Noem Staffer Gets Million-Dollar Mansion

Expect a stoic silence from the Noem camp on this one...

Once upon a time, Senator Tom Daschle caught all sorts of guff from folks who wanted to beat him for having a two-million-dollar house (oops, sorry: mansion) in D.C. (or was it $3 million?). Nice houses in Washington, D.C., just don't reflect South Dakota values, do they?

With that in mind, let us turn to the McLean, Virginia, real estate transfers for October. Of 19 home sales recorded at the Fairfax County property tax office, only three were for less than $500K, all condos. Six homes went for over a million dollars. The bargain in that batch: 6134 Ramshorn Drive. Four bedrooms, three and a half baths, 3167 square feet, quarter-acre lot, sold July 30 this year for $1.02 million.

6134 Ramshorn Drive, McLean, Virginia

Whew! I've got four times the lot, but this swanky McLean house has 2.5 times the space and 10 times the mortgage of my humble South Dakota abode.

McLean is a nice neighborhood. Median family income is over $180K; poverty rate is 1.9%. Compare that to Castlewood, South Dakota, where median family income is about $37K and poverty is 7.1%.

Castlewood? What the—oh! I almost forgot to tell you who bought this piece of the American Dream. Please congratulate new homeowners Carine and Jordan Stoick.

Stoick... where have I heard...

Oh! Jordan Stoick! Mobridge boy made good! Successful Washington P.R. dude! And Kristi Noem's new chief of staff:

As I prepare to go to work in Congress, I’m focused on putting together a quality team of individuals that will help me serve South Dakota well. Jordan understands the issues important to our state, and his background and experience makes him a great person to help ensure we hit the ground running on behalf of all South Dakotans [emphasis mine; Representative-Elect Kristi Noem, press release, 2010.12.03].

Catch that? Stoick lives in a million-dollar house, worth seven times more than the median house in Sioux Falls. He lives in a swanky, exclusive D.C. neighborhood. And Kristi Noem thinks he "understands the issues important to our state." But having a big, expensive house doesn't have anything to do with one's ability to understand and fight for South Dakota, does it?

Oh, but I suppose there's a world of difference between Tom Dsachle and Jordan Stoick. Daschle was the elected Senator, the decision-maker, the man directly accountable to us South Dakotans in our $100K sod shanties. Jordan Stoick is just a staffer... the chief of staff, the man behind the scenes, the man who has Kristi's ear every day on every issue, telling her how to be a Congresswoman.

Million-dollar mansion. There's one more meme we won't hear in any future GOP attack ads. Thanks, Kristi!

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p.s.: Boy, I hope Stoick didn't have to sell the boat to swing the payments.

pp.s.: Is Kristi's house that big place by the Racota Valley Ranch sign on Highway 81? How much is her house worth?

Rich More Likely to Walk Away from Mortgages

Ah, the rich. Paragons of capitalist virtue. Models of personal responsibility.

And mortgage deadbeats:

[The New York] Times analyzed data from CoreLogic. That's a firm that analyzes real estate trends. The data shows that more than one in seven homeowners with loans over a million dollars has missed at least three payments in a row. They're seriously delinquent. Only about one in 12 homeowners who owe less than a million dollars is seriously delinquent. That's basically the rest of us [Stacy Vanek-Smith, "Rich More Likely to Walk Away from Homes," Marketplace Morning Report, 2010.07.09].

See the NYT article Vanek-Smith cites for these valuable quotes:

“The rich are different: they are more ruthless,” said Sam Khater, CoreLogic’s senior economist.

...the rich do not seem to have concerns about the civic good uppermost in their mind, especially when it comes to investment and second homes [David Streitfeld, "Biggest Defaulters on Mortgages Are the Rich," New York Times, 2010.07.08].

And I'm supposed to trust the rich with more tax breaks? I don't think so....

Habitat for Humanity Completes Another Madison Home, Thanks Volunteers

The East Central South Dakota chapter of Habitat for Humanity just finished its 2009 house in Madison. Happy owners Nicole and Jacob Williams officially closed on the house yesterday. They and their daughter McKenna are moving their stuff into their new home on the north side of town just in time for Christmas. The Williams family came to the Habitat volunteer thank-you dinner to express their thanks in person:



The Habitat chapter took time to extend thanks to a lot of people, including 2009 Supporter of the Year Shawn Miller of Madison. He's busted his chops for Habitat, putting in hundreds of hours on two houses and serving on the board (some might argue that board meetings are more taxing than shingling).

