than somebody else," he said. "The truth is everybody's property taxes are too high."

We couldn’t agree more. Here’s hoping that 2007 is a session in which Indiana reduces its overall reliance on property taxes, providing cuts for owners all classes of property.

New urbanism in Clark Co.

2006-05-02T16:04:00.000-04:00

The web edition of yesterday's Louisville Courier-Journal contains a story on "new urbanism" in Jeffersonville (Clark Co.) and the city's downtown housing market (click here for the article). According to NAR, characteristics of new urbanism include pedestrian-oriented & climate-sensitive development, narrow streets, use of porches & alleys, and a de-emphasis on garages. Here is a brief excerpt from the C-J article:

Real-estate agent Susan Rogers, who showed one of the houses yesterday, and Sandy Phillips, owner of a downtown shop, said the city was more than just off to a good start toward revitalization.

"I think we're already in the middle of it," Rogers said.

NAR has a wealth of information on its website (click here), including tips on successfully marketing new urbanism to homebuyers. One of the example communities featured by NAR is the Coffee Creek Center right here in Porter County, Indiana. The webpage for Coffee Creek is well worth a quick look—click here to view it. However, the Times of Northwest Indiana has reported that this Chesterton development has not grown as quickly as expected (read more here).

Immigrants' impact on real estate markets

2006-05-01T16:24:00.000-04:00

On this "Day Without Immigrants", it seems appropriate to ponder the impact that immigrants have on Indiana’s real estate markets. We are unaware of any quantitative studies on this topic, but anecdotal evidence suggests that it may be significant. This recent article in the Pharos-Tribune (Logansport) on the Cass County housing market caught our attention (read the full article here):

Both [Tom] Scheetz and [Lori] Lange have seen more people looking to buy since the weather has turned nice. Scheetz said spring is typically his best time of the year, but over the past five years he has seen that trend change.

“Believe it or not, the market here is not too bad,” Scheetz said of recent sales. He said what is saving the market are the Hispanic home buyers.

“The Hispanic market has been a very good market for us. They have basically saved our market,” Scheetz said. “They buy whenever they feel the need to buy.”

It has been a stable market.

With Hispanics helping keep the market stable, Scheetz said he didn’t see a lot of down time.

“I would say Hispanics are the majority of people buying homes right now.”

Messy assessment situation in Allen County township

2006-05-01T13:59:00.000-04:00

Dan Stockman of the Fort Wayne Journal Gazette wrote a terrific story last week on wide-ranging problems with property assessments in Allen County’s Cedar Creek Township. Click here to read the full version of:

Assessed Confusion: Property values missing, or off mark, in Allen township

According to the article, the current township assessor replaced the previous staff with his wife and son. Such arrangements are not unusual in many Indiana townships, and they are not illegal.

One common defense of this practice is that qualified individuals willing to do the work are difficult to find in rural areas. But even in the most populous county in the state (Marion), nepotism in township government is still prevalent (as noted by last spring’s special report by the Indianapolis Star).

SB 107, authored by State Senator Mike Young, would have addressed nepotism in local government for Marion County alone, but the bill did not receive a hearing in the Committee on Governmental Affairs and Interstate Cooperation this session.

Major Moves update: Toll Road lease signed

2006-04-12T14:49:00.000-04:00

We just received this important update on the Major Moves program:

"The Indiana Finance Authority and ITR Concession Company LLC, the joint venture formed by Cintra and Macquarie, today executed the lease agreement for the Indiana Toll Road. Charles Schalliol, director of the Office of Management and Budget Director, in his capacity as chair of the Indiana Finance Authority Board, signed the agreement. Signatures are effective as of 9 a.m. today.

The parties will now move toward closure of the $3.8 billion, 75-year Toll Road lease by June 3o.

The lease includes an addendum, which provides for: a "toll freeze" for passenger vehicles at current rates until electronic tolling is put in place; a 40 percent discount through June 30, 2016, for passenger vehicles utilizing electronic tolling; and continuation of commuter discount cards until the availability of electronic tolling. Copies of the addendum are available. The lease agreement itself, which is posted at http://www.in.gov/ifa/, did not change."

HEA 1362 - Local Government Reorganization

2006-04-06T16:01:00.000-04:00

With respect to broad local government reform, the 2006 legislative session should be considered a success. While IAR would have preferred to see property tax assessment consolidated at the county level and the rest of Mayor Bart Peterson’s IndianapolisWorks! program approved, we think that HEA 1362 can be a catalyst for discussion and action on reform across Indiana.

HEA 1362, authored by Representative Jim Buck (Kokomo), allows almost any local unit or school corporation to merge or reorganize. It is no coincidence that just weeks after the session ended, Fort Wayne Mayor Graham Richard has made news by endorsing a new consolidation plan. The Journal Gazette’s Benjamin Lanka reported on this development yesterday (full article here):

Backers of a consolidated local government collected a choice ally Tuesday as Mayor Graham Richard announced his support for a single countywide executive and a single countywide council.

Richard made the announcement as the Fort Wayne City Council and Allen County commissioners prepare to meet in joint session Monday to discuss House Bill 1362, which Gov. Mitch Daniels recently signed into law. The meeting is believed by many to be the first-ever joint meeting of the two legislative bodies.

The law allows local governments to restructure or consolidate without state approval. It requires the process to be started by resolution of a legislative body or a petition from residents.

More specifically, the bill states that a reorganization process may be initiated by the local legislative bodies (such as a county council and a city council) or by a petition from 5% of the voters in the units.

The entities that are seeking to reorganize would then form a committee to develop a final plan. If the legislative bodies of the affected units approve this plan, it would go before the voters as a referendum. But even if these bodies don’t approve the plan, it could still be placed on the ballot if 10% of the voters petition for it.

Some legislators insisted on a mechanism to prevent “hostile takeovers”. To address this concern, the reorganization plan could include a “rejection threshold” to ensure that one unit would not be absorbed by another even if the vast majority of the less populous unit were against the consolidation. The bill has other safeguards to ensure that pension liabilities or other debt incurred by one unit cannot be spread out to the other entity.

We expect HEA 1362 to begin or rekindle debates in other counties, and Indiana desperately needs robust discussion at the local level. It is very difficult for state legislators to craft one-size-fits-all approaches, but HEA 1362 gives communities the tools to begin drawing their own blueprints for local government in the 21^st century.

NOTE: One thing HEA 1362 does not allow is for a town or city to “move” to another county as is favored by at least one Hoosier (click here). However, upon re-reading the bill, it appears this town might be able to consolidate itself into a new county, but I don’t think that is what this gentleman had in mind.

Good article on growning ranks of Hoosier agents

2006-04-04T14:39:00.000-04:00

Most of us have read accounts of the swelling ranks of real estate agents in boom markets, but few media outlets in Indiana have covered the increasing number of Hoosiers in this profession. Indiana may not have red-hot markets, but it has seen its share of growth— membership in IAR recently topped 19,000, for example.

Jenni Glenn of the Fort Wayne Journal Gazette recently wrote an excellent article with a wealth of background information and statistics (and not just regarding the northeastern Indiana market):

Northeast Indiana isn’t the only part of the state experiencing this trend. The number of active agents in the state skyrocketed 51 percent in the last four years, said Nicholas Rhoad, director of the Indiana Real Estate Commission. The number of salespeople with active licenses jumped to 12,598 as of Jan. 1. The state only had 8,330 active real estate agents as of Jan. 1, 2002.

You can read the full article on the J-G website by clicking here.

IAR responds to inaccurate information

2006-03-30T10:51:00.000-05:00

Today’s Indianapolis Star carries a letter to the editor written by IAR’s VP of Government Relations regarding HEA 1339. It corrects the record with respect to an earlier letter published by the Star on March 19^th (view today's letter from IAR online here):

I am writing in response to the March 19 My View by Patrick Woodall of the Washington-based Consumer Federation of America ("Home sellers lose with this new law"). He implies that a bill recently passed by the legislature will prove detrimental to home sellers in Indiana. Woodall's criticisms are not only inaccurate, they are borderline offensive.

House Bill 1339 is an effort to end "hit and run listings." This happens when a firm lists a property for sale, charges an up-front fee and then abandons the project, leaving the consumer with no representation. Consumers often then turn to the agents of potential buyers to help them through the transaction, even though that agent works for the opposing party in the transaction.

State law has for years defined the duties required of real estate agents. A loophole in that law has allowed some firms to avoid virtually all state-imposed standards. HB 1339 merely reinstates a portion of those consumer protections.

HB 1339 does not require specific marketing activities, nor does it eliminate any business model. Many states have enacted similar laws, and the discount brokerages Woodall refers to still operate successfully.

Consumers here will continue to have a broad choice of brokerage models to choose from. But now they will also have the guarantee that they will not be left high and dry in the middle of a transaction. The legislature and governor should be applauded for enacting this consumer-friendly reform.

The Star also published a letter from State Representative Tim Harris (Marion) on the same subject. Rep. Harris, who authored HEA 1339, also responds to the March 19^th piece. His letter clarifies what the legislation does and does not do:

HB 1339 does not do the following:

• Require marketing of the property.

• Address compensation issues in any way.

• Prohibit discount brokerage.

• Prohibit consumers from selling their home as a "for sale by owner", or with the assistance of an attorney.

HB 1339 specifically requires licensees to do only the following:

• Be available to present offers and counter-offers.

• Assist in negotiating and completing forms.

• Be available to respond to questions.

The state has already required more services of licensees than the above, but HB 1339 merely sets out that these services cannot be "contracted away."

Rep. Harris also points out that discount brokers are thriving in states that have passed similar legislation—you can read his full letter here. We hope that this information sets the record straight with respect to HEA 1339.

