Shaking Off The Rust: Cleveland Workforce Gets Younger And Smarter

[seaskyfan]

Do the lower housing values (and therefore mortgage costs) around Buffalo offset the higher taxes in terms of overall cost of living? Are the pay levels that much lower than other places?

I would imagine someone paying $4,500 in taxes with a $120K mortgage on a $150K house is still feeling a lot less pinched than someone in Seattle paying about the same but with a $400K mortgage on a house assessed at $480K.

[atlantaguy]

I know Brandon, it's sad.

I'm just glad I still have very vivid memories of Cleveland as a little kid. Downtown at Christmas was magical, with 3 huge Department Stores trying to one-up each other with their window displays. It was a wonderful mob scene of people.

[Dr Nevergold]

The relationship with housing cost and taxes is complicated.

Here is how I feel about housing in Buffalo in a nutshell: housing can be cheap. But that $75,000 house you can buy will need massive, major repair and TLC. You really will need to spend almost double the amount you pay for one of the "cheap" homes to get it up to code and get it to modern standards.

Buffalo is a relatively cheap city, but you still will need to spend $125-250k to get a home that is nice, livable, and modern. It isn't safe to buy a home at $75k with lead paint, an electrical system updated in 1950, and a smelly furnace that needs replacement since its so old it burns more dust than it heats.

I lived in Hamburg, a newer suburb, for two years. I lived in North Buffalo for the first several years I lived in the region. Here is an example of an average Buffalo home that is modern and livable, just around the corner from where I lived in Hamburg:

http://www.zillow.com/homedetails/32...54463719_zpid/

For $220,000 you can own a decent home, 1600sq ft. The taxes are $6,000 a year, however.

[atlantaguy]

I met some people from Amherst recently that are moving here. They mentioned taxes, and my jaw dropped when they told me what they pay.

They said they justified it for the schools.

[seaskyfan]

Originally Posted by Dr Nevergold

The relationship with housing cost and taxes is complicated.

Here is how I feel about housing in Buffalo in a nutshell: housing can be cheap. But that $75,000 house you can buy will need massive, major repair and TLC. You really will need to spend almost double the amount you pay for one of the "cheap" homes to get it up to code and get it to modern standards.

Buffalo is a relatively cheap city, but you still will need to spend $125-250k to get a home that is nice, livable, and modern. It isn't safe to buy a home at $75k with lead paint, an electrical system updated in 1950, and a smelly furnace that needs replacement since its so old it burns more dust than it heats.

I lived in Hamburg, a newer suburb, for two years. I lived in North Buffalo for the first several years I lived in the region. Here is an example of an average Buffalo home that is modern and livable, just around the corner from where I lived in Hamburg:

http://www.zillow.com/homedetails/32...54463719_zpid/

For $220,000 you can own a decent home, 1600sq ft. The taxes are $6,000 a year, however.

Thanks for the info. I guess there would be sticker shock if your mortgage payment was around $900 (based on the Zillow number at the link) and you were shelling out $500 a month in taxes.

[atlantaguy]

Originally Posted by seaskyfan

Thanks for the info. I guess there would be sticker shock if your mortgage payment was around $900 (based on the Zillow number at the link) and you were shelling out $500 a month in taxes.

seaskyfan - Just curious, but are people getting priced out of buying? I know the economy is humming, and rentals are booming like everywhere.

I have friends that bought in Lake City & West Seattle 10 years ago that seem to be sitting on goldmines. They could never afford their homes today.

[Dr Nevergold]

No school system can justify the tax rates here. Teachers in NY state do get paid among the best in the nation, and I agree a professional job should get a professional income, but the numbers don't add up.

I think Buffalo could "come back" if they consolidate Buffalo and Erie county services under one government, cut the duplication of all police, fire, school, and infrastructure services and have a metropolitan council that is unified.

