KeNo's Housing and Economic Portal: Wednesday September 1 Housing and Economic stories

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Las Vegas house values keep going down - (www.lvrj.com) Looking at this year's tax assessments, local property owners won't feel as if they have to stoop over and pick up that loose change on the ground. Better pick it up anyway. The long decline in home prices may lighten the tax load for Las Vegas homeowners, but it's also left 75 percent of them "underwater," or with negative home equity, meaning they owe more than their home is worth, First American CoreLogic valuation service reported. From Mount Charleston to Lake Las Vegas, every area of the valley has been hit hard, housing analyst Dennis Smith of Home Builders Research said. The median resale home price was $126,000 in June, a steep tumble from the peak of $285,000 in 2006, he reported. "I don't think there is one particular area that got hit the hardest," Smith said. "I would suggest it's almost subdivision to subdivision. You could look at the other side of the equation and say, 'Which owners are benefiting the most?' " Many property owners appealed before the state Board of Equalization and had their valuation and tax assessments lowered, even if it wasn't by the full amount they wanted, he said.

Banks to benefit most from White House effort to fight foreclosures - (www.thehill.com) Banks will get the biggest benefit from an Obama administration housing program designed to help unemployed homeowners escape foreclosure. Housing experts expressed concern that banks, not homeowners, will be helped by the White House's $3 billion funding infusion — $2 billion from the Treasury Department and another $1 billion from the Housing and Urban Development Department — going to those states hit hardest by the housing market crash and unemployment. "Giving money to the banks isn't what the government should be doing right now," said Dean Baker, co-founder of the Center for Economic and Policy Research. "I'm not a big fan; it's ill conceived," he said. The basic principle is to help struggling homeowners, but with so many people underwater on their mortgages, the new funding is unlikely to do much good, Baker said. "You need to make sure that someone benefits from the program other than banks," he said. Baker suggested that if the government is going to provide up to $50,000 in loans over the course of two years to those struggling homeowners that the money should be used for any of their needs, not just to pay the mortgage.

The Plutocracy Prevention Act - (www.thenation.com) A century ago this summer, Theodore Roosevelt gave his remarkable "New Nationalism" speech about the dangers of concentrated wealth and corporate power. After witnessing a decade of financial corruption and corporate malfeasance, Roosevelt called on the nation to "effectively control the mighty commercial forces which they have themselves called into being." Some of the tea party's anger at the tax system is justified. We can find common ground with open-minded activists. Part of his vision was a "graduated inheritance tax on big fortunes, properly safeguarded against evasion and increasing rapidly in amount with the size of the estate." Congress instituted an estate tax in 1916 that was in place until last January. For most of the last century, the estate tax was a single tax rate. A person with $5 million was taxed at the same rate as someone with $5 billion. A century later, a group of Senate progressives have heeded Roosevelt's call. On June 24, four US senators introduced the "Responsible Estate Tax Act," which includes a graduated rate structure that taxes billionaires at rates significantly higher than it does multimillionaires. Preliminary estimates indicate the proposed tax would generate $264 billion over the next decade. Led by Senator Bernard Sanders and joined by senators Sheldon Whitehouse, Tom Harkin and Sherrod Brown, the proposed estate tax reform would close loopholes, encourage conservation easements and exclude from the tax the minuscule number of small businesses that would otherwise be subject to the tax. This estate tax rate would range from 45 percent on estates under $10 million to a 65 percent "billionaire surcharge" on estates over $500 million ($1 billion for a couple). The timing is great, because the Senate may deliberate the future of the estate tax in July. Due to Senate inaction last fall, the estate tax expired last January 1. The absence of an estate tax for 2010 will cost an estimated $14.8 billion this year. Already, one Texas oilman, Dan Duncan, became the first billionaire in US history to die without any estate tax in place. Duncan was worth $9 billion and would have paid an estimated $4 billion in estate taxes.

Let's Use Tax Money To Subsidize Manhattan Luxury Condos! Good idea? - (www.bloomberg.com) Whitney Gollinger, marketing chief for a Manhattan condo building with an outdoor movie theater and panoramic city views, is highlighting a different amenity to spur sales: the financial backing of the federal government. The Federal Housing Administration agreed in March to insure mortgages for apartments at the 98-unit Gramercy Park development, known as Tempo. That enables buyers to make a down payment of as little as 3.5 percent in a building where apartments are listed at $820,000 to $3 million. “It’s a government seal of approval,” said Gollinger, a director at the Developments Group of New York-based brokerage Prudential Douglas Elliman Real Estate. “We need as many sales tools as we can have these days, and it’s one more tool.” The FHA, created in 1934 to make homeownership attainable for low- to moderate-income Americans, is now providing a lifeline to new Manhattan luxury condominiums after sales stalled. Buildings featuring pet spas, concierges and rooftop lounges are applying for agency backing to unlock bank financing for purchasers. The FHA guarantees that if a homebuyer defaults on his mortgage, the agency will pay it.