Raise your hand if your surprised that one of the big dogs in Lincoln's housing industry thinks Mayor Beutler's cash handouts for new house purchases are a good idea. Heartland Homes' Duane Hartman thinks that if the stimulus payments were at least $3,000, and if 200 people used those payments to buy a new house, the city would see a $1.4 million payday, or $7,000 per person. I don't know where he got his $1.4 million figure, but let's just go with it for now.
First, let me say that I agree with Mr. Hartman that Beutler's $1,000 payments are much too low to do any good. I don't know if $3,000 is the magic number, but it's closer.
Beyond that, is it realistic to think that 200 extra people can be persuaded to buy a new house because of a single $3,000 payment? If a person would not purchase a new house without the payment, then sure, that's a nice chunk of new cash for the city, and the one-time grant makes economic sense. On the other hand, if a payment goes to somebody who would have purchased a home anyway, then all the taxpayers are doing is subsidizing a larger down payment -- with zero return to taxpayers -- or perhaps the purchase of a new bedroom set (probably from Ernie's or Nebraska Furniture Mart) -- with a small return to taxpayers.
I wonder how you differentiate between those people who need the cash to buy a house, and those who don't? We need to tell the groups apart in order to determine the success of the stimulus, but should we distinguish the groups in order to tell who gets the cash and who doesn't?
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I think the key word in the story is:
“by his estimates the city EVENTUALLY would reap $1.4 million in return.”
Eventually can be a long time.
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