Also offering thanks to the volunteers were the DSU Singers, Barb Hegg's intrepid student singers, who took time off from studying for finals to come perform some a cappella Christmas music, including a lively little PDQ Bach holiday arrangement.

If you missed the dinner, you can check out some more pix here. And you can consider yourself invited to next year's thank-you dinner: all you have to do is donate... and warm up your hammers for the 2010 Habitat house!

Wind Farms: No Effect on Home Sale Prices

A new Department of Energy study from the Lawrence Berkeley National Laboratory finds that having a wind farm in the neighborhood doesn't appear to "have any consistent, measurable, and statistically significant effect on home sales prices." Researchers Ben Hoen, Ryan Wiser, Peter Cappers, Mark Thayer, and Gautam Sethi analyzed 7459 home sales in 24 communities around 10 wind farms in 9 states. They find that, while wind developers and neighbors alike have expressed concern that wind turbines could depress property values by busting up the view and creating nuisances like noise and flickering shadows, the numbers don't reveal any consistent pattern of lower sale prices for homes closer to or with prominent views of wind farms.

Now if you Google this study, you can find a stern critique of Hoen et al.'s preliminary work on the Industrial Wind Action website. It is important to note that IWA based its criticism on preliminary conclusions the authors circulated in 2007. IWA posted this criticism of Hoen et al.'s draft work in September, prior to publication of the final study. The authors include IWA's Lisa Linowes in their acknowledgments at the beginning of the published study, which suggests they did indeed take into consideration IWA's complaints about methodology in drafting their final report.

Interestingly, you can also find this newsblip from CBS affiliate KOSA in West Texas, in which reporter Greg Sherman appears to get the story flat wrong. I've e-mailed him to ask if he is citing a different Department of Energy study (why is it so hard for professional reporters to figure out how to cite sources and provide hyperlinks?). Still no reply... and no correction.

As the authors themselves acknowledge, these results doesn't change the fact that some folks don't like windmills, and that some folks may refuse to bid as high on a house near a windmill. But the science says that overall, you can't argue that a wind farm will drive down your property values.

Read more:

• Summaries in the New York Times, USA Today, and Business Green.
• The spin doctors at Investor's Business Daily cite "critics" who think "common sense" trumps actual evidence. So does columnist Chris Savula, who says we should ignore the DoE study and believe what we want. Denialism, anyone?

Lake County Water Data Shows Need for Environmental Action

Dakota Water Watch has issued a report on this year's water monitoring projects around eastern South Dakota. For Lake County lakes, the news mixed:

1. Lakes Madison and Brant showed higher than average water clarity, as measured by Secchi disk readings. Lake Herman was a little murkier than the average for all bodies of water monitored. Round Lake was really murky in the summer, but cleared up fast come September and October.
2. Brant Lake had the lowest E. coli readings in the county. Lake Madison had higher but still not bad bacteria counts. Lake Herman's bacteria counts were higher yet, including one spike in June to 232 colony-forming units per 100 mL, the highest reading found during the entire 2009 monitoring project. 232 cfu/100mL is still below the EPA standard (and newly adopted South Dakota standard) of 235 cfu/mL as the maximum single sample level for immersion recreation waters... but it's awfully close.

One way to read this data: Folks on Lake Madison continue to owe Lake Herman a big thank-you for filtering out the crap and supporting their McMansion property values (top current asking price: $870K on Woodland Drive). Of course, I'd still rather live on the rich folks' settling pond than the rich folks' jet ski range.

The non-class-warfare way to read this data: we need to take action to improve water quality on Lake Herman. While my neighbor Larry Dirks continues to fantasize about building a giant central sewer system with someone else's tax dollars, I would suggest some practical action we can take locally, through combined action of the Lake Herman Sanitary District and Lake County:

1. Begin inspection of all on-site septic systems. There are some folks on Lake Herman and around the county who may have bought property and don't even know where their septic tanks and drainfields are, let alone whether they are in working order. Whether we require inspection and cleaning according to some timetable or pass a transfer inspection requirement like what Iowa just enacted this summer, we should inventory and monitor the onsite systems around the county.
2. Enforce zoning regulations. I've heard some folks grumble about houses being built on land around the Madison Country Club that doesn't have the right soil for an effective drainfield. The county and the state DENR have some pretty clear rules about soil quality and other requirements for installing onsite wastewater systems. If a lot doesn't meet those rules, the county needs to get serious about saying to developers they either can't build there or they need to make improvements.
3. Establish more buffer zones: the south side of Lake Herman has cattle pasture right at the water's edge. Many of our tributaries have cultivation very close to the watercourse. Lake County should seek funds to support its own CRP-style program to expand the riparian buffers in these areas to absorb more nutrients before they reach the lake.
   