Secondly, this region needs an infrastructure rebuild. The highway system around here is the best 1950 can offer, and half the streets need landscaping and repaving. New York State would also suit this region better by abolishing the New York state thruway authority and making I-90 toll free. Its the only highway in the region, and it strangles the local economy since all shipping that passes through here has to pay the toll. Its bad for business and tourism, especially when Niagara Falls is next door. New York taxpayers already fund one of the most expensive gas taxes in the nation. There's enough funding to make a toll free I-90 here through the general gas tax fund, they just need to allocate resources appropriately and ask for federal funding for repaving jobs like other states do as normal matching funds. The fact that I-90 is tolled in upstate makes absolutely no sense. I understand if you're in NYC and the high volume and pressure on local infrastructure needs tolls, but not here. You can't drive 60 miles down the road to Pennsylvania and onto Ohio through the region's vineyards and farm fields without paying over $3.00 one way.

[atlantaguy]

Wow. That's a long list of things that need to happen for Erie County. Sadly, I can't see the suburbs ever agreeing to this (just like everywhere) as far as consolidation...

[seaskyfan]

Originally Posted by atlantaguy

seaskyfan - Just curious, but are people getting priced out of buying? I know the economy is humming, and rentals are booming like everywhere.

For buyers in Seattle the major issue seems to be inventory. Things coming on the market are going really quickly. Due to the relatively low mortgage rates and a lot of folks making a pretty good living there's a lot of money chasing a smaller number of houses in a lot of the neighborhoods within 5 miles or so of Downtown. I live in the Wallingford neighborhood in North Seattle and most houses are selling within a few days for substantially over the asking prices. The weird thing is that prices don't seem that bad because they're still getting back to pre-crash levels so the sale prices aren't all that jaw-dropping. A lot of first-time buyers are going with condos or headed north or south for better deals.

The increases in rents have been jaw-dropping. I keep hearing about new one bedrooms going for over $2K/month and two bedrooms pushing $3K/month on Capitol Hill which is extraordinary for those of us who've lived here a while. Here's a link to the pricing page at a new building Downtown. The studios start at $1350 (the building is right across from the new Amazon HQ).

http://www.via6seattle.com/Apartment...5Bid%5D/48593/

[Dr Nevergold]

Originally Posted by atlantaguy

Wow. That's a long list of things that need to happen for Erie County. Sadly, I can't see the suburbs ever agreeing to this (just like everywhere).

Well, its worth noting that current governor Andrew Cuomo is doing a lot of this already. He passed several laws through the state legislature forcing local governments to consolidate services or risk losing all state matching funds for essential programs relating to education and police funds. His government passed a tax cap that makes it illegal for local governments to increase property or education taxes above inflation without a super majority vote in a referendum. This at least halts some of the massive tax increases this region has seen in the past decade or two. Buffalo Metro has also been designated as part of his zero tax plan - businesses now pay 0% taxes to New York State if they relocate to Buffalo for 10 years. All they will pay are applicable federal taxes or local property tax. New York might be ahead of the rust belt curve in that the state government is actively targeting some of these problems, and they've taken action in the past few years since he became governor.

Buffalo also has tremendous natural resources. Its got beaches and lakefront settings throughout the region, south of downtown the rugged foothills of Appalachia begin and there's ski resorts within minutes of downtown. This region doesn't lack potential, it just needs a jolt to get things started.

[miketoronto]

I am one of the 25 - 34 year olds to have moved to Cleveland

Just at my workplace, we also had three other people in a short time move to Cleveland from other cities in the USA, like Chicago, New York, and Minneapolis.

There is definitely a youthful vibe here.

[M II A II R II K]

Great that Cleveland can take advantage of the latest trend. But still good to never have too many eggs in one basket if the trend doesn't continue.

[Crawford]

Property taxes, like mortgage interest, are deductible on the federal form.

And in NY State there is an additional deduction for property taxes on the state form.

So, long story short, I doubt property taxes are that big a deal in Buffalo suburbs. If they were a big deal, then people wouldn't be voting for the taxes. in any case, where property taxes are "too high" it will be reflected in lower home sales prices, so the consumer is paying the same regardless.

