City Built Spec Homes with Your Tax Dollars

Why does the City of Flagstaff continue to build spec homes when we need tens of millions of dollars for our basic infrastructure needs?

Why is the City continuing to build spec homes when over 150 homes are for sale under $200,000 in the Flagstaff market?

Why would the City continue this program when the two tax payer funded spec homes it has for sale have been on the market for over 110 days?

Why would anyone want to buy a home for nearly $170,000 on leased land (land you don’t own) when you can buy so many others for less and own the land?

I asked these questions at a recent budget retreat and last Tuesday I presented data to the City Council that clearly shows the City should end this program. Here is a link to the report.

February 12, 2013
Re: City Built Spec Homes

At the January 22 City Council Budget Retreat, I posed the question, “Why does the City continue to build spec homes when 116 homes are for sale under $200,000?” This number has come into question in a recent letter from Bothhands stating that only 30 homes are available according to their process of elimination.

I appreciate and respect Bothhands’ service to our community and I hope my comments were not misunderstood as questioning this organization’s value to our City but I respectfully disagree with their assessment. Rather than just having myself provide an assessment and data as to the current market conditions, I asked several other Realtors and investors to weigh in and give their professional assessment. As you will see from the data and letters from local Realtors, the experts and data paint a clear picture showing that over 150 homes are currently and consistently on the market.

One Real Estate Broker stated, “It appears to me that, as a community, the downturn has benefited the lower range buyers in that there is a larger amount of homes available below $200,000 than in years past.”

Another comment with regard to the number of units available under $200,000, “We have consistently been having around 150 in this range.”

As for an assessment of the Izabel Homes Project, one response was, “The other thing they need to take into consideration is the ones on Izabel that they built have been on the market now for over 104 days and have not sold. It is because they are too expensive, they took the land value out of the equation and they are still $166,900”. He goes on to state, “Very few people want to own a home where they don’t own the land. I sold 2 homes in the last 90 days that were in this criteria, one 3 bd, 2 bath in Lower Greenlaw on a double lot for $139,050, and one 4 bd, 2 bath in Shadow Mountain for $162,000. Both cheaper, bigger and include the land than the ones on Izabel.”

And another assessment, “The two homes that Bothhands have on the market are on leased land and therefore are very difficult to obtain financing for a given buyer. With the large number of “fee Simple” homes available these homes are not moving as they have been on the market for over 105 days.”

In response to the letters comments about “as is” and “cash only” deals and homes in general needing repairs and not qualifying for a loan another broker stated, ” When she speaks of homes that need work or cannot be financed there are those who are now looking at owner carry-back…and we do have financing products in place now to do repairs.”

Clearly not all of the homes currently listed will meet everyone’s needs but many will. Some may not be able to acquire financing due to condition. Some may be pending. The data available though and the assessment of the professionals clearly shows a larger than usual number of homes available under $200,000 and warrants further discussion on the viability of this program.

We need to ask ourselves, with all the needs we have in Flagstaff, is continuing to build spec homes with City tax dollars the highest and best use of these funds? Perhaps investing these funds to help with Flagstaff’s homeless shelter or other needs for the most vulnerable in our Community would be a more beneficial investment.


Jeff Oravits

2 thoughts on “City Built Spec Homes with Your Tax Dollars

  1. I think I know why the city gets in the business of building homes and many other similar projects. I would be willing to bet that there is at least one staff member that gets paid to look at all the grants available at the federal government and bring them up to the attention of the city council. I wouldn’t even be surprised if staff just applies for these grants without the council’s approval for each one.

    The problem with all these spending politicians is that they never stop to think about the consequences of these grants. They also score a lot of points with staff by keeping them employed with these grants and even adding to the payroll.

    Look into it. I hope you will tell me I am wrong.

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