Daylight Saving Time update

2006-03-29T12:38:00.000-05:00

Last session, IAR stood with numerous organizations to support statewide observance of Daylight Saving Time. As we prepare to “spring forward” on April 2^nd, IAR is again teaming with the Indiana Chamber of Commerce, the Indiana Manufacturers Association, and many others to help Hoosiers with the transition.

Lou Zickler, a former IAR president, represented REALTORS® at a press event earlier this week (WISH-TV – Indianapolis covered it here). Inside INdiana Business with Gerry Dick noted IAR’s take on why DST is good for the state:

According to Karl Berron, Vice President of Government Relations for the Indiana Association of Realtors, "There's no excuse for us as Hoosiers not to do everything in our power to remove barriers to new investment."

Read the full Inside INdiana Business article here. Also, the Indiana Chamber has compiled some excellent resources on DST. Check them out here, here, and here.

West Coast TICs investing in Indiana

2006-03-23T10:29:00.000-05:00

A very interesting article by Madhusmita Bora in yesterday's Indianapolis Star shines the spotlight on the trend of West Coast investors using "tenant-in-common" interests or TICs to snap up commercial properties in Indiana (click here to read the article):

"It's a very yield-driven market," said Scott Richter of California-based Evergreen Realty Group, a TIC that has holdings in Kansas City, Florida, California and Arizona. "The yields at the coasts are not as good as they are in the Midwest."

That's one of the mantras that brokers at commercial real estate services firm CB Richard Ellis use when pitching Indiana to the TICs.

"The other reason is there's growth here now," said Steve LaMotte, vice president of the multi-housing properties group for CB Richard Ellis. "And their arrival has coincided with our economic recovery."

LaMotte cited statistics to back up his claim: 8,600 jobs created in the last year in the Indianapolis metropolitan statistical area; 7,500 new households were added to the market; and occupancy rates in apartment complexes climbed 1.4 percent.

NAR has some great resources on assisting clients in TIC transactions—check out examples here and also here.

HEA 1017 – Property Appraisal

2006-03-23T09:30:00.000-05:00

Authored by Representative Peggy Welch (Bloomington) and sponsored by Senator Vaneta Becker (Evansville), HEA 1017 will improve the accuracy of certain appraisals required under Indiana law.

There are several Indiana statutes that call for judicial appointments of property appraisers. Instances where such appointments are made include certain sales of public land and eminent domain proceedings. However, prior law required only that “disinterested freeholders” perform the appraisals. Taxpayers’ dollars are at stake in these transactions, but appointed “appraisers” needed no experience or qualifications.

HEA 1017 requires that some of the appointees be licensed as a real estate broker or appraiser. It also requires that the licensed individuals reside in Indiana.

This legislation passed both chambers of the General Assembly unanimously and was signed by the Governor on March 20^th. The changes described above will become effective July 1^st, 2006.

Foreclosure picture still grim for Indiana

2006-03-22T16:24:00.000-05:00

Headlines earlier this week indicated that Indiana had the highest foreclosure rate in the nation. The Indianapolis Star's article (click here) cites the Mortgage Bankers Association as its source, but the time period covered was the last quarter of 2005.

This Inman newsbrief we just received cites more recent statistics from this February (provided by RealtyTrac), and it places Georgia as the number one state. However, Indiana appears to be not far behind:

Foreclosure rates in Indiana and Colorado were among the nation's five highest for the second month in a row. Indiana reported 5,909 properties entering some stage of foreclosure in February, a 34 percent increase from the previous month and nearly three times the number of new foreclosures reported in February 2005.

Regardless of which state has the highest rate, it is not good news.

Session wrap-ups

2006-03-19T08:11:00.000-05:00

Next week we will begin posting summaries of legislation enacted in the just-concluded session. It was a highly productive few weeks that should have very positive impacts on Indiana's real estate industry. We’ll take a closer look at property tax changes, the Major Moves bill, eminent domain, and much more.

For now, check out this nice recap by the Indianapolis Business Journal (click here). The IBJ reached out to IAR for our views on the General Assembly’s work, and the article features several quotes such as:

"For a short session in an election year, I'm not sure how much more you could have hoped for," said Karl Berron, the Indiana Association of Realtors' vice president for government relations.

NW IN REALTORS® rally for Major Moves, dedicated funds

2006-03-14T10:44:00.000-05:00

As noted by media outlets around the state (click here for WIBC Newsradio 1070’s report), a deal on the Major Moves proposal seems to have been completed. A final vote in the House and Senate will decide HB 1008’s fate later today.

One of the key changes reportedly involves inclusion of $100 million dedicated for transportation infrastructure in northwest Indiana. REALTORS® in this region rallied for restoration of these funds, and their backing has undoubtedly helped HB 1008 progress to this point.

GNIAR joined regional business leaders yesterday to support Major Moves and funding for northwest Indiana. The Times covered this event (read the full article here) at which the importance of regional development was a key theme:

Nancy Smith, executive vice president of the Greater Northwest Indiana Association of Realtors, said the proposal "will be a much-needed boost to Indiana's economy" and commuter system.

The South Shore is a good line, she said, but "it only benefits a certain part of Northwest Indiana." With more Illinois residents moving into places farther east, such as Valparaiso or Chesterton, a good commuter system is becoming more important to the region, Smith added.

"There's a quality of life you can't get in Chicago," she said.

Change in assessment structure unlikley

2006-03-14T09:45:00.000-05:00

We have written much over the past several months about Indiana’s broken property tax assessment structure. We were greatly encouraged when the Governor urged reforming our antiquated system in his State of the State address in January. But even though the House of Representatives approved provisions to remove most township trustees from the assessment process earlier this session, it now appears unlikely that any changes will be enacted into law.

IAR will not relent on this issue, and we are hopeful that next session will provide a better opportunity. The fast pace of this “short” session added to the difficulty involved with making changes opposed by township officials.

With time running out for changes in 2006, we found a great deal of irony in today’s Post-Tribune update on the ongoing saga of Porter County’s property tax shortfall. Jim Stinson’s article entitled “Blame in tax fiasco spreads” provides even more evidence that reforms are desperately needed. You can read the article here today only (The Post-Tribune doesn’t archive), but here is the most relevant portion (with our emphasis added):

VALPARAISO — Porter County’s system of valuating property is riddled with errors and miscommunication, a consultant told Valparaiso city leaders Monday night.

James M. Bennett, a tax consultant hired by Valparaiso City Clerk-Treasurer Sharon Emerson Swihart, made the claim before the Valparaiso City Council.

Bennett was hired after county auditing errors led to the city being forced to return about 8 percent of its general funds for 2006.

Bennett said a series of errors — including the multimillion-dollar overvaluation of a modest Chicago Street home — caused the mistake in Valparaiso’s property tax draw, which officials say is dangerously hovering around 92 percent of what was budgeted and approved.

But Bennett drew the first public line away from Porter County Auditor Sandra Vuko and to other county offices, including those of the Porter County assessor and Porter County treasurer, whom he said pushed for property tax refunds over three years to be paid at once.

Bennett also said township assessors not making their deadlines is causing the auditor to use faulty numbers — although the auditor by law must use numbers he is provided.

And some taxpayers even may be to blame: Bennett said a large number of tax delinquencies caused Valparaiso’s draw to be shorted.

Bennett said the state and county system of assessing citywide valuation is so volatile — he noted changes are made every day by township assessors — that Valparaiso leaders should just assume annual mistakes are made and appeal to the state every year by Dec. 31.

Obviously, there is much more to the problems in Porter County than just the decentralized nature of property tax assessment. But we can’t help point out that this flaw has played a key role in a serious financial crisis for one of Indiana’s largest counties.

Final hours

2006-03-13T13:07:00.000-05:00

The legislative session is drawing to a close. The regular session must end at midnight tomorrow, and we expect some solutions on property tax issues and the Major Moves proposal to emerge soon. The Indianapolis Star is reporting that key negotiators on HB 1008 are expressing optimism this morning-- read a short update here.

Health care working group tomorrow (Indy)

2006-03-10T11:52:00.000-05:00

The Citizens' Health Care Working Group is holding a forum in Indianapolis tomorrow (March 11^th) at Butler University from 9 am to 1 pm.

The Working Group was created by federal legislation written by Senators Orrin G. Hatch (R-Utah) and Ron Wyden (D-Oregon). The goal is to seek citizen input and answers to these four questions:

What health care benefits and services should be provided?
How does the American public want health care delivered?
How should health care coverage be financed?
What trade-offs are the American public willing to make in either benefits or financing to ensure access to affordable, high-quality health care coverage and services?

The National Association of REATORS® is a major participant in this effort, and a NAR representative will be in attendance along with area real estate professionals. Click here to register for the meeting, and click here to learn more about the Working Group.

Commercial broker lien bill moves ahead

2006-03-09T13:18:00.000-05:00

HB 1136, which would place Indiana among a number of states that already allow liens to be used by commercial brokers, is now on its way to the Governor's desk. The House of Representatives voted last night 88-5 to agree (or "concur") with changes made in the Senate.

Legislation update

2006-03-07T11:06:00.000-05:00

Last week was a great week for REALTOR®-backed legislation. Several bills passed the Senate and may soon become law. A conference committee responsible for final negotiations will begin work today on the Major Moves program (HB 1008), but other bills are even closer to being signed the by Governor.

HB 1339 – License Law Enforcement

The real estate licensure bill authored by Representative Tim Harris (Marion) was not amended in the Senate and therefore does not need to be addressed by a conference committee. A 49-0 vote last Thursday sent the bill to Governor Daniels’ desk for his signature. If he signs it into law, Indiana will become one of only a few states to enact laws to prevent “hit and run” listings.