4. Continue monitoring. We can't make good policy without good data. The East Dakota Water Development District and Interlakes Water Quality Committee have provided a valuable service by starting the water monitoring project that has gathered this data about our lakes for three years now. Lake County's soon-to-be-formed water quality committee should recommend continuing this project so we can base our local water policies on science, not wishes and guesses.

Big Houses, Big Green Problem

Home construction pumps a lot of money into the economy. But do we want to return to economic growth based on the conspicuous consumption of big houses? Episcogranny goes on a holiday home tour and finds one monster house troubling:

Today, though, there was one home that almost troubled me, a three year old home custom built for a fairly young family. The home was gorgeous, don't get me wrong, but it was so large it seemed, well, gratuitous. Perhaps 5000 square feet, probably larger, it had a complete outdoor kitchen/entertaining area, tennis court and pool also. After we left, one of my friends (a physician's wife) asked what I had been wondering--"What do people do to make enough money to afford that?" Not only the house, but to fund the lifestyle that goes with it; very nice furniture and lots of it, help to clean it all, an expectation to entertain, utilities, etc ["Can a House Be Too Big?" Episcogranny, 2009.11.08].

Don't let that thinking get into too many consumers' heads. The last thing Uncle Sam and a whole lot of home-builders want is for more people to decide that they can get by with 1233 square feet, or that they would rather live in an old neighborhood close to downtown instead of snapping their own patch of new urban sprawl. Thinking small and getting along with the houses we have could save us all a lot of time and money... but it would also mean a flat economy for years to come.

But America loves big houses, and so does the tax code. Alas, the new extension of the $8000 home buyers credit pushes Americans ever further toward lifestyles with a bigger carbon footprint:

But the real problem with the credit is that it continues the long-standing federal push toward far-flung McMansions and away from dense, apartment living. In the 1950s, the Interstate Highway System encouraged Americans to flee older urban areas. Nathaniel Baum-Snow of Brown University found that each “new highway passing through a central city reduces its population by about 18 percent.’’ The home mortgage interest deduction further encouraged suburbanization, because rental units are disproportionately in cities while owner-occupied homes are disproportionately distant from city centers.

This pro-suburb, pro-big home policy push helps keep America’s households consuming plenty of energy, both inside the home and in the car. On average, as density doubles, household gasoline consumption falls by about 110 gallons per year. When a household moves from living 2 miles away from a city center to 10 miles away, gasoline consumption increases by more than 100 gallons annually. Smart environmentalism should push against tax policies that encourage more suburban sprawl [Edward L. Glaeser, professor of economics, Harvard University, "With Tax Break, a Big Carbon Footprint," Boston Globe, 2009.11.05].

Funny: why don't I hear Republicans complaining about the home buyers tax credit as social engineering? Of course, some economists argue that the tax credit isn't really to blame, that most of the folks buying houses would still be buying (and buying big) even without the tax credit. The root problem is our own urge to consume. I like to think that part of the cause of this recession, or at least its persistence, is folks realizing they just don't need to commit themselves to big houses, big cars, and big energy consumption. GDP growth and Wall Street be darned, I hope that realization sticks.

By the way, the home buyers tax credit is another bailout that Senator John Thune isn't inclined to stop: the Senate passed this extension 98–0.

Lake County to Form Water Quality Board: Will It Have Teeth?

The Lake County Commission held a special meeting last night at Madison's 4-H grounds to discuss the formation of a new water quality board. About three dozen area residents attended and contributed their thoughts on what such a board should try to achieve.

Commissioner Scott Pederson led the discussion, and I must admit, he does a pretty good job of laying out the issues, inviting questions, and building on the input of audience members. He did put one audience member on the spot: after a fair amount of generally favorable responses and input, Pederson turned to Steven Kant, who opposed the formation of the water project district on Lake Madison last summer, and asked if he had any problem with this new plan.

Kant was already on the record two months ago saying he supports a county-sponsored water quality board. Kant recognizes that a county effort will be able to spread out the tax burden to everyone in the watershed (watersheds—there are three in Lake County) and solve problems beyond the lakeshores.

But Kant also laid down a clear challenge: he looked the four commissioners (Roger Hagemann was absent) in the eye and said the county lacks the guts to enforce the policies the new water quality board may offer.

