In these days of declining revenues and the California State budget well past the stage of life support, local communities are looking for ways to provide much needed monetary relief to the school systems. A parcel tax seems to be the weapon of choice.

Prop 13 places an unfair burden on property owners

I’m not here to express an opinion on this tax, pro or con. Every property owner will be assessed this fee if it were to pass. Across the board, everyone pays the same. Imagine, fairness in taxation. This is not supposed to happen in California. If only the rest of the taxes were as simple and as fair.

The California Tax System is Broken

Who wouldn’t pay an additional $120 in hopes of providing quality schools and good education. Maybe anyone who has to pay property taxes two times a year and before they write the check they stop to think about what they are receiving for their tax money. If you consider for a moment the two sets of rules we as citizens and taxpayers operate under it has to give you cause for concern. The private sector who cannot arbitrarily raise prices to create revenue shortfalls has to continually redefine itself and create value for the consumer. If not, they find that business declines before they may eventually close the doors. The public sector on the other hand receives annual revenue adjustments from automatic tax increases, no need to worry if consumers receive any additional value for their contribution.

Prop 13, Lucky or Not?

There is no better evidence in the lack of value or disproportionate transfer of payments than in our own property tax system in California. Thanks to Prop 13, the taxed based on seniority, here is the situation we face in California:

I looked at four houses next door to each other and all about the same size and market price. They pay $6500, $4800, $827 and $864 in annual property taxes. All based upon the duration of how long the present owner has owned the property. This is a neighborhood in Pasadena, but it has to be like this all across California.

Maybe the ones who pay $827 and $864 think an additional tax of $120 is no big deal and gladly pay it. While the two paying $6500 and $4800 think they pay more than their fare share and vote no. This is a great example of the inequity that is pervasive in our tax system and needs to be addressed.

We are seeing evidence of home buyers in the last few years who were placed into home loans that charged more expensive rates and fees, but the loan brokers received more money. Now we call them predatory lenders because they profited at consumers expense. Couldn’t we apply the same example to property taxes?

The good news about a parcel tax is that it is put to the voters, you get to decide if it passes or fails. Unlike property taxes which are put to the voters in a different way.

The Pasadena Eco House Project is for sale. This has been in planning for 24 months and has full approval to start building now.  The project includes: lot, plans and permits.

This home, designed to be the first Platinum LEED Certified home in Pasadena, offers many energy saving advantages. It ‘s construction utilizes insulated concrete panels that are far superior to standard wood construction. It is resistant to natural hazards such as earthquake, fire and wind. All systems and materials planned for the home are state-of -the -art and environmentally friendly. Solar panels keep you off the grid. Ductless heating and air-conditioning is efficient. Floor to ceiling Anderson windows offer beautiful views. Attention to detail has been key to making this an exquisite home in style as well as function. This is your opportunity to own a home that is destine to become a Pasadena architectural landmark.

The address is 1614 Pleasant Way, Pasadena, CA 91105. The lot is listed in the MLS #22122779. If you have ever thought about building a custom green home in a wonderful neighborhood … This is your chance to be GREEN before next spring.

On the cities web site, the Pasadena Filming Calendar is updated to provide the latest activity and to give interested onlookers the chance to “just happen upon” the “ACTION”. In one of our recent neighborhoods, film crews set up for several days to shoot Big Fat Liar which starred Paul Giamatti. This was before he went Sideways and decided he wasn’t drinking any more Merlot. How merlot can you go, Paul?

The HBO Series “True Blood” which is a story about Vampires, uses a home in southeast Pasadena on occasion to do some filming. Local Pasadena homes can be used quite frequently for film projects. It can be disruptive and a real pain in the neck (pun intended), but the financial rewards can offset the temporary inconvenience while you relocate to a luxurious local hotel and spa.

Jim Carey decided he would perform his own swan dive off of the Colorado Street Bridge. Jim you were S M O K I N! Although we don’t know what, “You’re a better man than I am, Gunga Din”

The next time you notice catering tents and generator trucks, you will know it’s more than just having the carpets cleaned.

The Door of Hope  is  a facility that relies on donations from churches, private groups and organizations and the general community. I had never heard of them until my daughters 2nd grade class from Clairbourn School had a pocket change drive and helped to raise over $2,000 in donations. The children were then allowed to tour the home first hand to see what their efforts were supporting. I chaperoned the trip along with other parents and was  surprised and moved by what we heard.

The home is able to house up to 8 families. Their purpose is to keep families together and teach them the skills they need to find employment, save for a home and impart parenting knowledge to keep the family strong and responsible.

When a family arrives they are typically in competition with approx 20 other families that have applied for the residence spot. They have to show their willingness to improve their lives. Once they move in, they live in the main house and are given one room for the family. They are expected to share the home with other new families and are responsible for cooking one night of the week and also  keeping the home clean. All meals are shared together in the dining room with each family dining together. After dinner they have counseling sessions and classes to prepare them for employment. Once they prove themselves they are rewarded by moving into one of the private apartments behind the home. Each apartment has a living room, bedroom, kitchenette and bath. Once at this level they are still counseled and are saving for a place of their own. This program is not only educating the parents, but the children as well. The children are enrolled in school and the home has an after school program for them. This gives them a stable foundation that is important for their future life successes.

