What is Prop NS?
Prop NS is a bond issue that will appear on the April 4, 2017 ballot. The ordinance authorizes $40 million in bonds to be sold over about 6 ½ years, no more than $6 million per year.
What will Prop NS do?
Proposition NS (neighborhood stabilization) would:
- Stabilize and secure residential buildings deemed to be “rehabable.” Stabilization would include tuck-pointing, repairing or replacing the roof, and complete board-up to make them water tight and bring them up to pre-rehab condition. The allowable work is specifically spelled out in the proposed ordinance, and could not be used for HVAC, electrical systems or anything else.
- The stabilized homes would then be put up for auction to the highest bidder. These properties would go back on the tax rolls and become a source of income for the city instead of an expense.
- Stabilized homes could only be sold individually, discouraging big developers.
- No more than $6 million in bonds could be sold in any one year up to $40 million over about six years. The bonds would be paid back with a property tax increase of just $11 per year on a $100,000 home.
Why do we need this?
- Tax payers (you and me) lose millions of dollars in property tax revenue and homeowners lose millions more in property values
- We pay for the excessive police and fire calls; we pay for the city to mow the lawn.
- St. Louis Fire Chief Dennis Jenkerson will tell you that vacant buildings are particularly dangerous for his fire fighters
- There is a long-lasting psychological affect for children to wake up next to and walk past vacant buildings everyday.
- These buildings can be a resource for the city – they can generate revenue
Who will control the money?
- Once approved by voters, the bonds would be sold and the funds would go to the St. Louis Development Corporation, the city’s development arm. The SLDC must draft procedures for use of the bonds― following the dictates of the ordinance― which is then approved by the three-member Board of Estimate and Apportionment.
- The LRA (Land Reutilization Authority), which is overseen by the SLDC, puts the stabilization work out for bid according to city guidelines, and paid for with the bond proceeds.
Big developers will just come in and buy up all the property, right?
- The ordinance specifies that each stabilized home will be auctioned and closed individually, making it more difficult for big developers to buy properties in bulk.
- Big developers will not decide which homes will be stabilized.
Who will decide which properties are stabilized?
- The selection process is not spelled out in the ordinance. Neighbors for a Stable St. Louis is proposing a citizen advisory committee. Neighborhoods, non-profits and others would submit applications which would then be evaluated according to criteria determined by the advisory committee with resident input. The advisory committee would submit a recommendation to the LRA. The process is designed to be transparent at each step in the process.
- Neighbors for a Stable St. Louis has had discussions with the SLDC and LRA and received a positive response to our proposal.
No one wants to buy homes in the areas with a lot of these homes.
- People DO want to buy these homes. Many people are committed to the neighborhoods where generations of their family have grown up. Purchasing homes in such disrepair is a hurdle many potential buyers just can’t overcome. Once a few homes are rehabbed, this will draw more people and businesses to these areas.
- Why can’t the LRA sell these buildings as-is, or give them away for free?
- There are properties that have been in the LRA inventory for decades, many because of their poor condition
How do we know that the money is going where it’s supposed to?
- In 2014 the Board of Aldermen established a Bond Commission (Ordinance No.69757) made up of citizens with engineering, finance and legal backgrounds.
- The Commission reviews how bond funds are spent, including the timeliness, cost-effective ness and quality, and publish an annual report.
- What happens when the bonds are paid off?
- Each bond will be paid off over 20 years. If all $40 million in bonds are sold over 6 ½ years, then it would take 26 ½ years until every bond is paid off. At that point, property taxes would be reduced by the amount of the bond payment. Only the voters can decide to continue the program and sell more bonds.
- The bonds function like a car loan -you get the car up front, but make monthly payments to pay off the loan. Once the loan is paid off, you don’t have payments any more.
Why can’t these buildings just be torn down?
- It costs between $8,000 and $12,000 to demolish a brick home.
- Often, the rubble is left behind and we’re still stuck with a vacant lot that needs to be mowed, attracts crime, and is not on the tax rolls.
- There is a long backlog of structures needing to be torn down because the city simply doesn’t have the money. Each year buildings are prioritized for demolition.
- Prop NS is designed to save rehabbable buildings from further deterioration
- Wouldn’t you rather pay a small amount up front to turn them into tax-generating homes for your neighbors rather than demolish them?
Doesn’t the city have higher priorities?
Only crime is a higher priority than vacant property. Vacancy is a vicious cycle. Lower property values reduce property tax revenue which means less money for schools; poor schools mean more people move out of the city in search of better ones and thus more vacant homes. Vacancy is a fundamental problem that exacerbates nearly every other problem in the city. Addressing it can help reduce crime, widen our tax base and draw more people into the city.
On April 4, VOTE YES for Proposition NS. For more information go to:
www.Neighbors4StableSTL.org, email Neighbors4StableSTL@gmail.com