Case in point: drainage. This issue caught me by surprise; I was expecting a happy discussion of grassy waterways and pollutants. But early in the conversation, John Hess brought up the issue of all the drain tile being installed to move water around the county. Evidently Game Fish and Parks and the U.S. Fish and Wildlife agents have been coming to the county lately to express concern about the amount of water being drained off farmland. When farmer lays tile and drains his water, the next guy downstream gets wet. You get a domino effect of folks tiling to move the extra water they receive from other folks' tiling.

A lot of that water ends up in the wetlands. Now you may think, "Oh, wetlands! The wetter the better!" But as Commission Chris Giles noted, where a foot and a half of water may be good, two foot and a half may be bad for wildlife habitat and feeding patterns. It may also be bad for roads: Farmer Bob may get an inch of water off his planting acres a few days sooner in spring, but that water may collect and wash out roads a section or three downstream, as has happened with a road in Lakeview Township.

GF&P and USF&W have gotten more vocal lately in opposing increased drainage, but evidently the Lake County Commission has not seen fit to oppose any tiling requests. If the new water quality board gets serious, it may find that it's in the county's best interest to stop moving water around and let it settle and filter where it naturally lies.

And that would mean telling certain landowners, "No, no more tile."

Drainage is just one issue, and it's not exclusively an agricultural issue. Homes and businesses building big driveways and parking areas, homeowners dropping rip-rap along the lake, rural homes building septic systems with insufficient drainage, homeowners pouring way too many chemicals on their lawns—all that contributes to water quality problems.

We have to change the way we live and work to address water quality issues. The county has people ready to work on water quality issues—the sign-up sheet drew at least a dozen volunteers for the county to choose from when it appoints this new board in January. The big question is, will the county make the tough choices to put the board's recommendations into action?

Madison Needs Two-Tier Building Permit Fees: Let's Discount Renovation and Small Houses!

Thinking about Jerae and Kendra's fight for their self-evident right to a 42-foot garage got me thinking about Madison's building code. I've grumbled before that the current building permit fee structure is grossly regressive. It occurs to me that the building permit fee structure may also be partly responsible for the supposed lack of affordable housing in Madison.

Now whether we lack affordable housing is open for debate. The LAIC claims to have data showing we lack good affordable housing, but that data has never been made public, so we can only go by what we see on the market... like the $115K house the LAIC built in Silver Creek Circle that, as of Friday, is still being advertised for sale in the Madison Daily Leader.

But let's assume there is a shortage of quality affordable housing. The best housing deals will be small new houses and properly renovated old houses. But small new construction and renovation are exactly the projects hit hardest percentagewise by Madison's building permit fees. Folks looking to build or renovate on a small budget spend a larger percentage of their scarce money on city paperwork than do the big developers erecting swanky digs for wealth buyers.

Perhaps the city could boost the supply of affordable houses and the restoration of older houses in existing neighborhoods by changing its building permit fee structure. The simplest change would be to return to the flat fee and $1/thousand-value scheme or some similar simple uniform percentage fee.

But the city could go farther: why not create a two-tiered permit scheme? Right now, you pay the same for a building permit whether you are spending $200,000 to build a new house or to renovate an old house (I know, that would be a lot fo renovation!). Imagine instead if we set different permit fees for new construction and for renovation: charge maybe 1% of value for new construction permits and 0.5% of value for renovation permits. The dollar difference may not be huge, but a $200 break on a $50K renovation project will buy a lot of construction glue and screws. More importantly, such a break on permit fees for renovation would acknowledge that older homes add character and charm to neighborhoods that are worth preserving.

If Madison needs more affordable housing, and if we want to maintain a close-knit, walkable community, we need city policies that support such housing and preserves existing neighborhoods close to the heart of the city. A new building permit fee structure would be a useful step in that direction.

Brookings County Wants to Knock Down Houses in One of Best Midwest Neighborhoods

Mr. Powers highlights some special media recognition for his lovely town: This Old House Magazine has named the Central Residential Historic District in Brookings one of the best places to buy an old house in the Midwest. What makes the center of Brookings such a peachy place to perch?

• Lots of trees and greenery
• Proximity to parks and schools
• Downtown restaurants, book store, and antique shops just a five-minute walk away
• Safe place to raise kids
• Children's museum coming in old Central Elementary

TOHM also notes the healthy real estate values in this neighborhood: folks stick around and keep up their properties, and the neighborhood's placement on the National Register of Historic Places prevents "unattractive updates and alterations."