It is wonderful to know that the “Door of Hope” exists and really works! I will be honest that I was skeptical before our visit. I am used to being asked for handouts at many street corners and parking lots in Pasadena. You could give money to many homeless any day of the week on your way to work or running errands around town. You see the same people in the same areas asking for money everyday. You know your supporting someone day to day or being scammed by some professionals. You can give money to large organizations and know that greed and the sheer weight of the organization eats the majority of what is donated. But with The “Door of Hope” you can donate things as small as toothpaste and toilet paper and know it is needed and appreciated . 

We spoke with current and past families that have been helped by the “Door of Hope”.  Their experience proves there is a great place for people who desire something better for themselves and their children. You know that your donations make an immediate  difference in someone’s life. You can donate items, money or services. They have a wishlist on their website.  Remember… the donations made to this organization are a hand up and not a hand out.

Housing programs available through the City include rental and home ownership. For the purposes of this article we will look at programs available to those wishing to become homeowners. For those people who do meet the requirements, a few caveats also come along. These may or may not change depending upon the program you are applying for:

1. Eligibility – restrictions are imposed on who can and cannot qualify.
2. Owner Occupied – if you are going to be a recipient of the program, you must also live in the unit. Forget the “would be” landlords aspiring to let the property and collect a rental check.
3. Income Limits – due to the generosity and intent of the program, income limits have been placed on the applicants wishing to apply for the aid. These income limits are determined for low to medium income households as determined by a formula using the median income for LA County as determined by the U.S. Department of Housing and Development. Income limits vary by the number of people in a household.
4. Restrictions on Selling – the City may receive a “first right of refusal” to purchase the property or may share in the increased equity, once you decide its time to move on.
5. Increasing Income – rising income may impair your ability for ongoing participation in the program

As with anything, a critical implied component is timing. Timing is important since federal, state and local money is the source of funds. These programs will usually have a predetermined annual budget. In other words, you need to know when the money becomes available and take the necessary steps towards application. Once the money is gone, you will more than likely be waiting until next year.

Down Payment Assistance

Known as the Homeownership Opportunity Program, this option is available as long as the purchase price does not exceed $425,000 and offers down payment assistance in the form of a second trust deed up to $200,000 with a 45 year term. To sweeten the deal, interest and principal for the first 5 years are waived. Plus, the interest on the second trust deed may be as low as 1.5%. A purchaser has to make a minimum of a 3% down payment which can also be a gift and must be a first-time homebuyer. The critical factor is your ability to meet the qualification terms of the first loan. Also participants have to attend a special homebuyer education class.

Pasadena Inclusionary Housing

As you drive through town slowing down at the construction zones, you probably did not realize that some of those units being constructed are reserved for Low to Moderate Income Households as Affordable Housing. Before the City of Pasadena agrees to green light new development, the Developer has agreed to set aside 15% of the available units for this special program. Priority is given to eligible households that live and work in the City of Pasadena. I should also preface this paragraph by saying that other options are available to Developers if they choose not to set aside the required ratio of mandated units. They may offer a payment In-Lieu fee, may build other affordable housing off site, or may convey other land to the City. Each development project is different and may hinge on whether the developer was granted a density bonus as to the choice of action they pursue. Unlike the HOP (above), being a first time buyer is not a prerequisite for the program.

To find out what other programs are available as well as which projects may be participating, I would suggest checking with the City of Pasadena or working with a local Pasadena Real Estate Agent who can help you navigate the process.

Let’s take a closer look at the city of Pasadena.  There is a large inventory of homes available on the market today.  In Pasadena, experts estimate about 10 months worth.  The average selling cycle to sell a home often exceeds 100 days with selling prices  well below asking price sometimes up to or greater than 10%.  In addition, the number of home foreclosures & short sales is greater than in past years.  In all, it seems as though, today’s real estate market is prime to purchase a solid investment residential property in a desirable neighborhood at a reasonable price.

OK, let’s go on this hypothetical journey, you purchase an investment home.  Am I going to get a decent rental income?  Who am I going to rent it to?  Is there a demand for homes to rent?   All of these questions have different variables (i.e. size, location, available amenities in the home) that prohibit an absolute answer to them.  However, according to the MLS, the median monthly rental price in Pasadena for the past year (3/07-3/08), is $ 2200.  With the availability of numerous websites for potential renters, advertising a home to rent is easy, inexpensive and accessible to more people.  With the increase in foreclosures, there is and will be a rise in the number of people/families needing to rent.  Plus, these people will be renting long-term in order to save for a down payment towards a future home. 

So, did we hit the real estate trifecta?  No one knows for sure.  Take a closer look.  Do some research on the internet, meet with your local real estate agent and financial counselor to examine the numbers.  Who knows…in five years, you may be the one boasting of the great real estate investment.