HB 1136 – Commercial Broker Lien Law

Another IAR-supported bill allowing liens to be used by commercial brokers also passed the Senate unanimously. The House of Representatives must vote once more to agree with recent changes, but we are hopeful of a positive result. Concerns raised at the eleventh hour threatened to derail the bill, but Senator David Long (Fort Wayne) showed great leadership and was able to forge a compromise. We owe thanks to him and author (and IAR member) Representative Woody Burton (Greenwood).

Distance learning approved by IN Real Estate Comm.

2006-03-06T12:28:00.000-05:00

We just received word from the Indiana Professional Licensing Agency that as of this April 1^st, real estate licensees may use distance learning to obtain continuing education. Each specific course will have to be approved by the Real Estate Commission, however.

Major Moves up for final Senate vote

2006-03-02T10:28:00.000-05:00

The bill is being debated right now, and you can watch it live. Click here to launch the video.

Downtown housing in Fort Wayne

2006-03-02T09:36:00.000-05:00

Becky Manley of the Journal Gazette wrote yesterday about demand for downtown housing in Fort Wayne. According to her article, local REALTORS® have differing opinions of a recent study on downtown housing. An excerpt is posted below, or you can read the full piece here.

This article grabbed our attention since a bill supported by the City of Fort Wayne (along with the FW Area Association of REALTORS® and others) to make tax increment financing available for housing projects had been moving through the General Assembly this session. Despite passing the Senate unanimously, SB 217 was not heard in the House of Representatives. It is possible that it could be revived later this session, however.

Demographic extremes are creating a market for housing in downtown Fort Wayne, according to a study by a marketing strategy firm.

Those demographic extremes are composed of younger singles and childless couples and, on the other end of the spectrum, empty nesters and retirees. Also, “non-traditional families” are considered to be seeking downtown digs.

“These are people who are seeking a more urban environment,” said Laurie Volk during a Tuesday news conference. Volk is a partner at the New-Jersey based Zimmerman/Volk Associates, the firm that produced the study for the city of Fort Wayne’s Redevelopment Department.

Waiting for Senate action

2006-03-01T14:56:00.000-05:00

The Senate is in recess right now for caucus meetings. The Major Moves bill, HB 1008, will be eligible for amendment when business resumes. 37 amendments have been filed, so it could be a long affair.

Two other bills of interest may be acted upon. HB 1136, dealing with liens for commercial brokers, may also be amended today. HB 1339, the real estate license law legislation, could be called for a final up-or-down vote (or third reading).

HB 1010, the main eminent domain bill, passed the Senate with unanimous support yesterday. It is possible that author Rep. Dave Wolkins will approve of the changes made in the Senate and the House will send the bill to the Governor for his signature.

To trend or not to trend...

2006-02-27T13:54:00.000-05:00

Lesley Stedman Weidenbener of the Louisville Courier-Journal covered the status of trending, or the annual adjustment of real property assessed values, in a column yesterday. Trending is a complex concept, but her article makes it clear and also explains why it may or may not be delayed in the 2006 session. Click here to read "Property tax rules might be changed slowly".

Housing market overview for Delaware Co.

2006-02-24T15:38:00.000-05:00

Yesterday’s Star Press reported on a meeting of the Ball State University Business Forecasting Roundtable (click here for the article). The outlook for housing in Muncie and Delaware County was rather positive, despite job losses in the region’s manufacturing sector:

Housing values have increased for four consecutive years in Delaware County and showed about a 4-percent increase year-over-year in 2005, [Jim Kouns, of Coldwell Banker Lunsford] said. According to the MLS data, 82.5 percent of homes purchased in the county last year were valued at $150,000 or less.

Realtor Mike Lunsford said he was amazed how resilient the market has been, even in the face of a declining job market over the last decade.

"Think back with me to losing ABB, BorgWarner's transmission business, Delco and Ball Corporation, all of which occurred in a period of about 18 months," Lunsford said. "This market was able to absorb virtually all of this inventory in about 18 months.

Seniors in MA can work to reduce tax bills

2006-02-24T15:12:00.000-05:00

We came across this innovative method of property tax relief via the Citizens for Tax Justice's Talking Taxes blog:

Mayor Thomas McLaughlin [Woburn, Massaschusetts] has announced the "Senior Citizen's Property Tax Work-off Program." The goals of the program are:

1) To assist the senior citizens of the city of Woburn with payment of residential property tax bills.

2) To increase the involvement of our senior citizens in the municipal government and the school system of Woburn.

3) To acknowledge and affirm the skills and ability of our seniors and the community's continuing need for their services.

Up to 20 participants in this pilot program can earn $6.75 hourly which will then be credited against their property tax bills. One of the agencies where seniors might be placed is the Department of Public Works, which brought to mind the image of seniors shoveling snow or digging trenches to pay off their property taxes. But after reading through the details of the program we learned that “no job will require heavy physical exertion.” Phew!

Bloggers welcome at NAR meetings

2006-02-24T11:01:00.000-05:00

The Center for REALTOR® Technology is going to make facilities available to real estate bloggers at future NAR national meetings. It looks like there will be Ethernet jacks, Wi-Fi, snacks, and coffee provided. You can read more about it here.

Follow-ups to two earlier posts

2006-02-23T16:05:00.000-05:00

Our most recent post entitled “Local government streamlining update” should have clarified that HB 1344, which dealt only with Vanderburgh County government reorganization, did not advance. It was essentially absorbed into HB 1362, although the referendum process is now much more streamlined than it would have been under HB 1344.

Also, we have obtained a summary of how HB 1008, the Major Moves legislation, has been amended. The summary itself is three pages long, as the Senate Appropriations Committee made many tweaks in addition to a handful of “major” changes (no pun intended). Here is an overview:

The amendment took out the ten-year freeze on toll rates, but it provides a refundable state income tax credit for individuals. The credit (not a deduction) would equal 50% of the tolls paid up to a maximum of $300 annually.

Any new projects requiring tolls, including the I-69 extension to Evansville, would have to be approved in future sessions of the General Assembly.

Under the current version of HB 1008, the I-69 extension as proposed could not terminate in Perry Township of Marion County.

A new trust fund was created to receive $400 million of the $3.85 billion in proceeds from the Toll Road lease. This “lock box”will earn interest until the balance reaches $1 billion. At that point, only the earnings above the $1 billion figure may be spent for road construction and improvements.

Additional distributions are made to local units of government as follows:

$150 million to be shared by all local units of government over the next two fiscal years;
$20 million to the Northwest Indiana Regional Development Authority;
$30 million each to LaPorte, St. Joseph, Elkhart, LaGrange, and Steuben Counties (but another RDA for northeastern Indiana is not created); and
$25 million to Porter County and $15 million to Lake County

Local government streamlining update

2006-02-23T13:36:00.000-05:00

Early this morning, legislation aimed at a compromise on Mayor Bart Peterson’s Indianapolis Works initiative was amended into SB 1. As it will soon read, the bill will not consolidate property tax assessment at the county level but will phase in a unified Marion County fire department. You can read Indianapolis Star editor RiShawn Biddle’s running update by clicking here.

HB 1362, which deals with local governments in all other 91 counties, passed out of a Senate Committee yesterday afternoon. The bill was changed to facilitate streamlining in a handful of the largest counties (Lake, Allen, St. Joseph, Vanderburgh, etc.). Jennifer Whitson of the Evansville Courier & Press has a great recap (register to read the full article here):

On Wednesday, the committee altered the bill to make the process more likely to lead to consolidation in counties with a population of more than 170,000, which would include Vanderburgh and about five other counties.

Under the amendment, offered by Sen. David Long, R-Fort Wayne, the petition to begin the process would require the signatures of only 5 percent of registered voters.

Also, once a plan is adopted by the legislative bodies, a simple majority vote of all county voters would be necessary to put the plan into place. Long's changes also would bar any consolidation plan from requiring rural residents from assuming city bond payments and debts as part of a consolidation.

Long said city residents are also county residents and pay county taxes, so they should have an equal say in whether to consolidate.

"To separate my (city resident) vote out and say my vote doesn't count when dealing with a county issue is a mistake, I think" he said.

IAR supports the changes made yesterday, which include the clarification that pension or bonding debt incurred by one local unit cannot be foisted onto another unit after a merger or consolidation.

Major Moves advances with changes

2006-02-23T13:12:00.000-05:00

HB 1008 passed out of the Senate Appropriations Committee after being amended. One change requires future legislative approval of public-private partnerships like the one proposed by Governor Daniels to facilitate the I-69 extension. Another amendment mandates that the planned I-69 route be changed to bypass Perry Township in Marion County.

Property tax bill gets major overhaul

2006-02-22T10:00:00.000-05:00

HB 1001, the primary property tax-related bill in the 2006 session, changed dramatically yesterday. Gone from the bill are changes in the property assessment structure and an increase in the state-paid Homestead Credit for taxes paid this year. IAR has supported both of these elements and believes that they could very well reappear later in this session.

The Senate Tax and Fiscal Policy Committee chose yesterday to take a broad approach to property tax reduction. An amendment offered by Senator Gary Dillon (Pierceton) would give counties the ability to increase local option income taxes provided that 100% of the new revenue would reduce property taxes. The House of Representatives has indicated a strong reluctance to support such tax shifting, but this move could rekindle discussions.

Senator Luke Kenley (Noblesville) also introduced a new concept designed to mitigate impacts of “trending” for homeowners. Trending, or the annual adjustment of real property assessments, will begin to affect tax bills next year. HB 1001 was amended yesterday to create an inflationary Homestead Deduction that would rise along with the statewide average AV of homes. This means that in 2007, the current $35,000 deduction could jump to something approaching $40,000 (or more) and would likely rise by a smaller amount each year thereafter.

Lesley Stedman Weidenbener has an excellent article about the new version of HB 1001 in today’s Louisville Courier Journal (click here to read it).