So who would want to reduce the housing stock available in such a great neighborhood? Why, the Brookings County Commision. They think the community will be better served by demolishing a couple of these choice tax-generating houses and replacing them with parking lots.

I don't see parking lots anywhere among the criteria that won Brookings this national recognitions in TOHM.

The National Register of Historic Places can't stop all dumb ideas. Fortunately, we have a public vote as a back-up. Let's hope voters reject the notion of parking über alles and preserve the integrity of a healthy, tight-knit neighborhood.

Hay! Straw Bale Construction in Hot Springs

You can't make stuff like this up: A guy named Hay is building a house of straw.

The Rapid City Journal picks up a story from the Hot Springs Star on James Hay's efforts to rebuild his home and shop with straw bales. His old place burned down; his new straw-bale building will be nearly fireproof... really! Think about it: you stack and pack those bales, seal 'em up with stucco, and air can't get in to fuel any combustion.

Air can't get in... that also means the house is darn near winter-proof, with insulation R-factor that Hay estimates to be 40 to 55. (If you live in 2x6 walls, you might get R-20.)

Hay digs the green value of straw-bale construction (as do some Republicans!). Straw is a cheap, renewable local product. Straw bale construction is also a great do-it-yourself project: Hay is building his 1200-square-foot shop/garage as practice for his planned 3000-square-foot house. Self-reliance—Republicans really ought to like that!

Prairie Roots and I (and maybe even Flying Tomato) are pleased to see others recognizing the value of straw bale construction. A lot of folks talk about making money by turning straw into cellulosic ethanol someday when the science makes it cost-effective. I would suggest we could turn our South Dakota straw to gold right now, in straw bale construction! Just think how many houses we could build right here in Lake County from our very own straw instead of imported lumber. Imagine if the thousands you give to big lumber companies for building a house in Lake County could instead go straight into the pockets of local farmers. Turn those dollars over!

Hey, maybe Randy Schaefer and the LAIC should look into making the next Madison TIF house out of straw bales!

Proposed Christian Women's House Violates SD Rental Law?

Thursday's print MDL gives front-page coverage to what looks like obvious housing discrimination. Mary Hunter of Madison and Tom Christopherson of Sioux Falls bought the old Trinity Lutheran parsonage last September. They lived in the house while their dad, James Christopherson, was pastor at Trinity in the 1970's and '80's. Hunter and Christopherson tell MDL's cub reporter Danny Andrews they plan to rent the house out to college-aged Christian women:

"We want to keep its heritage of a family house," Hunter said, adding that she hopes the women who live there to be [sic] "a sisterhood of believers."

..."I hope this house will be able to... [m]aintain that sense of a Christian home, a Christian community," [Christopherson] said [Danny Andrews, "Family Home Finds New Life as College Student Housing," Madison Daily Leader, 2009.04.23, pp. 1–2].

Andrews fails to ask the landlords about SDCL 20-13-20, South Dakota's discriminatory housing statute (emphasis mine):

20-13-20. Unfair or discriminatory housing practices by owner or agent. It is an unfair or discriminatory practice for any owner of rights to housing or real property, or any person acting for an owner, with or without compensation, including any person licensed as a real estate broker or salesman, attorney, auctioneer, agent, or representative by power of attorney or appointment, or to any person acting under court order, deed of trust, or will:

1. To refuse to sell, rent, lease, assign, sublease, or otherwise transfer any real property or housing accommodation or part, portion, or interest therein, to any person because of the race, color, creed, religion, sex, ancestry, disability, familial status, or national origin of the person or persons intending to reside there;
2. To discriminate against any person because of that person's race, color, creed, religion, sex, ancestry, disability, familial status, or national origin, in the terms, conditions, or privileges of the sale, rental, lease, assignment, sublease, or other transfer of any real property or housing accommodation or any part, portion, or interest therein;
3. To directly or indirectly advertise, or to indicate or publicize in any other manner that the purchase, rental, lease, assignment, sublease, or other transfer of any real property or housing accommodation or any part, portion or interest therein, by persons of any particular race, color, creed, religion, sex, ancestry, disability, familial status, or national origin, is unwelcome, objectionable, not acceptable, or not solicited;
4. To refuse to permit, at the expense of the disabled person, reasonable modifications of existing property that may be necessary to afford full enjoyment of property. The landlord may, where it is reasonable to do so, condition permission for a modification on the renter's agreeing to restore the premises to the condition that existed prior to the modification, reasonable wear and tear excepted.
   

