Uncle Sam wants ideas...

Not surprising that the federal government is in over its head regarding the number of single family homes it owns now due to the foreclosure epidemic over the last few years.  Over its head to the point of asking for help on ideas on how to deal with the problem.

For sale or rent by distressed owner: 248,000 homes. That’s how many residential properties the U.S. government now has in its possession, the result of record numbers of people defaulting on government-backed mortgages. Washington is sitting on nearly a third of the nation’s 800,000 repossessed houses, making the U.S. taxpayer the largest owner of foreclosed properties.

Read the rest of the article.  As I was reading I couldn't help but to think of years of long ago and the land rush events when the federal government opened up restricted land for homesteading.  Now the politics back then -- and the reasoning why lands were 'restricted' is not the point of this post, just simply I had images of people rushing out to land made available.

Homesteading basically equals self sufficiency, and while what that was back over 100 years ago means something different than what it looks like today.  But the federal government wants ideas and I think they should consider applications of the past.  Hear me out for a second.

Today, no matter how complicated things seem to be, solutions basically come down to price -- simply.  According to the article linked above, the taxpayer of America sits on a quarter million homes (I rounded up).  The article also mentions the BILLIONS of dollars already spent (wasted) on the whole fiasco, the tax payer is not getting that money back in one swoop.  However, the feds could put a price per square foot in the form of a lien.

For this exercise I am just coming up with a number for a goal of raising $10 Billion dollars to the federal treasury.  No, that isn't even close to paying off the enormous debts accrued by the same government over the years -- but it is a healthy number.

I do not have any data that is definitive on the average size, in square feet, a home in the fleet of foreclosed homes owned by the American taxpayer is but I found this and simply picked 2,000 as the average (might be more, might be less, it doesn't matter).

So from those estimates and pure guesses I come up with a $20 per square foot figure.  Before we start the modern day land rush though, let me go a bit further.  I want to get the states involved so my idea is to turn over to the states the fleet of foreclosed homes to the state governments for which they are located.  Once that is done the state government may add on additional costs to account for the administration costs and perhaps a bit more for revenue purposes -- whatever the states want to do.

So maybe another $5 per square foot -- so what??  Another lien.  Maybe the states send the responsibility on down to the counties and/or cities... a few more bucks per square foot in liens.

Now start the land rush. 

Around $30 a foot and buyer's head to banks for loans = business.  Many of these foreclosed homes are likely in need of some repair, this also = business.  Also, real estate as an investment becomes a traditional type of investment as it has been during most of my 40 years on this planet again.  Cash flowing rentals out of the box = a good thing.

I also contend that the true bottom of the local real estate markets would finally be reached in the locations where the problems were the most damaging.  Remember not every local market saw huge increases, and subsequent crashes, over the last decade.  Finding the true bottom is just what the doctor has been ordering (by doctor I mean the market).

Now once the buyer buys, he/she gets clear title (unless financing is used to purchase).  This means the new owner is free to reside, rent, or flip the property as he/she sees fit.  However every owner and financial product service provider must know that there won't be any bail outs.  Can't pay your bills??  The American taxpayer won't be bothered.

Lastly for the federal government, sure they have a role going forward.  The laws dealing with fraud and discrimination are still very much needed -- but government has zero role in the market itself.  All the efforts to provide the silly concept of 'affordable housing' basically led to the conditions that made for the boom and bust cycle that has had a crippling effect on the economy at large.

And that concludes my idea (a very simple one at that).  Now, where do I get a covered wagon at??

Exclusive communities get expensive...

The dirty little secret that the NIMBY's either don't realize themselves, or would rather you not know is that a growing community costs the individual less money in taxes for public services.  Reduce the growth rate and watch your individual contributions to public services grow.

The chart on my last blog post shows clearly the direction the local community is headed.

I've documented the efforts of the no-growth folks to make the community more exclusive on this blog for many years.  I intimated that this day of reckoning was coming the whole time.  But, NIMBY's instead argued that folks like me were greedy... yep... their basic tenant was that anyone that supported growth was greedy, nothing more.

Now many of these same folks are up in arms regarding increased costs for public services and possible sales tax increases (which are more like probable sales tax increases... it would be the easy thing to do... and it has been done many times before).

In the Thursday edition of the KDMiner.com there is this article reporting on a conversation held during City Council meeting last week.  Some highlights and comments to follow...

KINGMAN - What was meant to be a brief budget update Tuesday evening quickly evolved into the City Council's first overt move toward raising the citywide sales tax for the upcoming fiscal year.

...

