Real Property and Common Sense

It will probably be a while before we see Onondaga Lake crowded with sail boats and swimming beaches but perhaps the future holds the possibility.

Many of us enjoy walking, running or biking in Onondaga Lake Park. We appreciate being close to the water but have accepted that one does not go into the water. We have gotten used to that. Although there are a hand full of boats at the dock, the surface of the lake seems to be void of activity.

Industry on the west side of the lake dumped pollutants into the water in the 1880’s and continued to for nearly 100 years. As a result, the sediment at the bottom, as well as some upland ground water was heavily contaminated. The successor to one of those industries is taking responsibility for clean up and will start dredging the bottom next year.

The other major contributor has been the disposal of waste water into the lake. Lawsuits against Onondaga County in 1989 forced compliance to the Clean Water Act of 1972 and required the improved treatment of sewage before it entered the lake. Since the improvements were implemented in 1990, the reduction of phosphorus and ammonia has been significant. There has been a restoration of some wildlife species and water clarity has improved. 

The current contributor to pollution in the lake is storm water runoff. Excessive runoff overloads the system and allows untreated waste water to enter the lake. Runoff from tributaries adds additional pollution. The county executive’s “Save the Rain” initiative tries to involve public participation in limiting the amount of rainwater that enters the waste water treatment system. Residents can help by various methods of reducing the rainwater that goes into the storm sewers.  By implementing a number of smaller projects to reduce the strain on the system, the county is addressing the cause rather than accommodating the problem by building a larger system. The county has been rewarded for its efforts by EPA recognition as a top ten green community. As individuals, we each have an opportunity to correct a wrong and contribute to the improvement of a recreational and economic asset. 

Syracuse is positioned advantageously to be a hub of activity, drawing visitors from other areas.  A rejuvenated Onondaga Lake, bustling with activity, on and around the water, would make Syracuse a more attractive destination.  Syracuse is turning the corner in its economic evolution becoming an area of non-polluting industry and technology.  Onondaga Lake can be an asset in securing our new position.

On September 30, 2011 the provision in the 2008 Emergency Stimulus Act that raised loan limits for FHA, Freddie Mac and Fannie Mae will expire. Let it expire.

Before the 2008 Emergency Stimulus Act the limits were 115% of the local area median home price. That is enough. FHA, Freddie Mac and Fannie Mae are GSE’s (government sponsored enterprises). Who backs a government sponsored enterprise? The taxpayer.

Should taxpayers be held responsible for mortgages on properties that are priced 25% above the median in their neighborhood? It is arguably in the public interest to support liquidity in the mortgage market. FHA requirements, as they were, put home buying within range of prospective buyers with adequate income and reasonably good credit. (FHA mortgages require only 3.5% down payment and credit rating requirements are generally less than conventional mortgages.) But is guaranteeing a mortgage on a home priced at 125% of the local median price in the public interest? From two perspectives it is not. It puts too much upward pressure on prices so the average and low middle income borrower could be gradually priced out of the neighborhood. It makes the taxpayer the guarantor of mortgages that could make the homeowner “top heavy”. When a homeowner is “top-heavy”, selling a home for enough to cover the mortgage becomes difficult. It makes the housing market illiquid. This is just the problem that we have in many areas of the country.

If a homebuyer wants to pay more than 115% of the median price it should be their responsibility to put more equity in the property to hedge against future price declines. They should use a non-GSE backed mortgage with higher down payment and credit requirements. The taxpayer should not be put in a position of guaranteeing mortgages on properties that are priced 25% above the median price of the neighborhood.

HR 1754 has been introduced to the House of Representatives to make the higher loan limits of 2008 Emergency Stimulus Act permanent. No to H.R. 1754.