The House and Senate approaches to the property tax problem are so radically different that the “end game” is rather unclear. Unfortunately, the amendments offered yesterday deleted provisions that would have reassigned responsibility for property tax assessment from Indiana’s 831 township trustee-assessors to the county level.

IAR remains hopeful that this much-needed reform can be revived. Because the House-passed version of HB 1001 contained these provisions regarding township-trustee assessors, the concept can be included in the final package. Please let your Representatives and Senators know that better assessment matters to homeowners and helps eliminate distortions in real estate markets. We will continue working to make sure the voice of our industry is heard on this issue.

Kansas state association blogging

2006-02-20T18:01:00.000-05:00

We recently learned that the Kansas Association of REALTORS® has a blog focused on legislative updates, and you can view it here. We doubt that the Indiana Real Estate News (IREN) Blog and the KAR Legislative Blog are the only two state or local REALTOR® association sites out in the blogosphere, so if anyone knows of others please email us at:

blogger@indianarealtors.com

Indy Star runs the numbers

2006-02-19T23:34:00.000-05:00

In this Sunday’s paper, the editorial board of the Indianapolis Star used numbers to highlight issues that should be addressed by the General Assembly this session (read the full editorial here). The numbers 5 and $44,000 jumped out at us as particularly important:

5: The number of local governments to which the average Indiana resident must pay property taxes.

The problem: Think you have just one local government to worry about? Not a chance. Thanks to Indiana's antiquated system of local government, an array of counties, cities, townships, library boards and other agencies feed off property taxes.

Why you should care: Such complexity makes it difficult for citizens to either hold local officials accountable for rising costs or benefit from short-term property tax relief.

Corrective reform: Overhauling local government and reducing the reliance on property taxes are the best long-term solutions. For now, simplifying property tax bills, a feature of the now-stalled House Bill 1001, would go a long way toward improving accountability.

$44,000: The assessed value of a home worth $100,000 on the market in Sullivan County's Cass Township.

The problem: A home bought for $100,000 should be valued as such by township assessors. But, according to a study released last year by the Indiana Fiscal Policy Institute, homes all over the state are subject to wide disparities in assessed value.

Why you should care: This is one reason why the 2003 reassessment was far more wrenching to taxpayers and governments than it had to be.

Corrective reform: State senators should help eliminate township-level assessment and hand those functions to county assessors by approving HB 1001. Amending the bill to abolish elected township assessors in Marion County also makes sense.

As noted above, HB 1001 is the likely vehicle for addressing these issues (although HB 1362 also deals with streamlining local government). The chair of the Tax and Fiscal Policy Committee, Senator Luke Kenley, has scheduled HB 1001 for another hearing at 9:00 AM this coming Tuesday. Look for a report here in the early afternoon.

Preview of next week's legislative action

2006-02-19T20:09:00.000-05:00

Jennifer Whitson of the Evansville Courier & Press writes today (link) that the General Assembly is headed into “crunch time”:

The deadline for bills to be adopted by a committee is Thursday. Then there's one more week for a bill to pass either chamber. After that, conference committees form to hash out differences between House and Senate versions of bills. The short session must end by midnight on March 14.

But with these deadlines looming, many of the major topics under consideration are still in flux.

One of these topics still under consideration is Governor Daniels’ Major Moves program. The legislation is contained in HB 1008, which is currently before the Senate Appropriations Committee. Committee members will vote on this bill Thursday, but we expect some changes to be made. Sunday’s Elkhart Truth has this report about the intentions of Senator Joe Zakas of Granger (St. Joseph Co.):

Zakas said he will propose setting aside a portion of the $3.85 billion Indiana would receive from leasing the Indiana Toll Road into a "next generation trust fund." The objective of the trust fund would be to assure that the state in 30 years will have $1 billion for road maintenance funding. The senator believes the state would have to set aside $280 million from the lease deal to accomplish that goal.

"People have been concerned about the length of the lease," Zakas said. Many critics of the governor's plan to raise money to meet all current road construction needs worry that the state will nothing to show from the deal after the 10-year window of the plan runs out.

Senator Zakas also plans to provide an income tax credit for Hoosiers who use the Indiana Toll Road. Such changes should help secure enough support for passage of this critically important legislation.

IAR has already endorsed Major Moves, and REALTORS® are lending their support all over the state. We caught this in The (northwest Indiana) Times’ coverage of Friday’s town hall meeting with the Governor in Crown Point (Lake Co.):

A few people used the opportunity to make statements in support of the governor's plan.

"For 20 years I've watched jobs move across the state line to Illinois, where they can move goods quicker, easier, and more efficiently," said Brenda Miley, a Realtor with Prudential Partners Real Estate.

Greater Northwest Indiana Association of Realtors President Megan Cecil read a statement from the association in favor of Toll Road privatization. She also issued a personal plea that the governor see his plan through so that her 6-year-old daughter can someday find a good job here.

Kudos to those taking such an active part in the process. We will have a report for you on HB 1008 this Thursday from inside the State House.

Update on legislative action

2006-02-16T17:07:00.000-05:00

The Senate Appropriations Committee heard testimony on HB 1008 (Major Moves) this morning. IAR attended the hearing and voiced our support. No final committee vote was taken today, however. Amendments will likely be offered next week with a vote on Thursday the 23rd.

Next week will be a very busy week with final committee action on local government streamlining and property tax-related legislation. IAR is working to ensure that reform of Indiana's broken property tax assessment system happens this session. There is little need for us to restate our position on this topic, but we encourage you to read our op-ed letter now appearing in newspapers around the state anyway. Here is a sample:

Land assessments unfair to owners

By Karl Berron

Are you paying your fair share of property taxes? Do you trust your property assessment?

Unfortunately, according to recent research conducted by the Indiana Fiscal Policy Institute, the answer from many taxpayers should be no. Meanwhile, the next five weeks will determine whether the General Assembly will finally act to fix this troubled system.

The bottom line of the institute’s research is that many Hoosiers continue to pay more than their fair share of property taxes. Our broken assessment system is the reason. As other assessing experts have suggested for decades, the Indiana Fiscal Policy Institute recommends moving the assessment function to the county level rather than the state’s 1,008 townships.

Click here to read the full version printed by the Fort Wayne Journal Gazette.

State House scare

2006-02-15T14:15:00.000-05:00

The capitol building was shut down just a bit ago after a suspicious substance was found.

Apparently there is no longer any danger, as we are now back inside and committees have resumed their afternoon hearings.

The case of the $400 million dollar home

2006-02-13T16:13:00.000-05:00

The story of the Valparaiso (Porter Co.) home mistakenly valued at $400 million for property tax purposes made the Inman News today, and it has been picked up by mainstream media outlets all over the country (here's an example). Click here to read about it from The Times of northwest Indiana. The saga continues with this article in today’s Chesterton Tribune.

Government reorganization bills still moving forward

2006-02-13T11:50:00.000-05:00

In the 2006 session of the General Assembly, all introduced bills have now either “died” or they have passed the house of origin. To see which bills are still alive, click here (gray text indicates that a bill is dead). The session’s “second half” is well under way, but as noted by the Elkhart Truth’s editorial last Friday, most anything can still happen.

One topic that has received less attention than Major Moves and telecommunications reform is local government reorganization and consolidation. IAR supports efforts to give communities greater ability to streamline the archaic, multi-layered system we have in Indiana today. We also feel that some reforms, like fixing the state’s broken property tax assessment system, cannot afford to wait and should be addressed by legislation this session. Here is a rundown of the legislation we are watching this February and March:

* HB 1001 (Espich) – Reassigns responsibility for property tax assessment from 831 township trustee assessors to the county level.

* HB 1344 (Hinkle) – Creates a local government efficiency commission to study consolidation in Evansville and Vanderburgh County. In its current form, consolidation can only move forward if a majority of voters in both Evansville and elsewhere in Vanderburgh County approve in this November’s general election.

* HB 1362 (Buck) – Establishes a general framework for nearly all political subdivisions (including school corporations) in Indiana to voluntarily merge.

* SB 1 (Young) – This bill is part of the larger debate over the Indianapolis Works! program. It does not currently consolidate assessment at the county level or merge township fire departments, but we hope that the final version will contain these elements.

Both HB 1362 (along with HB 1344) will be heard on Wednesday the 15^th in the Governmental Affairs and Interstate Cooperation Committee. It is exciting to see that some communities are already considering how they might reorganize under HB 1362 to save tax dollars and provide better service—this report appeared in today’s Fort Wayne Journal Gazette (full text here):

The discussion complements the General Assembly’s consideration of a proposal to give local governments wide leeway to consolidate without seeking legislative approval. The House approved the proposal, House Bill 1362, by a 73-23 vote, and the Senate Government Affairs and Interstate Cooperation Committee is scheduled to consider it Wednesday.

With many local officials keeping mum or voicing skepticism about consolidation, the council wisely wants to begin now to consider specific consolidations.

“We want to keep the debate alive,” said Councilman Cal Miller. If the General Assembly approves the enabling legislation, Allen County government will have a head start in planning consolidation.

Outlook good for Evansville-area real estate

2006-02-13T10:27:00.000-05:00

From last Friday’s Evansville Courier & Press (read full article here):

Low real estate prices and a central location make Evansville an attractive option for businesses considering an expansion or relocation, according to Dannetta Hiatt of F.C. Tucker Emge.

But, a lack of suitable large-scale industrial space is forcing many of those firms to go elsewhere, Hiatt said during the annual "State of Real Estate Report," presented Thursday at the Executive Inn.