(Financial Services Director Coral) Loyd said that, due to more than $1.5 million in state cuts and falling gas tax returns over the past several years, the city has had to dip into the general fund in order to make up the difference. She warned that continuing to do so would eventually deplete the general fund balance to the point where it could begin to negatively impact the city's bond and credit ratings. She estimated that that would probably happen once the fund drops to somewhere between $5 and 6 million, which could happen in as little as two years at the current rate.

So here is the situation, the state government is broke and won't be sending road improvement money to the folks in Kingman anymore. This means the folks in Kingman will have to pick up that tab, that is if they want maintained streets. Really, who didn't see this coming a mile away??

More...

At that point, Mayor John Salem acknowledged that the city had already cut "to the bone" and that state-shared revenues were unlikely to return anytime soon. With few other realistic options available, Salem proposed raising the city sales tax .15 percent, which would bring the combined city, county and state sales tax to an even 9 percent from the current 8.85 rate.

"This is an ongoing problem, and I propose this to the Council right now - we're not in an emergency situation, but not to address this I think would be irresponsible," Salem said. "This is probably not very politically favorable on my part, but I think it would be more irresponsible if I were to not do anything."

Sucks to be the mayor right now as I know this is not the sort of thing he wants to do (as I doubt anyone elected to this Council would want to do either). But... choices they be a wee bit limited right now. The choice would be to have crappy roads to drive on in the city or to raise a tax to pay for maintenance of the crappy roads.

The mayor is right, something has to be done... but really something should have been done a long time ago. Kicking the can down the road didn't help the community then, and it certainly is not helping now.

More from the article...

Salem was met with immediate opposition from Vice Mayor Robin Gordon and Councilwoman Carole Young, who both agreed that a sales tax increase should be a last resort, and that the city should do everything it can to cut internal costs first.

"I don't think we've done that, and until I feel confident that everything's been done," Gordon said. "We heard a lot of suggestions at (last week's) town hall meeting, some may be viable, some may not, but I don't feel we've had that discussion yet, and until I feel confident that's been done, I would not be in favor of any kind of raise in the sales tax."

Young said she did not want to place an additional burden on Kingman's already hurting business sector. She added that the city has never taken the opportunity to hold its own brainstorming session on how else to raise new revenues, something she said the city should do soon.

I wasn't at the town hall meeting so I don't know what suggestions were made that could save the day, but reading through the comments at the KDMiner.com article sort of leads to clues (liquidate assets and lay off city employees, if you don't care to read the comments). Laying off more people in a local economy on the ropes will suck but likely will be done. Selling off assets in a depressed real estate market will equal a drop in the bucket for long term issues like road maintenance.

The two comments I copied above, though, basically amounts to more can kicking down the road. I'm not trying to be critical of the two ladies at all. They are in a tough position with limited options (raise taxes or fire people).

I am basically a Tea Party kind of person. I believe, like millions of others, that us Americans are taxed enough already. I don't care much for federal programs, or state programs, but I get it and pay my taxes accordingly. I'm a bit softer on local taxes and fees only because if properly administered the effects of my tax dollars are tangible. If I am driving around town on well maintained roads, I probably don't miss the fifteen cents for every $100 dollars I spend locally (if a new tax is implemented to pay for road maintenance).

More...

Councilwoman Janet Watson, however, agreed with Salem, saying that Council would be remiss in its duties if it did not create a permanent, reliable funding source for future street maintenance costs.

"When I think about how important it is that we not let our streets continue to deteriorate year after year and we know that the HURF money is going away and what's gone is not coming back, we have no way to cover that cost," she said. "None of us want to raise taxes, I know you don't. But to be realistic, I agree we would be remiss if we didn't put together some type of plan to say ... 'We can't let our streets just become full of potholes and dirt roads.'"

The same people bitching about a possible tax will be the same people that will bitch about the potholes and dirt roads (and yet for years I, and the people with similar views, are the ones being called greedy... go figure).

Last bit from the article...

While the street department estimates it will take about $1.5 million to bring the street repair schedule back up to date, Walker pondered how much that cost would increase if the city were to continue to neglect the streets for another year or two.

"There's never a good time to raise taxes," (Councilman Keith) Walker said. "But I agree if we don't do something to start replacing that HURF money, what's the financial burden going to be on the city long-term if we let these roads get away from us? It's astronomical how much it's going to cost us."

This is precisely what the NIMBY's either intentionally, or just by ignorance, fail to realize. The anti-growth crowd stated at public meetings and even in the local media that they wanted to put the brakes on growth in Kingman. They did it, and now they will have to pay for the exclusivity they demanded... unfortunately so will everyone else that saw this coming from a mile away.  The city government could be eliminated and costs would still continue to rise for the individual in the community.  Inflation is kicking in right now, those costs only get more onerous as we kick the can down the road.