The provisions of subdivisions (1), (2), and (4) do not apply to rooms or units in dwellings that contain living quarters for no more than two families living independently of each other, if the owner maintains and occupies one of the living quarters as the owner's residence.

This section does not apply to dormitory residences maintained by public or private schools, colleges, and universities for the educational benefit and convenience of unmarried students or to dwellings occupied by fraternities or sororities officially recognized by such institutions. Nothing in this statute may be construed to displace federal, state, or local guidelines setting reasonable standards governing maximum numbers of occupants.

Welcome to the rental business, Tom and Mary. If you're renting this house, you can't even ask renters if they go to church (or even, in case of skinny applicants with short hair, whether they are female). The statements made by Hunter and Christopherson in Mary's husband's own newspaper might trigger this statute: a front-page news story with the subhead "Parsonage to be rented to Christian women from DSU" pretty clearly indicates and publicizes that rental by persons of one particular sex and most particular religions is not solicited.

Hunter and Christopherson refer to their positive experiences in themed housing at St. Olaf College. They're right: living in such intentional communities with folks of shared interests can be a great experience for college students. I certainly find living with a Christian woman to be a rewarding experience... although that might be a better argument for mixed housing.

Some dedicated Christian women's housing would be a nice way to carry on the spiritual tradition of the old Trinity parsonage. Maybe there is an arrangement by which Hunter and Christopherson can make their plan work. Maybe they can recruit some DSU ladies to start South Dakota's first Alpha Delta Chi chapter. But as it stands, unless I'm missing something (and if I am, I know you loyal readers will fill me in), you can't just up and rent your house exclusively to Christians, or women, any more than I could rent our Lake Herman guest cabin exclusively to atheists (not that I can find any around here).

TIF District at Work: Duff's New House on KELO

Your tax dollars at work: Rita Duff's new house in the TIF district gets some KELO coverage:



But wait a minute: Forward Madison is using this project to grow the population? I know Rita; she's a Madison girl. We're keeping population, which is great... but growing? Is Dwaine giving us more LAIC-speak?

Oh well, I guess if it ain't negative, it's positive. Now, how about those sidewalks?

So What's the Covenant Say About Ice Shacks?

I know some folks up in the Williams development would rather not see "undesirables" infiltrate their posh neighborhood with houses and outbuildings that don't rise to their discriminating standards. So what's the covenant say about the oh-so-tasteful Bears ice shack at 810 NW 11th, a block up from the site of the future Habitat house? I don't think that big orange C quite matches the siding....

County Poor Farm Public Access to Lake Madison? Meeting Thursday!

Hey, neighbors, clear those calendars: the Lake County Commission is hosting a special meeting Thursday night to discuss opening the old county poor farm to create a new public access area on the west side of Lake Madison, just off Highway 19.


View Larger Map

This little patch of land, one of the last open plots along Lake Madison tucked between fancy-pants houses, has been mined for gravel and leased for farming. It became a point of contention this winter when the county commission considered leasing the shoreline portion of the poor farm's 150-odd acres to the state Game Fish & Parks Department, who wanted to pay the county for the privilege of building and maintaining a public access area. Fishermen and local media loved the idea; neighbors (at least a couple of them) did not.

Now we all get a chance to talk about it, including all those Lake Madison snowbirds who've all flocked back to South Dakota now that winter's done (just ignore that blizzard warning).

Comments are welcome here, but they're even more welcome in person, face-to-face, at the meeting. Come talk to your neighbors about the best use for our public resources. Thursday, April 2, 7 p.m., at the 4-H Grounds on Egan Avenue, south edge of Madison, quarter mile west from the white buffalo, across from the Bethel home.

I've got class that night... but my prof lives on Lake Madison! Maybe we'll both play hooky! :-)

Habitat for Humanity Opens New Office on Main Street

Super-cool video blog report!

Our local Habitat for Humanity chapter has a new habitat of its own. The East Central South Dakota Habitat for Humanity chapter, serving Lake and Moody Counties, will now operate out of a prime location right on Main Street—217 N. Egan, sharing space with Jay and Sherry Van Liere in their Lakeview Realty building.

Chapter exec Barb Johnson is quite pleased with the new digs:


Barb and the Habitat board will keep plenty busy this year: Habitat has a house to build in Madison this year:


Hand me my hammer, let's build!