News from Indiana Economic Digest

2006-02-10T11:20:00.000-05:00

* Johnson County homebuyers move up: Jump in average price of new homes due to families wanting more space (Link)

* Downtown Valparaiso rail stop in talks: Consultant says could lead to residential and commercial development beneficial to city (Link)

* State of Greater Lafayette Real Estate: Overall status encouraging (Link)

* Homes opposed in Whiteland: Residents say they want commercial development, not residential (Link)

NW Indiana REALTORS® endorse Major Moves

2006-02-10T10:23:00.000-05:00

HB 1008 was heard in the Senate Appropriations Committee yesterday but no vote was taken. Some changes to the legislation are being discussed, but overall support for the plan continues to grow. This letter of endorsement appeared in today's NW Indiana Times:

The Greater Northwest Indiana Association of REALTORS®, representing nearly 2,500 real estate professionals in Lake, Porter, Jasper and Newton counties, applauds Gov. Mitch Daniels for bringing forward the bold Major Moves plan.

After careful examination, we feel this proposal offers tremendous opportunity for both our region and Indiana as a whole. The plan appears to return much of the value created by the Toll Road lease to our communities and the Regional Development Authority.
Investment in our transportation infrastructure is vital and job creation is our number one economic development priority.

For these reasons, we endorse the Major Moves program and HB 1008.

Megan Cecil, 2006 President, Greater Northwest Indiana Association of REALTORS®

A new website has also been launched that addresses some of the most common questions about the program. Click here to view the official Major Moves website.

New home construction in Central IN

2006-02-08T10:09:00.000-05:00

According to the NY Times’ Walk-Through real estate blog, Marketwatch has reported that cancellation rates for Centex homes were up in several markets during the last quarter. While most the areas noted were formerly "hot" markets like Phoenix, San Diego, and Sacramento, Indianapolis was also mentioned.

By itself, however, this hardly indicates slowing demand for new housing in Central Indiana. According to a January 29^th news release from BAGI (click here for the full release), permit activity has been stable:

Single-family permit activity in the Indianapolis nine-county area unchanged in December compared to December of last year, according to figures compiled by the Builders Association of Greater Indianapolis. December permits numbered 826 compared to 826 for 2004. A total of 13,093 permits have been issued year-to-date, a fractional increase from a total of 13,046 for 2004.

Property taxes and eminent domain

2006-02-07T23:44:00.000-05:00

HB 1001 and HB 1010 (dealing with property taxes and eminent domain, respectively) were heard today in Senate committees, although both bills were "held" and will be voted on at future meetings. The initial hearing on HB 1001 in the Tax and Fiscal Policy Committee lasted more than 4 and ½ hours. IAR testified in support of streamlining the property tax system by moving assessment responsibility from townships to the county level.

Township officials testified against the provisions in HB 1001 that would reassign the assessment function to the county assessor. Their main argument seemed to be that recent legislation mandating better training would address most of the system's problems. IAR disagrees, and we feel that the level of certification is not the central issue. Even if all 1,008 township-level assessors were fully certified, the system would still have far too many units to be manageable and would still lack accountability.

We went to the webpage of the International Association of Assessing Officers to research how Indiana's structure differs from other states. We found a survey of assessing practices in all 50 states and Canada by Richard Almy, one of the leading experts in this field (click here to view the PDF). The map labeled Exhibit 3-4 on the seventh page (or page 47 within the document) is rather compelling. It shows that Indiana is one of only a handful of states with 1,000 or more assessing units. Most states place responsibility for this function at the county level. Texas has only 253 units, and California has just 59. Ohio has 88 assessing jurisdictions and Kentucky has 120.

While it is true that a few states have more assessing jurisdictions than Indiana, it must be noted that some have a mixed system with both township and county-level assessing (like Illinois). Others like Michigan and Wisconsin use municipalities as the unit of assessment, which avoids Indiana's problem of the township / county overlap.

As we have written here before, there are many good assessors trapped in a bad system. IAR will continue to push for a streamlined structure that will improve uniformity and taxpayer equity.

HB 1001 to be heard today

2006-02-07T08:38:00.000-05:00

As noted in this Indianapolis Star article, HB 1001 (Espich) will be before the Senate Tax and Fiscal Policy Committee today. IAR will be there to speak in favor of several components of the bill, especially the reassignment of assessing duties from township trustees to the county level.

The Indiana Township Association (which opposes consolidating the assessment function) recently posted its position on HB 1001 on its website here, and we expect these points to be raised today. Check back for an update on the hearing this afternoon.

Orange Co. real estate market hits jackpot

2006-02-06T09:19:00.000-05:00

Laura Lane of the Hoosier Times reports that the long-awaited casino in Orange County has created a real estate mini-boom. You can read the full article here courtesy of the Indiana Economic Digest.

Homes are selling for 25 to 30 percent more than they would have gone for just two years ago. Some developers report getting up to twice what they paid for properties. And prices will continue to climb as the French Lick Springs Resort & Casino's opening date, late this year, gets closer.

"Marketing time used to be six months, or longer," said [E. Brooks] Galloway, who has seen about a 50-percent increase in the number of listings at his agency. "Now, fairly priced properties are on the market three months or less, sometimes just a day or two."

Beige Book report on Midwest economy

2006-02-03T10:55:00.000-05:00

The Federal Reserve Board released a series of its Beige Book reports about a week back (link). According to the FRB website, these reports are generated from anecdotal information on current economic conditions through reports from bank and branch directors and interviews with key business contacts, economists, market experts, and other sources .

As you can see here, our state is split with central and northern Indiana in the 7th District (based in Chicago) and southern Indiana in the 8th District (based in St. Louis). With apologies to those in our southern counties, here are some highlights from the January 18th report for the 7th District:

Auto dealers in northern Indiana reported a pickup in demand in December, while dealers in Wisconsin said that sales remained slow.
Construction and real estate activity was mixed by both location and market segment. Residential activity was gradually slowing from record levels. One Chicago-area homebuilder noted that suburban homes were taking longer to sell and that builders were increasing incentives to close deals, while a Realtor in Wisconsin reported taking a less aggressive stance on list prices.
Commercial construction and real estate continued to expand, but at a slower pace than in the previous reporting period. Activity picked up in Indiana, Wisconsin, and mid-Michigan, but was flat in the Chicago area. Office vacancy rates fell in Indiana and southeast Michigan.
The manufacturing sector strengthened in December. Nationwide light vehicle sales picked up at the end of the year, and one contact noted that the gain did not reflect a boost in fleet sales to achieve end-of-year sales goals.
Activity in the construction equipment industry continued at a brisk pace. Industry participants were optimistic about the outlook for 2006, saying that strong demand for nonresidential building would offset any slowdown in housing.
District toolmakers reported solid orders growth and expressed confidence about the outlook for 2006. Conditions in the steel industry continued to be strong, with growth in orders across several end-user markets. Steel inventories were below desired levels, and they were being rebuilt.
Lending activity moderated further. Bankers noted declines in applications for both home-purchase and refinancing mortgages. Usage of home equity lines of credit remained stable. Reports on mortgage credit quality were mostly favorable, though one Chicago-area banker expressed concern that home equity loan delinquencies continued to drift up.
There were mixed signals regarding farmland values, with more contacts reporting that values have stopped rising and leveled off.

Major Moves passes House

2006-02-01T16:28:00.000-05:00

After one of the most extensive and spirited debates of this session, HB 1008 passed the Indiana House of Representatives on a 52-47 party-line vote. The debate lasted approximately four and one-half hours.

Housing market roundup continued

2006-01-30T09:33:00.000-05:00

We didn’t cover northwest Indiana in Saturday’s post, but the Post-Tribune ran a story on the local housing market yesterday (Jan. 29^th). The focus is on the strong price appreciation of homes in the “Tri-Town Area” of Dyer, Schererville, and St. John. Nancy Smith, CEO of the Greater Northwest Indiana Association of REALTORS®, reports that demand is fueled by buyers from Illinois seeking easy commutes to Chicago-area employment and relatively lower taxes. You can read the full article here courtesy of the Indiana Economic Digest.

Quick housing market roundup

2006-01-28T19:48:00.000-05:00

Local housing markets received some attention from at least three major Indiana newspapers recently (thanks in large part to the efforts of local boards), and here is a quick roundup:

Northeastern Indiana (Jan 12th)

Home construction slowed by 1% in 2005 over 2004 in Allen County. However, sales of existing homes were up by 1% over the same period according to the Fort Wayne Area Association of REALTORS®. (Link to full story in the Journal Gazette)

Southwestern Indiana (Jan. 26th)

John Czoer, President-Elect of the Evansville Area Association of REALTORS®, is optimistic for 2006 following a strong 2005 for southwestern Indiana. In Vanderburgh County, prices were up 5.9% over 2004 and the total number of homes sold was up 3.4%. Read the entire Courier Press article here.

Central Indiana (Jan. 28th)

The Metropolitan Indianapolis Board of REALTORS® reported that volume and prices both increased over 3% in 2005. You can read the full text here, but here’s a snippet from today’s Indianapolis Star article:

Moderate price appreciation and lower mortgage interest rates helped sustain growth, said Jim Litten, president of F.C. Tucker Co.

"The market is very healthy, but how long can we sustain this growth?" he said.

HB 1001 (Property taxes) passes House

2006-01-26T17:09:00.000-05:00

The bill that contains a one-time boost in the state-paid Homestead Credit, enhanced taxpayer notification, and reassignment of assessing duties from township trustees to the county level has passed the House by a vote of 97 to 1. And yes, the provision that eliminates property taxes in 2009 is still in the bill. Senator Luke Kenley (Noblesville) will sponsor HB 1001 in the Senate.

Testing a new way to post

2006-01-26T14:30:00.000-05:00

We thought we would try to post via email from inside the State House today. We hope that this can be a way to provide instant updates on legislative activity.

Property taxes eliminated?

