Edinburg "advisory committee" recommends
city tax incentives for buyers of new homes
By DAVID A. DIAZ
Future buyers of new homes in Edinburg might qualify for a break from city property taxes under a plan being promoted by an informal advisory group organized by Mayor Joe Ochoa.
The plan, dubbed the Homebuyers Tax Abatement Incentive, was unveiled during a special work session of the Edinburg City Council, held Tuesday, June 6, in the International Trade and Technology Building at the University of Texas-Pan American.
Cleveland, Ohio, Portland, Oregon and Waco, Texas offer similar tax incentives.
Proponents of the plan, who are part of a group calling itself the "Mayor's Advisory Committee," said the tax break, which would be temporary, would only apply to the value of the home, and not to the value of the lot.
The Mayor's Advisory Committee was organized with the support of Ochoa, and includes representatives from the county government, school district, hospitals, and other key stakeholders in Edinburg.
The plan would not affect any existing city property tax breaks, and it would only apply to city property taxes.
Currently, Edinburg's city property tax rate is 63 cents per $100 assessed property valuation.
The tax abatement proposal recommends that tax abatement be applied only to new, non-occupied homes which must be the primary residence of the homeowner.
It would have to be a single-family residential dwelling or a condominium, and would have to be located within the city limits.
Any new, previously-unoccupied home or condominium would be eligible, regardless of its selling price.
Spark new construction
Johnny Rodríguez, CEO of Austin Personnel Services of Edinburg, served as a spokesperson for the group and for the homebuyer plan.
He gave an example of how such a measure might work.
For a newly-constructed home valued at $100,000, Rodríguez illustrated, the city would not collect any city property tax on that structure in the first year, then collect 20 percent the following year, 40 percent in the third year, 60 percent the fourth year, and 80 percent of the fifth year.
From the sixth year on, the city would collect 100 percent of the assessed city property taxes.
On a home valued at $100,000, the total city property tax savings for the homeowner would be $1,905, he calculated.
"We are here to better the city, to help it grow, and one of the ideas we came up with is the Homebuyers Tax Abatement Incentive," said Rodríguez.
He said the tax abatement plan could help spark the construction of new homes in the three-time All-America City.
"The construction and sales of new homes in Edinburg and in the Rio Grande Valley have slowed in recent months due to rising interest rates on mortgages and an oversupply of new homes that were built over the past few years, as numerous builders entered the Valley housing market," Rodríguez said.
"Currently, Edinburg has an oversupply of vacant homes sitting on the market," Rodríguez continued. "Because of lackluster home sales, national home builders have decided to leave the Valley housing market."
He cited D.R. Horton and KB Homes as examples of major homebuilders that have left or will be leaving the Edinburg and Valley housing market.
Other builders have postponed development of new residential subdivisions and construction of homes, he added.
Home inventory
"Currently, there are 191 new homes in Edinburg alone which are vacant or unsold," he said. "Single-family residential building permits and valuations are down."
In Edinburg, between April 2006 and April 2007, building permits for new homes have dropped 20 percent (223 permits vs 282 permits), he added. "Single-family residential valuations (on new construction) are down $2.6 million compared to last year."
To help "jump-start" the sales of new homes in Edinburg, "the Mayor's Advisory Committee is promoting the development of a tax abatement to buyers of new homes that would encourage people to move into, and buy, new homes in the city," Rodríguez said.
Under the plan, Rodríguez said, the homeowners would benefit by saving money, builders will benefit by selling homes more quickly, and financial institutions would be able to offer more affordable mortgages.
He noted that Cleveland, Ohio currently offers a 15-year, 100 percent property tax abatement on the residential dwelling, but not on the lots, for buyers who purchase new homes.
"Sixty percent of homeowners who received the abatements said they would not have purchased homes in Cleveland if it wasn't for this tax abatement that we are trying to adopt here and present to you," said Rodríguez.
For every dollar in tax abatements provided in Cleveland, $1.50 in new property taxes was generated – it increased the population and the tax base of Cleveland," he reported.
Citizen input applauded
The city council took no action, at the advice of City Attorney Daniel Ríos, since the plan was not specifically mentioned in the city council workshop agenda, as required by the Texas Open Meetings Act.
However, Ríos said the presentation was properly posted and allowable.
The workshop, which lasted about 20 minutes, and included introductory remarks by Ochoa, is currently being broadcast on the Edinburg Cable Network, channel 12 on Time Warner Cable. It is also available on the internet through the city's web site
"If we anticipate that some of these issues will be issues this council will address at future meetings, I would caution the council to refrain from discussing the issues tonight, because such issues were not specifically laid out in the agenda," Ríos said before the presentation. "Certainly, it is perfectly fine to listen and to direct staff to look at issues to present for this council's consideration in the future, but I would caution you to refrain from engaging in any discussions amongst yourselves about the merits of any particular proposal."
Ochoa said he had shared similar sentiments with the group, but emphasized that the advisory council is one way for Edinburg residents to bring their concerns and ideas directly to the city council.
"That's what I have stressed to the individuals that have come forth," the mayor said. "One of my biggest components to this advisory council is to be able to invited as many members of the public to any of these meetings that I am hoping will take place in the future."
Ochoa suggested that the group, which has had several previous meetings, will have other ideas to bring to the council.
"This is nothing set in stone, this is nothing that we are saying has to be done," Ochoa remarked about the homebuyer tax incentive plan. "I think these are great ideas. I think should be implemented, but would require further discussion. With proper timelines, and with the leadership that has stepped up to the plate, it is very commendable."
Way to go Joe. Now that's what leadership is all about. Nothing like the last idiot we had.
Looks like Gilbert Enriquez will be finishing up the police station. The city awarded the contract to him to finish it up. Now you didn't hear a thing from Hot Check Gene Espinoza. Why? Ask him how much the company he's working for well get in sub contracts that Enriquez gives? I'm sure his boss has told him to shut up.
From the rumor mill!
Gene will not run for re election. His excuse? He wants to live out in the country. Yeah right! He sees the writing on the wall. His supporters (Palacios Family) aren't doing to good when it comes to politics now a days.
Aaron Pena is trying to decide to run either as a Republican or Democrat? Note to Aaron don't run your going to lose.
Alma Garza will be helping out her boss Republican Tom Wingate. That means Alma and the Garza family are now Republicans. And you know how we feel about Republicans here in south tx?
Mrs Guerra, the principal over at EHS, is trying to find people to blame for her school doing so poorly on the TAK Test. It's a matter of time before she gets transferred. My suggestions! Transfer her to Brewster. I'm sure she can do something productive over there.
Good Day!
