There is a groundswell of Tampa Bay area residents just waiting to buy foreclosed homes in Hernando County. The only thing needed to entice them is a gift card for up to five grand worth of free goodies.
This is the heart of a simplistic and nonsensical economic recovery plan offered to the Hernando County Commission this week by one of their own, Commissioner Jim Adkins, and home-builder/government spending critic Blaise Ingoglia.
They want to dip into the county's reserve account to spend $2.5 million of the public's money on incentives to help liquidate the inventory of foreclosed homes so people like Ingoglia have a better chance to build and sell new homes.
There are no income guidelines to participate. Just buy a foreclosed home in a specific price range and either live in it or use it as your second home. Translation: People wealthy enough to own two homes are welcome to this public subsidy. You can flip the property in 24 months or about the time the real estate market is expected to recover so you can turn a nice profit.
For doing all this, you get a gift card valued at up to $5,000 to blow on home improvements or nonessential items. There is a strong recommendation, but no mandate, that the transactions be with Hernando County merchants. Even if all $2.5 million is used locally in this ill-conceived gimmick, the sales tax generated would total just $162,500. Hardly the kind of return on investment the county should be seeking. And, at best, by our estimates, it would take 625 foreclosed homes off the market. Foreclosures were filed on more than 3,200 homes in Hernando County in 2008.
For a moment, forget the merits of a public handout to people who don't need it. Notice this scheme fails to take into account the inability of would-be home buyers to obtain credit and the county government's own financial bind.
It is simply irresponsible to suggest tapping reserves for $2.5 million over two years at the same time the county is confronting a $3 million shortfall before Oct. 1, and millions of dollars more in the next fiscal year. The cost cutting includes consolidated services and a pending voluntary separation package to reduce the payroll. Past efforts included higher fares for public transit, reduced library services and a failed attempt at new fees for park users.
If Adkins were serious about serving members of the public besides the real estate industry, he would be advocating a county supplement to existing housing programs that assist first-time buyers with modest incomes. Instead, this contrivance prohibits participants who avail themselves to most other home-buying assistance programs, which again demonstrates it is conceived as a giveaway to people not in financial need. Under the Adkins-Ignoglia scenario, people will already have a down payment saved, financing arranged or cash on hand to complete their purchase and snag the $5,000 gift card for first-time buyers. It is an unrealistic formula.
Ignoglia is a public figure, but not a public servant. His self-motives are transparent, regardless of the spin that it will boost housing sales, real estate commissions, contractor work and commerce for local home furnishing outlets. If he were interested in the long-term health of the county, he would move his focus beyond his short-term bottom line and put more emphasis on diversifying the construction and service-based economy and advocating for the quality of life issues that make Hernando an attractive place to buy a home and live.
Adkins, however, is a public servant, elected in November to represent the people of Hernando County. Attaching his name to this cockamamie proposal caters to a special interest that helped exacerbate the economic free fall that exists today. Adkins must remember he represents all of the public, not just those guided by self-interests.