2006-01-26T10:39:00.000-05:00

It is probably too soon to break out the champagne, but an amendment offered by Representative Chet Dobis of Merrillville amended into HB 1001 (Espich) late last night would eliminate property taxes in Indiana by 2009. That’s right— with the exception of debt obligations already entered into, no more property taxes.

The amendment did not suggest replacement revenue for the more than $6 to $7 billion in property taxes that would no longer be collected for schools and local government. However, Rep. Dobis suggested that it was necessary to set a deadline that would prompt major property tax reform.

Lesley Stedman Weidenbener of the Louisville Courier-Journal covered this development here. As her article indicates, even some of those who supported the amendment last night are not optimistic that this approach will work. The conventional wisdom is that this provision will disappear before the end of session. While this is most likely true, a similar deadline for eliminating school operating costs paid by property taxes without replacement actually sailed through Michigan’s legislature a few years ago. Lawmakers then returned later to figure out how to replace the funding from other sources.

Is this going to happen this session? It is doubtful, but stay tuned…

NY Times Real Estate Blog

2006-01-25T12:32:00.000-05:00

The New York Times has a great real estate-related blog going now. It is called "The Walk-Through" and you can view it here. It isn't focused on NYC real estate like Curbed.com but about housing, economics, real estate market and business trends, and much more.

For example, one recent post introduced me to Indeed.com, which is a "meta-search engine" that tracks online job listings. But the coolest feature is this interactive map (click here) that graphically displays the job listings per capita for the 50 largest MSAs in the country. It is interesting to see how Louisville, Cincinnati, Chicago, and Indianapolis compare with other markets.

We’re NOT number one

2006-01-23T17:33:00.000-05:00

According to a new Inman News article, Indiana is not the number one state when it comes to foreclosures. According to data from RealtyTrac, Indiana was still in the top ten for 2005, but the Hoosier State had a lower foreclosure rate than the top four of Florida, Colorado, Utah, and Texas.

Major Moves takes a big step forward

2006-01-23T10:44:00.000-05:00

IAR was one of the groups standing with Governor Daniels this morning as he announced the winning bid for the Indiana Toll Road operating lease. As WIBC is reporting, the selected offer appears to be $3.8 billion. This will certainly give the Governor’s Major Moves plan additional momentum, and we expect committee action on HB 1008 very soon.

Assessment reform is not personal

2006-01-17T18:10:00.000-05:00

Not surprisingly, Governor Daniels’ recent call for moving assessment responsibility from the township to the county level is being met with some resistance. Today’s Howey Political Report Daily Wire noted several newspapers articles about opposition to the plan. We were especially struck by the ending of Michele McNeil’s piece in today’s Indianapolis Star (click here for the full article):

"It's hard not to take this personally," [Warren Township (Marion Co.) Assessor William] Birkle said. "We all want nothing more than fair and equitable assessments. And that's what we're trying to do."

Unfortunately, debate over whether or not assessment should be done at the county level has sometimes devolved into attacks on the competency of assessors. IAR feels that such a debate misses the point—all Hoosiers, including assessors and taxpayers, suffer from a system with too many units of administration and accountability. Assessors should not take the cry for reform (which is not new) personally, as it is primarily about structural issues.

We applaud the “nearly 200 township and county assessors” that are gathering this week for more training (although we must note that this is still less than one-fifth of Indiana’s 1,008 township-level assessors and 92 county assessors). However, training cannot change the fact that 1,008 different interpretations and applications of such training is more likely to lead to variations in assessments than county-level assessment.

Our position is best explained by the quote in the Star article from IAR staff:

"To me, this is not a question of efficiency. The real goal is not to squeeze every last dollar out of assessors, though there may be money saved. The real money at stake is taxpayer money," said Karl Berron, a lobbyist with the Indiana Association of Realtors.

The Realtors, along with associations representing counties, and cities and towns, support this idea, which is contained in House Bill 1400. The bill hasn't been scheduled yet for a committee hearing.

"If I'm not paying enough property taxes, then someone else is paying too much," Berron said. "This is about taxpayer fairness."

The state’s own equalization study showed that significant disparities exist from county to county and across townships within the same county. More training may help at the margins, but there is a reason why only one other state in the US uses townships as the basic assessment unit throughout the state.

Many good assessors are trapped in a bad system. Neither Governor Daniels nor IAR wants to see anyone’s job eliminated. But let’s fix what we all must admit is an antiquated system and give taxpayers more accountability by putting one person in charge per county.

Reforming Indiana's assessment system

2006-01-17T10:56:00.000-05:00

The following is a statement issued by IAR after the Governor's remarks in his State of the State address regarding moving responsibility for assessment to the county level. This is a high priority for IAR this session, but it will certainly generate significant resistance from some township offcials. Later today we will examine news coverage of the emerging debate over this much-needed reform.

The Indiana Association of REALTORS® applauds Governor Daniels for his call to consolidate property tax assessment at the county level. REALTORS®, perhaps more than any other group, see the inequities caused by our antiquated system on a daily basis.
The reason this reform is needed now is simple. In far too many cases, Indiana property owners pay more than their fair share of taxes under the current system.

For too long this issue has been swept under the rug as policy makers have debated other aspects of our antiquated property tax system. Meanwhile, assessment experts have been recommending this reform for nearly 100 years. National studies recommending county level assessment began appearing in 1907. State studies recommending consolidation began in the early 1950’s.

Even a 2005 study by the Indiana Township Association supports the position that county level assessments would be both more accurate and cost significantly less. The study states:
“It is likely that countywide assessment would create greater consistency of property assessments within the county because the larger scale of operations could permit hiring of personnel with greater skill and would permit administrative controls across the entire county.” (Page 7)
It further states:
“While we do not presume to calculate a savings estimate for the state as a whole, the evidence available here do indicate that substantial cost savings could result if the primary assessment function were transferred from the township to the county level.” (Page 21)

In case we needed more evidence of the discriminatory nature of the current system, it was delivered in the recent Tax Equalization Study conducted by the Indiana Fiscal Policy Institute. A key finding of their extensive analysis is that the current assessment structure systematically results in taxpayers paying more than their fair share of property taxes in far too many instances. The study also produced yet another call to transfer assessing responsibilities from the 1008 townships to the county level.

In calling for this reform, Governor Daniels has placed the taxpayers of Indiana first. He has correctly pointed out that this is an issue of fairness. While consolidating assessment would likely result in cost savings, the real money at stake here is that of taxpayers. Hoosiers pay nearly $6 billion in property taxes annually. They deserve to pay their fair share, and no more.

HB 1008 (Major Moves) being heard this morning

2006-01-17T10:21:00.000-05:00

HB 1008 is the vehicle for the Governor's Major Moves transportation plan. Authored by Representative Randy Borror (R-Fort Wayne), HB 1008 would allow public-private partnerships to bring capital into Indiana for infrastructure investment. IAR stood with Governor Daniels last Friday and endorsed this proposal.

Discussion of this legislation is sure to be very interesting, and I encourage you to take advantage of a new opportunity to watch committee hearings. Click here to launch live video of the House Ways & Means Committee hearing.

NOTE: Committee video is not yet being archived, so if you are unable to see the video the hearing may have ended for the day.

Weekend coverage of Friday's press conference

2006-01-16T19:19:00.000-05:00

More on IAR's endorsement of the Major Moves transportation plan from Saturday's Northwest Indiana Times:

"Our members are literally on the front lines of selling Indiana every day," said Karl Berron, the top lobbyist for the Indiana Association of Realtors.

"When we looked at the breadth of projects, the pace with which they're accelerated, this was a no-brainer for us. We're thrilled to stand here today to endorse the plan."

The Realtors also support Daniels' plan to abolish township assessors and shift their duties to the county level. That plan need legislative approval, as does any Toll Road lease.

Click here to read the full article.

IAR endorses Major Moves program

2006-01-13T13:13:00.000-05:00

Several REALTORS® from all over Indiana joined Governor Mitch Daniels in his State House office this morning to announce IAR’s endorsement of the “Major Moves” transportation plan.

Click here to see a photo provided by WISH-TV (Channel 8) and read a brief article on this announcement.

To hear an audio replay of this event, click here.

2006 State of the State address

2006-01-11T23:34:00.000-05:00

Governor Daniels just delivered his second bold State of the State address, and he again surprised most observers of Indiana government. As IAR’s own Karl Berron was quoted in today’s Indianapolis Star, the Governor "continues to be willing to do things that insiders like me believe are the third rail of Indiana politics." (To read Mary Beth Schneider’s full article, click here.)

His proclivity for tackling controversial issues was certainly on display this evening. But while the headlines in tomorrow’s papers may focus on the proposed cigarette tax increase, other items deserve as much or more attention. We were especially excited by the Governor’s focus on reforming Indiana’s antiquated system of property tax assessment.

The Governor tonight called for the consolidation of assessment at the county level. Here is the relevant portion from a transcript of the address:

“Redundant and antiquated government makes property taxes too high and decision making too slow. Scattered authority produces bizarre tax assessments in which identical houses just blocks apart are taxed at widely different levels….I ask the local officials of our state to endorse and help effect the end of the archaic township assessment system and the transfer of this failed process to the level of our 92 counties.”

IAR has long supported this change, and we plan to be very vocal in our support. A press conference has been scheduled for tomorrow to explain the details of the specific proposal, and we will report here soon after.

Daniels to give State of the State address tonight

2006-01-11T13:22:00.000-05:00

The State of the State address will be given at 7 pm tonight. If you miss the live broadcast on radio or television, it looks like it will be available online here. IAR will be watching and posting our thoughts shortly after the speech.

House Republicans offer property tax proposals

2006-01-09T13:26:00.000-05:00

The Republicans in the Indiana House of Representatives announced their 2006 caucus agenda this morning, and you can view a full list of the various proposals here.

