Mayoral candidate Jeffrey Kerekes urged city government employees to buy homes in New Haven — and promised to have a 50 percent tax break waiting for them.
Kerekes made that pitch Wednesday as he unveiled a proposal called “Come Back Home.”
The proposal would offer 50 percent property tax breaks for up to five years for city workers who currently live outside town.
That’s most city workers. According to figures released by City Hall last October, 63.48 percent of government workers were living out of town.
Kerekes noted that the numbers are higher for teachers and cops (nearly 80 percent) and school brass and firefighters (close to 70 percent).
“Want real community policing? Let’s have cops live here in New Haven, be our neighbors. Know us as neighbors, not as others,” Kerekes, who’s seeking the Democratic mayoral nomination, said at a City Hall press conference. “Want real education reform? Let’s have the teachers send their own kids here to the schools and teach their neighbors’ kids.”
Kerekes would cap his program at $1 million a year and have it run for five years. Up to 300 new homeowners would qualify on a first-come, first-served basis. They would qualify for the 50 percent break on the first $225,000 in value on their homes. (That’s the median home value in New Haven.) That means they could obtain up to approximately $3,250 a year, or $16,250 over the five years. They would have to be full-time city employees and live in the houses they buy. (If people’s tax bills are lower than the median, the percentage covered could go as high 100 percent.)
Click here to read details of the proposal and Kerekes’ press conference remarks. Click on the play arrow at the top of the story to watch him answer questions about it.
The city in the past sought to impose residency requirements, only to find it blocked by law. (Top mayoral appointees do need to live in the city.) Kerekes said he’d rather address the “underlying” reasons people move here rather than try to force them to.
“After 18 years under [Mayor John] DeStefano, the city suffers from struggling and failing schools, limited services, high crime rates, higher poverty rates, and a higher unemployment than surrounding communities,” he said. “It’s really hard to blame our employees for choosing to live outside of New Haven 70 – 80 percent of the time.”
Kerekes was asked what he’d tell a New Haven homeowner who commutes to a job teaching in a suburban school — and would see his taxes subsidize New Haven schoolteachers under this plan.
“‘Come teach here in New Haven. We need people like you,’” Kerekes said he’d tell the teacher.
Also, he said, he would find $1 million in cuts rather than raise anybody’s taxes to pay for the new program. He also vowed to find more cuts to lower all homeowners’ taxes. The city would hire no new staff to administer the program, he said.
The candidate called it a “fair point” that existing homeowners — including city workers — might feel resentful that money would go toward lowering taxes of new homeowners in their ranks. Because of the city’s tight finances, he said, “At this point we can’t roll this out for people already living here and making the right choice. We need to spend every dollar like a precious resource” and find its “highest and best use.”
Yale University pioneered a program to lure employees to buy homes in town; 974 workers have bought New Haven homes since the program’s 1994 launch, according to Michael Morand, the university’s director of state communications. Yale has spent move than $20 million on the program, which aims at stabilizing neighborhoods. The employees get $5,000 up front plus $2,500 a year for 10 years if they continue to own and occupy their homes. In the third year, Yale began limiting the program to poorer neighborhoods.
All groups of employees participate, Morand said. The program has tended to attract more first-time homebuyers or people moving to the region, rather than existing employees who already own homes in New Haven’s suburbs.
Yale-New Haven Hospital, the Hospital of St. Raphael, and the Mary Wade Home have since launched their own employee homebuyer programs. At St. Raphael’s, which offers $5,000 loans that are forgiven (i.e., become grants) after five years, 26 employees have bought homes, 23 of them in the surrounding neighborhood, according to hospital spokeswoman Liese Klein. Seventy Yale-New Haven employees have bought New Haven homes since 2006 with up to $10,000 in forgivable loans under that hospital’s program. They get extra $200 monthly mortgage stipends for two years when they buy in the Hill, West River, Dwight or City Point areas.
Realtor Barbara Pearce cited a difference between those private programs and a proposed city homebuyer program: “The taxpayers aren’t footing the bill.” She questioned whether it makes sense to try such a city program in tough economic times. She predicted that “you will get people who would have [bought homes] anyway. You’re going to give them something you didn’t need to give them.”
State governments in Maryland and Wyoming offer versions of such employee homebuyer programs, as does Chicago, Columbia, S.C., and Kentucky’s Lexington-Fayette County. Click here for information on those efforts.
Another New Haven Democratic mayoral contender, Clifton Graves, called Kerekes’ proposal “worth studying. Any initiatives that can encourage our employees to live in the city who actually work in the city is admirable.”
Mayor DeStefano’s campaign manager, on the other hand, criticized the proposal.
“A million dollar-per-year tax giveaway to 300 people is probably not the best way to use city resources,” said the manager, Danny Kedem. “When everyone is feeling the recession, we need to focus our money on educating our kids and fighting violence in the city. This plan especially penalizes renters who have decided to live in New Haven. The mayor is committed to growing our tax base. We have a higher percentage population growth rate than any city in New England. There is more commercial and private investment going on in New Haven than any other place in Connecticut.”
I think that this, or a proposal in this vein is worth considering for our city.
Perhaps someone (@urbandata?) could give us some data-driven analysis on this proposal, to see if the benefits of having 300 middle income earners and their families come to the city would outweigh the $3000/year subsidy.
As for renters, I don't think this would penalize them, since renters also are not burdened by the very high costs of homeownership.
In fact, a rental program might even prove to be more popular than a homebuyers program. Maybe it could be something like a free bus pass and free bike for people who choose to relocate and rent.