Now some people don't quite get what Habitat for Humanity does. They think Habitat is a charity or (worse!) a government welfare program. Far from it: Habitat is a Christian ministry, putting the Word to work. Habitat calls it "the theology of the hammer" and "the economics of Jesus." The families Habitat builds for pay a fair price for their homes, in sweat and money. Folks who buy Habitat homes sign a contract with Habitat requiring that they put in hundreds of hours of labor, either on their own homes or on other Habitat projects. On top of that work, homeowners then pay a mortgage, just like the rest of us. The difference: they pay that zero-profit, zero-interest mortgage (there's some radical Christianity for you!) right back to Habitat, which then uses that money to build more homes.

Habitat homes are supposed to be modest, no more than 1050 square feet in North America. Building small keeps costs down and focuses on what's important: giving working people affordable options to get out of substandard rentals and housing and under a decent, sturdy roof.

The complication around here: Madison's zoning rules require a minimum size of 1000 square feet, and some subdivisions impose rules requiring big garages and other "amenities" that bloat the building budget just to "maintain property values." That makes it a little tough to find a suitable lot in Madison for a house that truly fulfills Habitat's mission.

Folks need to recognize that small houses are not a detriment to our community. Habitat houses are an improvement over whatever the families buying them had previously. Habitat houses add to the tax rolls, and they give that many more families the pride and responsibility of homeownership, not to mention health, safety, and stability for the kids, that strengthen the whole community. You don't need 1500 square feet of house hiding behind a giant garage to achieve that. (Maybe the folks who brought the economy crashing down by buying more house than they needed will realize that and change the way our culture thinks of housing.)

If you'd like to put your faith into action, drop by the Habitat office downtown. Give Barb your number, and when Habitat's ready to build this summer, your phone will ring.

Thune's Worst Argument Yet: South Dakota Shouldn't Help Other States

Pot, meet kettle:

On legislation before the U.S. Senate to help stave off home foreclosures and help some buyers ride out the recession in their own homes, Senator John Thune makes the worst argument a South Dakotan could make against federal legislation:

"You've got Nevada, Florida, California and Arizona and I think 35 percent of all the problems are in those states. But by in large, when you have 97 percent of the people in South Dakota are current in their mortgages it does mean yes...that we are essentially helping those states where they've had the biggest problems," South Dakota Senator John Thune said [Jon Wilson, "Senate to Debate 'Cramdown' Bill," KELOLand.com, 2009.03.11].

Oh my. South Dakota shouldn't help other states? Senator Thune, you've read this blog; you should know better. I hope your colleagues from those states don't take that argument seriously. Otherwise, they might look at the following ratios of federal dollars received per dollar of federal tax paid (2005 figures) and get a little owly:

• Nevada: $0.65
  
• Florida: $0.97
  
• California: $0.78
  
• Arizona: $1.19
• South Dakota: $1.53

No wonder Senator Thune and Senator McCain are such pals: they both come from full-blown welfare states, taking in more federal tax dollars than they pay.

The homeowner bailout may have other reasonable arguments against it, but saying South Dakotans shouldn't help out their fellow Americans is rank hypocrisy for any South Dakotan.

Minnesota Offers Islamic Mortgages -- Roadmap for More Stable Housing Market?

A reader eager for conversation directs my attention toward Minnesota, where our progressive neighbors are helping faithful Muslims become homeowners. Minnesota Public Radio reported March 1 on Minnesota's "New Markets Mortgage Program."

Apparently Muslims who take their faith seriously consider paying or charging interest a sin. (Hmm... didn't Christians have a rule like that once upon a time?) That piety makes it kind of tough to buy a house. Realtors^® like PP will tell you owning a house is good for the whole neighborhood.

So Minnesota is piloting a new program that helps Muslims get houses without paying "interest." The "Murabaha Agreement" actually sounds like just a word game: the state charges a higher upfront price and works out payments that equal what you and I would pay if we bought at the regular market price and then paid principal and interest over 30 years. but that extra money isn't "interest"; it's "profit." (Financial experts in the audience, feel free to clarify!)

So no welfare, no handouts, just play a word game, increase home ownership, benefit the community. In the middle of a recession, when everybody is desperate to reverse the housing collapse, is there a downside to a program that puts more people in houses?

This program could provoke some fundagelical readers to rediscover the value of the separation of church and state. Minnesota is essentially accommodating Shari'a law, the principles of a specific religious group. If this program favored Muslims, it would deserve a stern boot from the judiciary.

But as far as I can tell, there is no establishment of religion in the New Markets Mortgage Program. The Minnesota Housing website doesn't indicate that the program excludes non-Muslims (come on, Minnesota wouldn't be that stupid, would they?). Minnesota's not even offering a special advantage to Muslims; the state is essentially making available to Muslims a portion of the market that the rest of us carefree usurers already enjoy.