It is worth pointing out a few highlights related to property taxes that will greatly interest REALTORS®. Please note that the following is IAR’s interpretation of these proposals as presented this morning—the actual legislation has not yet been reviewed:

Consolidate assessment at the county level

Cap the amount of property tax dollars used for child welfare services with the state assuming responsibility for growth

For property taxes due this year, provide a one-time special 12% credit for Homestead Credit-eligible properties that should more than offset expected impacts of rising child welfare levies

Give taxpayers more information regarding changes in local spending and property tax rates

IAR hopes that this means adopting a program like Florida’s where the “TRIM” notice tells a property owner how his/her tax bill will be impacted by proposed spending changes before tax rates are finalized. Click here to view a sample of the notice that Florida taxpayers receive.

Limit the growth in the property tax rates on residential property to 3% each year

Institute a statewide tax cap for residential property that limits the yearly amount due to 2% of assessed value

If this is similar to legislation passed in last year’s budget bill, a 2% cap means that the annual taxes on a $200,000 home cannot exceed $4,000, for example. In some counties, primarily Lake and St. Joseph Counties, such levels of property tax burdens are not uncommon.

State House update: Eminent domain bills passes committee

2006-01-09T13:07:00.000-05:00

HB 1010, authored by Rep. Dave Wolkins (R - Winona Lake), just passed out of the House Judiciary Committee by a vote of 10-0 (one amendment was adopted). IAR supports legislation that can further protect private property rights without stifling economic development, and HB 1010 appears to strike such a balance.

Gov. Daniels to suggest eliminating township-level assessing?

2006-01-06T14:20:00.000-05:00

A brief Q&A with Governor Daniels was posted by The Northwest Times on its website (www.nwitimes.com) today, and it contains a very exciting hint about the contents of next week’s State of the State address:

Question: The Indiana Fiscal Policy Institute study suggests the state should get rid of township assessors and trustee assessors. Are you going to call for that in your State of the State speech next week?

Daniels: "I’m not going to give the speech away today, but I’ll just say that they were right. It’s intolerable that essentially identical properties, often not far apart, are taxed at very different rates. This problem was supposed to be fixed some time ago. It hasn’t been, and so we’ll put it on the list of things that need to be addressed. We need equity and we also, I think, waste a lot of money in the way that we have historically assessed property.

As you know, IAR has written about this topic many times and is thrilled that this may become part of the Governor’s agenda for the 2006 session of the General Assembly. More to come on this topic soon…

Housing outlook article in the FW Journal Gazette

2006-01-05T11:37:00.000-05:00

The Fort Wayne Journal Gazette ran a story yesterday entitled “Housing boom cooling: Region’s growth slowing; could nation’s follow?” (read the full article here). Despite the headline, the article contains some fairly optimistic views on the local economy and housing market in northeast Indiana. Here is an excerpt:

Sales of existing homes in Allen County inched less than 1 percent higher in 2005, according to preliminary statistics from the Fort Wayne Association of Realtors. Realtors had sold 5,393 homes as of Dec. 30, according to the association’s Multiple Listing Service. In 2004, Realtors sold 5,388 houses.

New home construction has dipped from record levels reached in 2003. As of Dec. 27, the county had issued 1,731 home construction permits – about 2 percent less than in 2004, according to the Allen County Building Department. Builders received 1,768 permits in 2004.

The strong sales figures reflect buyers’ confidence in the local economy, said Daniel Quintero, owner of real estate firm Quintero and Associates Inc. Verizon created about 200 full-time jobs to build and operate its fiber-optic network, and the medical industry also is expanding. Buyers decided to invest in new homes because of the upswing in the local job market in the last two years, Quintero said.

“They’re more confident in their jobs and the economy,” he said.

Economic (and housing) outlook for 2006 from IU

2006-01-04T17:55:00.000-05:00

The Indiana Business Research Center (part of the Kelley School of Business) has just published its 2006 economic outlook. In this issue of the Indiana Business Review, Jeffrey Fisher of IU’s Center for Real Estate Studies examines the housing market. Unfortunately, there are no forecasts specifically for Indiana, just national projections for 2006-07 by the National Association of Home Builders.

This same issue of the Indiana Business Review does have a series of local outlooks for individual economic regions with some focus on real estate. The South Bend-area report notes that strong commercial development is expected in 2006 as occupancy rates rose in 2005. The Richmond-area outlook contains this news on the East-Central Indiana housing market:

The housing sector is doing reasonably well after a slowdown in the first half of the year. There is an uptick in home prices partly due to the influx of professional and management people in [the Richmond-Connersville-New Castle area economy].

However, the author of the Richmond-area section also predicts that home prices will slow if the Federal Reserve continues a tightening policy.

You can view a PDF of the entire publication here.

Indiana lawmakers blogging

2005-12-30T13:20:00.000-05:00

The purpose of the IREN Blog is to bring you commentary from IAR on news, issues, and public policies impacting Indiana’s real estate industry. We thought you might find it interesting that three of our 150 state legislators are also using blogs:

Senator David Ford (R-Hartford City)

Representative Ryan Dvorak (D-South Bend)

Representative Steve Heim (R-Culver)

While this means that only 2% of the General Assembly currently has a presence in the blogosphere, IAR predicts that many more legislators will be blogging by the end of 2006. And on that note…

…Happy New Year

from the

Indiana Association of REALTORS®!

FORTUNE telling: Indiana home prices to rise in the new year?

2005-12-29T12:13:00.000-05:00

WISH-TV of Indianapolis has picked up on a report in the December 26^th issue of FORTUNE magazine (read article here) which contains forecasts of home price changes over the next two years:

Fortune predicts prices in New York City will drop 3.5 percent two years from now. It projects at 2.9 percent drop for San Francisco.

"They've had to deal with the air going out of the bubble in a lot of those areas so people will invest in properties at a certain price and then the value go down,” said Beckie Agan, president of the Metropolitan Indianapolis Board of Realtors.

Indianapolis has not had that problem. The housing market here has seen consistent two to three percent gains for the past several years. If Fortune Magazine is right about the next two years, property values will go up more than they have in years.

The FORTUNE report looked at the largest 100 metro areas in the country (full rankings here). The housing markets of most interest to Indiana REALTORS® are listed below with the projected appreciations rates for 2006 and 2007.

Metro Area (2006 Rate; 2007 Rate)
Cincinnati-Middletown (6.0%; 6.6%)
Indianapolis (5.6%; 5.4%)
Louisville (5.0%; 4.6%)
Gary (4.4%; 3.4%)

The numbers for the Gary area may not be astronomical, but the research used by FORTUNE by Moody’s Economy.com indicates that home prices in nearby Chicago-Naperville-Joliet will rise only 1.1% in 2006 and just 0.2% in 2007.

IREN Blog is back

2005-12-28T14:34:00.000-05:00

Apologies for the lack of activity here on the Indiana Real Estate News (IREN) Blog, however, we will now be returning to a regular posting schedule.

The first priority is an update on the status of HB 1001, which contains legislation to shift funding for child welfare programs away from property taxes. The following comes from A bdul Hakim-Shabazz, host of the Indianapolis-based “Abdul in the Morning” radio program and a new contributor to the excellent Indiana Barrister blog (read orginal post here):

Indiana House Republicans may have to scale back some of their plans to provide Hoosiers with property tax relief. Speaker Brian Bosma told me this morning on News Talk 1430, WXNT that because of the state's recent budget shortfall, their plan to assume the child welfare portion of your property tax bill will have to be adjusted.

The above-mentioned “shortfall” refers to recently revised projections of the tax revenue expected to fill state coffers through June 30^th, 2007 (read details of the new forecast here). Speaker Bosma’s comments would indeed seem to confirm what was reported by Lesley Stedman Weidenbener in the Louisville Courier-Journal back on December 15^th:

As a result, House Ways and Means Committee Chairman Jeff Espich, R-Uniondale, said the change in the forecast will force him to reassess his plan to shift the cost of some services for abused and neglected children to the state budget. Money for those services currently comes from local property-tax revenues.

Espich's proposal would cost the state $53 million next year, $173.5 million in 2007 and more than $207 million in 2008, according to a fiscal analysis by the Legislative Services Agency.

"We'll have to re-evaluate whether we can afford to do it permanently, on an ongoing basis and do it within a balanced budget," Espich said.

The state takeover may have to happen more slowly, he said, or it might be just a one- or two-year program while lawmakers seek another solution to increasing property taxes.

"We will not unbalance the budget," Espich said.

IAR may have had some concern over the lack of a long-term funding plan for removing child welfare levies, but we hope that this proposal does not disappear. State responsibility for these services remains a laudable goal and this issue should stay on the front burner in 2006 even if a more complete solution is not attainable until the 2007 budget-writing session.

An unwelcome holiday surprise in Brown Co.

2005-12-09T19:12:00.000-05:00

What’s worse than a lump of coal in one’s stocking? How about a property tax bill 20% greater than the prior year’s bill:

Property taxes due week before Christmas
(from the 12/7/2005 Brown County Democrat)

Brown County homeowners received an early Christmas present from the treasurer’s office last week — a property tax bill that is 20 percent higher than the previous year.

Statements for 2003 pay 2004 taxes were mailed on Wednesday, November 30, and are due Friday, December 16 — one week before Christmas. The good news is that any overpayments previously made should show up as credits on this statement.

And no, that isn’t a typographical error where it states that these are the 2003-PAY-2004 tax bills. Brown County has really fallen that far behind the normal billing cycle due to its disasterous reassessment process.