The solution I've favored, and have been called greedy for, involves attracting more dollars to the community.  If anything, to spread those costs around so that public services don't become the burden they will become. 

Really, look at the chart from the previous post.  Realize that the data that is lagging by a year.  There was only a 0.01% rate of growth in the last report, I bet costs have risen more than that since... meaning that yes you will have to contribute more and the choices of either paying more in taxes or reducing public services aren't really choices.  Both will happen.

The short sighted and closed minded NIMBY's will look to blame everyone and everything else... but the wheels were set in motion a few election cycles ago.  They wanted it, they got it... and now they are shocked that they have to pay for it.

Meanwhile I laugh at their expense.

About that 'exploding' growth here locally...

I could have named this post 'Chart Withdrawal' since it has been a mighty long time since I last posted any sort of chart on this blog (and you all know how much I love posting charts).

Today though, I fulfill that need to share some data in charted format... but it won't involve the current local market real estate market conditions (nope, don't have access to that info any longer).

If you remember (heck I barely do) a couple of times I dug up some Census data to get a look at changes in the local population.  My first post including this data was in 2008 and the Census info showed the first drop in the increase of population percentage for the first time last decade between the years 2006 and 2007 (the Census reports lag a year behind and are based on the estimated population count on July 1 of the particular year).  I then made it a point to drum up the same data the following year in 2009, and it again showed a continued slide of population growth.

The report that became available last year I didn't follow up on until today.  As it turns out there is a front page article found at the KDMiner.com site yesterday that sort of highlights the folks that wanted to put a stop to growth in Kingman.  The group went so far as to start a political action committee (yeah... lobbyists) to show just how serious they were in defeating growth in the Kingman area.  Well when you see the chart below, you will see just how effective they and their efforts were.

Okay, chart time...

According to the data, Kingman added an estimated two people to the population between 2008 and 2009.  I've linked all the resources I used to make the chart.  Please take a look for yourself, don't take my word for it.

Keep in mind that it was right around 2006 when anti growth groups began their use of scare tactics to make their case to the folks in Kingman.  It was clear that they wanted to inhibit growth and judging by the data they had an impact.

So it is clear from recent posts of mine that; one, there isn't a water resource shortage at present or even in the near future... and two, Kingman is NOT growing at a pace where it will become a large city in any of our lifetimes. 

So I guess the good news in all of this could be that the traffic problems on Stockton Hill Road will simply take care of themselves... in a few more years.  So we have that going for us.

Who needs math when you have scare tactics??

Share some comments here in a bit, but first want to share some highlights from this article in the KDMiner.com last Friday...

"The vast majority of people don't understand where their water comes from and it's not a problem or an issue until the water stops," Tom Whitmer said during Tuesday evening's Mohave County Republican Forum meeting.

Whitmer, the Arizona Water Resource Department Regional water planner, covered a variety of water-related issues in the talk.

...

Area aquifers

Some of the results of the study show that the Hualapai Valley aquifer which supplies some of Kingman's water has about 3.8 million to 10.1 million acre-feet of water and recharges at a rate of 2,000 to 3,000 acre-feet a year, Whitmer said. The Sacramento Valley aquifer, which serves both Golden Valley and Kingman, has about 3.6 million to 9.5 million acre-feet of water and recharges at a rate of about 1,000 to 4,000 acre-feet per year. The Detrital aquifer, which serves White Hills and parts of Dolan Springs, has about 1.5 to 3.9 million acre-feet of water and recharges at a rate of about 1,000 acre-feet a year, he said.

Recharge rates are affected by elevation, temperature and rainfall, Whitmer said. The problem comes when people withdraw more water from an aquifer than what is being recharged into it.

In at least two of Mohave County's aquifers, depletion could be a problem, he said. The Detrital aquifer is in the best shape, with less than 300 acre-feet a year withdrawn.

The Sacramento Aquifer is bordering on unsafe yield, he said. Approximately, 3,700 acre-feet of water is withdrawn from the aquifer a year. With a recharge rate of only 1,000 to 4,000 acre-feet a year and the current drought, the area could be taking out more water than is going in.

The Hualapai Valley Aquifer is in the most danger, he said. Approximately, 9,050 acre-feet are taken out of the aquifer every year. The recharge rate of 2,000 to 3,000 acre-feet a year can't keep up, Whitmer said.

Be sure to read the whole thing, I copied from the latter part of the article mostly.  Full disclosure, the only information I have about this meeting where this gentleman shared information comes from the article I linked above.  I'm certain that plenty more interesting bits of information was available... at least I'd hope so (it is not an in depth sit down and interview type of article).

As readers may know this 'water' issue we are having in the Kingman area becomes a topic of great conversation from time to time.