[atlantaguy]

Originally Posted by seaskyfan

For buyers in Seattle the major issue seems to be inventory. Things coming on the market are going really quickly. Due to the relatively low mortgage rates and a lot of folks making a pretty good living there's a lot of money chasing a smaller number of houses in a lot of the neighborhoods within 5 miles or so of Downtown. I live in the Wallingford neighborhood in North Seattle and most houses are selling within a few days for substantially over the asking prices. The weird thing is that prices don't seem that bad because they're still getting back to pre-crash levels so the sale prices aren't all that jaw-dropping. A lot of first-time buyers are going with condos or headed north or south for better deals.

The increases in rents have been jaw-dropping. I keep hearing about new one bedrooms going for over $2K/month and two bedrooms pushing $3K/month on Capitol Hill which is extraordinary for those of us who've lived here a while. Here's a link to the pricing page at a new building Downtown. The studios start at $1350 (the building is right across from the new Amazon HQ).

http://www.via6seattle.com/Apartment...5Bid%5D/48593/

Thanks for the very informative reply!

[themaguffin]

A progressive governor in New York, Andrew Cuomo

Just an aside, while I'm sure that he is good on many issues, I wouldn't call him a progressive and have serious reservations about his clear higher political ambitions.

[Dr Nevergold]

Originally Posted by Crawford

Property taxes, like mortgage interest, are deductible on the federal form.

And in NY State there is an additional deduction for property taxes on the state form.

So, long story short, I doubt property taxes are that big a deal in Buffalo suburbs. If they were a big deal, then people wouldn't be voting for the taxes. in any case, where property taxes are "too high" it will be reflected in lower home sales prices, so the consumer is paying the same regardless.

We've had this discussion before, and its clear you think paying $4,000-6,000-8,000k or more in taxes is somehow normal, or that an average income can absorb it without issue.

A simple tax deduction on interest doesn't pay for a tax bill that high. It doesn't even come close...

Since we've had this discussion before, I'm not going to debate the point. You're entitled to think that ultra high property and education taxes are normal, or that the interest deduction somehow equalizes the amount (doesn't even come close). You can argue that the city proper of Buffalo has lower taxes than its suburbs, it doesn't make up for the ultra high taxes overall in the suburban communities and it makes the area unattractive.

[lio45]

Originally Posted by Dr Nevergold

A $300,000 condo in Toronto might fetch $2,000 in taxes (if that), in Buffalo that condo would literally have several times that.

I think that the way you're making that comparison doesn't make sense, because a $300k Toronto condo and a $300k Buffalo condo aren't the same thing.

For example, if you compare the tax rates on a $1,200,000 Vancouver house versus a $1,200,000 Buffalo house, you might reach the conclusion that property tax is much lower in Vancouver.

On the other hand, I think the figure we should be looking at is the annual property tax for a 1,200 sq. ft. Vancouver bungalow compared to the annual property tax for a 1,200 sq. ft. Buffalo bungalow, because in my experience, the fact that the market is bubbly is generally not reflected in property tax; cities will adjust their tax rates accordingly.

In other words, I would definitely expect property taxes to be higher on a gigantic 7-figure Buffalo mansion than on a very modest 1970s Vancouver bungalow, and I don't think we can compare them as apples-to-apples.

[lio45]

Originally Posted by miketoronto

I am one of the 25 - 34 year olds to have moved to Cleveland

Just at my workplace, we also had three other people in a short time move to Cleveland from other cities in the USA, like Chicago, New York, and Minneapolis.

There is definitely a youthful vibe here.

FYI, your location still says "Toronto"... mikecleveland.

[Austinlee]

Cleveland and Pittsburgh are going to be fine as the next generation takes over. There are massive amounts of legacy companies and arts amenities. As the huge elderly population dies off they are likely to become very vibrant and progressive again. I can already see it happening.

[Crawford]

Originally Posted by Dr Nevergold

We've had this discussion before, and its clear you think paying $4,000-6,000-8,000k or more in taxes is somehow normal, or that an average income can absorb it without issue.

Yes, to me that's a normal property tax burden for a middle class family. If you can't afford 6k in taxes, then you probably can't afford a house. In such situations, if that's too much, better to rent (because any place with lower taxes will have higher home prices anyways).

And keep in mind, you aren't actually paying that amount. You're paying around 60-65% of that amount after taxes (assuming you itemize, which, if you're a homeowner with a mortgage, you will). You're talking $400 a month.