Leveraging Indiana's housing market to grow the economy

2005-12-07T19:53:00.000-05:00

A number of formerly red-hot housing markets in coastal communities may finally be starting to cool. We heard from NAR yesterday that this October’s Pending Home Sales Index was about 3% below October 2004:

“David Lereah, NAR’s chief economist, says a decline was expected. “The drop in pending home sales is an affirmation that we are experiencing a modest slowing in the housing sector,” he says. “The index is pointing to a soft landing for home sales, which will help to correct the inventory shortages that have dominated housing over the last five years. This should restore balance to the market.””

Despite the possible slowdown, prices in many metro areas are likely to remain at relatively high levels with respect to median family incomes. As a result, homebuyers in high-priced areas have fled in search of more affordable housing options. W e noted a New York Times article on this topic last month, and today we found this CNNMoney.com piece:

‘Take this house and shove it’: More and more Americans are moving to get away from overheated housing markets

“California suffers a net loss of about 100,000 residents a year to other states, according to Economy.com. In recent years, many have cashed out their rapidly appreciated homes and moved to Arizona, Washington, and Oregon.

But now that prices have climbed in those states as well, the latest trend is that Californians are turning to the Midwest, where spacious houses are available for half of the cost of similar space in Los Angeles.

"It makes increasing sense if you can buy more house and still live in a good area," says Conrad Egan, president and CEO of the Center for Housing Policy, a non-profit group that seeks to make sense of the nation's housing policy.”

Such market shifts create an opportunity for Indiana to turn a weakness (slow home price appreciation) into a strength. IAR feels strongly that our housing affordability can be a positive selling point in economic development; however, we cannot focus only on price. Any marketing effort built around housing must help to dispel myths and educate those outside of Indiana about the diverse options that many do not know of and the quality of life.

Ask a non-Hoosier to imagine a house in Indiana, and they are unlikely to picture a condo in a vibrant urban downtown, a beautiful lake cottage in northeastern Indiana, a cabin in the rolling hills of southern Indiana, or an affordable suburban home for Chicago-based commuters.

We are pleased with the efforts of one Indiana mayor to seize this opportunity. Mayor Matt McKillip has created a new program to recruit college-educated workers to his city of Kokomo. His plan touts both low home prices and the area’s quality of life. Here is a sample of the official announcement on November 10^th (click here for the full press release):

“Mayor Matt McKillip announced a unique economic development incentive program on Thursday evening designed to attract more college-educated workers to live in Kokomo. The program, coined "Project Grow Kokomo," offers college-educated persons who work in Howard County but reside outside of the Greater Kokomo Region a financial incentive to move to Kokomo. Through the program, qualified persons can apply for a forgivable loan in an amount up to $10,000, or ten percent of the purchase price of a home within Kokomo's city limits, whichever is less. If the homebuyer stays in Kokomo for five years, the loan will be forgiven.”

"Our residents enjoy one of the most affordable quality housing markets in the country," said Kathy Harbaugh, Executive Vice-President of the Realtors Association of Central Indiana. "People should really give Kokomo a serious look and consider all that the area has to offer."

Kudos to the folks in Kokomo. More information on the mayor’s plan can be found here.

Different fates for two southern Indiana condo projects

2005-12-07T15:55:00.000-05:00

One condo development is moving forward…

Condominium idea catching on in downtown Evansville

Evansville Courier & Press, 12/6/2005

“When Ben Kunkel and Chuck Harper became friends in the early 1990s while attending North High School, they never dreamed they would team up together 12 years later on a major renovation project Downtown.

Their careers took completely different directions, but their friendship endured.

Now the two 1993 North graduates are the backbone behind the proposed $2.2 million overhaul of the old JC Penney building at 508 Main St., which Mayor Jonathan Weinzapfel announced Monday.”

…while another faces a more uncertain fate.

Jeffersonville mayor to veto city council condominium development decision

(Jeffersonville) Evening News, 12/6/2005

“A rezoning of property along Utica Pike approved by the Jeffersonville City Council on Monday will be vetoed by Mayor Rob Waiz today.

“I’m going to go ahead and veto the zoning ordinance on the Kempf property,” Waiz said in a telephone interview this morning.

“Well, God bless America,” said David Lewis, an attorney representing some of the opponents of the rezoning. “I didn’t see this coming.”

On Monday, the council voted 4-2 to rezone one of four acres Thomas and Nancy Kempf own at 2413 Utica Pike from single-family to limited-multifamily zoning. The couples plans to raze their 6,000-square-foot home and replace it with Casa Del Rio Condominiums. The couple plans to live part-time in one of the condos and market the other three for $900,000 to $1.1 million each.

The vote to approve the rezoning came despite a 6-3 vote by the city’s Plan Commission a week ago, and impassioned opposition from several neighbors of the proposed development.”

Another blogger on impact fees

2005-12-06T12:24:00.000-05:00

Tracy Warner is the editorial page editor for the Fort Wayne Journal Gazette. He publishes an interesting blog which featured this post on impact fees yesterday:

Park tax on new homes

“As Indiana cities and towns struggle with their budgets, they will increasingly seek new ways to raise money -- in other words, new taxes by other names.

Take Valparaiso, which is beginning an "impact fee" of $931 for every new house that is built, with the money going to the city's parks district. As The Times of Northwest Indiana reports:

Under state law, communities can impose a fee on developers to recover the anticipated costs of new development on roads, parks, storm drainage, sanitary sewers and the water system. The money is collected at the time a building permit for a home is obtained, and the money has to be spent in the area of the development.

Although approved by the council, the city can't collect the fees until six months after passage. The fee increases to $1,131 on Jan. 1, 2008, and to $1,331 on Jan. 1, 2009. The mayor has to appoint a three-member impact fee review board. The board members serve five-year terms, and the board must include a real estate broker, a licensed engineer and a certified public accountant.

(Parks Director Steve) Doniger said the money, which is expected to grow from the $100,000 to $150,000 in the first year, won't be used to create any new main venues. It will be used mostly for playgrounds, basketball courts, tennis courts, ballfields and shelters. The one exception might be a sprayground, an interactive water play area for kids, and an addition to the skate park.

How long will it take for other cities to jump on this idea?”

Note that state law requires a real estate broker to serve on the mandatory board that reviews appeals of impact fee assessments. You can read the entire state statute (which was first established in the early 1990's) on impact fees here.

Indiana housing market report roundup

2005-12-05T11:04:00.000-05:00

The Indiana Economic Digest tipped us off to reports on market statistics from three major areas of the state. Unfortunately, none of the news from the Northwest Indiana Times, the Evansville Courier & Press, and the Greenfield Daily Reporter was terribly positive.

Northwestern Indiana (Lake and Porter Counties)

Home sales chill in October

Porter County sees decline of 18.6% from 2004

November 29^th, 2005

“The numbers in Northwest Indiana appear to reflect what's happening nationally, but it's too early to predict a trend locally, said Nancy Smith, executive vice president of the Greater Northwest Indiana Association of Realtors.

September sales were high in Northwest Indiana, Smith said, climbing 15.5 percent from September 2004, to 764.

"Until we have another month to compare (October) to, it's hard to come to any conclusions," Smith said.”

Southwestern Indiana (Evansville area)

Area's housing market 'very stable'

Home prices increase 7.9 percent in three counties

December 2^nd, 2005

“Schulz [Mike Schulz, President of the Evansville Area Association of Realtors] theorized the area is shielded from bubbles as it doesn’t have huge appreciation numbers of from 25 percent to 40 percent like some other parts of the nation.

The percentage of appreciation in Vanderburgh, Warrick and Posey has averaged from 2 percent to 6 percent the past 10 to 12 years, Schulz noted, predicting another good year in 2006.”

Central Indiana (Hancock County)

Hancock County home sales lag for third month in a row

December 3^rd, 2005

“"Sales normally take a dip as we get closer to the holidays," said Karen Beeson a local realtor who works in Hancock, Marion and Hamilton counites.

According to the figures, most counties in Indiana posted a decline in the number of homes sold in October as compared to the October 2004 figures.

Home sales handled by the Metropolitan Indianapolis Board of Realtors in Hancock County fell from 95 last October to 84 last month. It represented a 12 percent drop in sales and was the third month in a row in which sales dropped.”

County officials talking about reorganization and assessing

2005-12-04T22:47:00.000-05:00

The Fort Wayne Journal Gazette covered the annual convention of the Indiana Association of County Commissioners in Saturday’s paper (link to the article here). There continues to be much chatter about local government restructuring around the State House, and we at IAR hope that some of the ideas mentioned in Benjamin Lanka’s article become policy proposals:

“Allen County Commissioner Marla Irving said the suggestions varied from cutting the number of commissioners per county from three to one, expanding the number of commissioners to five and eliminating county councils.

She said a lot of discussion time was spent on consolidating township assessors and the county assessor.

Irving said one idea that was intriguing to her was to eliminate the positions of county auditor and treasurer as elected positions and put them on a board of finance to serve under the commissioners.

“Maybe some of the other offices could be under the commissioners instead of elected,” she said. “That maybe should be where we start.””

Whenever the topic of local government reorganization comes up, it is always mentioned that some county-level offices are required by Indiana’s Constitution. There is often confusion over which offices are expressly mentioned, so we looked it up:

Article 6; Section 2

There shall be elected, in each county by the voters thereof, at the time of holding general elections, a Clerk of the Circuit Court, Auditor, Recorder, Treasurer, Sheriff, Coroner, and Surveyor, who shall, severally, hold their offices for four years; and no person shall be eligible to the office of Clerk, Auditor, Recorder, Treasurer, Sheriff, or Coroner more than eight years in any period of twelve years.

The idea of a board of finance appointed by and accountable to a county executive instead of separately elected auditors and treasurers has a lot of merit. However, it appears that there would be constitutional issues to address before creating such a structure legislatively. However, note that assessor is not one of the “constitutional offices”.