Time to take a closer look at the information shared in the KDMiner.com article.

In at least two of Mohave County's aquifers, depletion could be a problem, he said.

Could be a problem?? To be fair I'd like to know if something more specific was said. Size of the problem... how soon the problem... that sort of thing.

With a recharge rate of only 1,000 to 4,000 acre-feet a year and the current drought, the area could be taking out more water than is going in.

Again with the 'could be' stuff. I should have been at the meeting... long drive, but maybe I would have had these questions answered.

The other thing I'd want to know...

The Sacramento Valley aquifer, which serves both Golden Valley and Kingman, has about 3.6 million to 9.5 million acre-feet of water

Does that mean, on the low side, that there is 3.6 million acre feet of water that can be used??

These are answers I loved to know more about, even if it means adjusting my views on my perception of the 'water problem' we are supposed to be having.

Coming up on two years ago I wrote this blog post and I ask that you give it a read if you have the time. Covers similar examples of putting math to the data that is known, just like I am going to do with the information shared in the KDMiner.com article.

More disclosure, all data collected for the math equations that follow come from either linked media articles or linked government documents from Arizona web sites.

We will solve for the following...

the results of the study show that the Hualapai Valley aquifer which supplies some of Kingman's water has about 3.8 million to 10.1 million acre-feet of water and recharges at a rate of 2,000 to 3,000 acre-feet a year

...

Approximately, 9,050 acre-feet are taken out of the aquifer every year.

I'm up for a challenge... so we'll solve for how long it would take to use up ONLY HALF the water resources in the Hualapai Valley aquifer. Not only that, we will assume that it will never, ever, rain again in Mohave County -- so no recharge.

Still not good enough. So we will double the amount of water used annually, measured in acre feet, and round up to 20,000.

This is going to be simple math -- but double check my work anyway.

Half of the low estimate of 3.8 million acre feet equals 1.9 million acre feet.

Add Zero for recharge

Rate of water used equals 20,000 acre feet annually.

1.9 million acre fee divided by 20,000 acre feet annually equals... 95 years.

95 years to use HALF. Should I say it?? Fine, much can happen in 95 years. Leaving me to ask the question... who are we to decide on a non problem now, for what might not even be a problem then??

Unless the questions I shared earlier are answered, and the answers allows me to be swayed by facts, the math says we don't have a water resource problem. The only potential problem I see is a water resource delivery infrastructure problem... the kind that tax payers pony up for when no one else wants to invest in the area. As a tax payer I know that future costs for such improvements will be needed, even if the area is not growing. Defraying the costs with an additional amount of people equal to the current population would certainly make those high cost types of improvements easier to afford.

And this is why it is a fundamental growth issue. If the community was really thinking about helping our future generations of Kingmanite's (not even born yet) then we should be working hard and competing for local investment and development. IF the planets lined up just right and everything fell into place (which it certainly will not) it is possible that the folks here today wouldn't have to pay for any of it for years. Accounts could be set up to save money for future infrastructure needs perhaps?? (yeah, I'm being waaaayyyy too optimistic there)

I posted on the KDMiner.com site yesterday this tidbit...

Now you watch... the folks that will respond to me won't attack the math or the facts.

That was validated quickly. Too bad because it might actually be an interesting discussion and the sharing of the facts would be something I'd look forward to.

Link to more MOCO posts including public data regarding local water supply.

Maybe we can make it rain...

Yeah, I didn't get this article from a science publication or Popular Mechanics type of thing, but this is what folks are working on that have far less water resources than the few fine folks in the Mohave County area (mostly near Kingman) have.  I also want to state that the technology discussed in the article does not necessarily mean the long term solution for the water resource needs of the few fine folks in Mohave County... but I am entirely more confident that in 30 years or so solutions will begin to appear.

But even if real solutions don't actually appear for the few fine folks in Mohave County in 30 years... there will still be plenty of water resources for those few fine folks.

Time is on our side.

Important water related blog posts...

I've decided to round up some posts I've written over the years, specifically regarding the alleged water supply issues locally, and present them here on this blog post.  Links to this collection will be available on the sidebar for easy access.  If you ever need to look at readily available and public data, it will be here.  All of the posts will include the links to the data I used for my writing.

I do not have the time to blog as often as I used to so I feel this is a fair and easy way to keep the information readily available for the readers review.

List of blog posts below...

Who Needs Math When You Have Scare Tactics -- February 13, 2011

So How Bad Is the Drought Here?? -- July 13, 2010

Game Changer?? -- August 15, 2009

Fun With Data -- August 31, 2009

What Industry Can Do For Water -- July 31, 2009

13 Million Acre Feet of Water -- July 3, 2009

What Do We Know?? -- August 7, 2007