One might make a slightly firmer argument that Minnesota's NMMP violates free-market principles, but that feels thin, too. If the final sale price is equal to the principal and interest of a traditional loan, a Murabaha agreement doesn't skew the market. There's no subsidy of unfair competition. Private sellers are free to jump into the market and try cashing in on this demographic.

Promoting Muslim home ownership might even be good for the economy, immediately and in the long run:

Chicago-based Devon Bank is underwriting the loans for the New Markets program. Devon is one of the largest Islamic lenders in the country. Corporate Counsel David Loundy says he expects the demand for Islamic financing to grow as more Muslims make their home in the U.S. Loundy says Muslims tend to be good risks.

"If they worked so hard to get to this country, they don't want to screw it up now that they are here, so they tend to pay their debts pretty promptly," said Loundy. "In addition, you have a population that is religiously and culturally predisposed against having debt, so they want to pay down their debts as quickly as they can."

The numbers back this up. In its five and a half years offering Islamic lending, Loundy says Devon Bank hasn't lost a penny, though he admits the recession could make that record difficult to sustain as more borrowers face job loss.

But the bad economy is also offering opportunity. With housing prices at rock bottom, officials say the timing couldn't be better to match first time Muslim buyers with foreclosures that need new owners [Jessica Mador, "New Islamic Mortgages Now Available in Minnesota," Minnesota Public Radio, 2009.03.01].

Let's see... A group of hard-working buyers morally opposed to debt. No defaults in five-plus years. Owners eager to occupy foreclosed properties and prevent neighborhoods from falling into abandon. Sounds like America could use a whole lot more Muslim homebuyers!

Oldham Revives Homestead Act, Clings to Unsustainable Lifestyle

Two cheers and a half for the city of Oldham, where mayor and economic development president (why can't Madison combine those positions?) Roger Eide has announced free lots for building single-family homes. Applications are available online.

Why the half-cheer discount? Because Oldham is promoting its free lots program by portraying itself as a convenient bedroom community:

A variety of employment opportunities can be found within an easy commute from Oldham. There are businesses that have located or are expanding in the cities of Brookings, Madison, Sioux Falls, Arlington, Lake Preston, DeSmet and Howard [Roger Eide, City of Oldham, press release, 2008.10.23].

Regular readers know I'm all about our small towns making efforts to attract new residents and keep their local economies alive. Small towns have to build on what they have, and when it comes to jobs, Oldham doesn't have much to offer but proximity to jobs in other towns. Mayor Eide is being straight with prospective homebuyers about job options, and that's to be appreciated. But $4-per-gallon gasoline last summer showed us the limitations of an economic development model based on commuting. Even if experts assure us gas prices won't surge this year, oil and commuting are only going to get more expensive, not less.

Now we've probably got some chickens and eggs here: it's hard to bring new residents to town if you can't offer them jobs, but it's hard to create jobs if you don't have residents to fill them and places for those residents to reside.

If Oldham's neo-Homestead Act can attract new residents and make it possible for a working family or two to build a decent house that they couldn't otherwise afford in Madison or Brookings, then more power to 'em all. But in the long term, Oldham and other struggling small towns will want to be more than sleeping suburbs for bigger towns. They'll need to get creative and find ways to sustain their own local economies, with less dependence on cheap transportation.

LAIC, Openness, and Making Money off Gifts from Citibank.

Our local economic development organization, the Lake Area Improvement Corporation, seems to have discovered public relations lately. Two big front-page spin sessions in the Madison Daily Leader, a big press release on their own usually static website... boy! the LAIC can certainly be open when they want to be. Now if they would only pay attention to the research and President Obama and recognize that openness is not just pronouncements from the Politburo but two-way communication coupled with transparency and participation (not just for the folks who bring money to the table, but for all of the public you serve).

I am pleased to read that the LAIC's land speculation and picking of winners in the marketplace has been such a rousing team effort. Whether this effort is really warranted remains open to debate. The LAIC might put that debate to an end if it released for public viewing the vaunted LAIC housing study. Alas, the asking price for that study is still $250, and I still haven't been able to justify within my household budget an expenditure of that magnitude for data that really ought to be free to the public.

But wait a minute: as I read the press release, I am reminded that the LAIC received donations to cover the housing study. Citibank gave the LAIC a $2500 grant to help cover housing study costs.

The LAIC is charging us for a study that they paid for with handouts from others.

Funny: the LAIC tells me they don't believe in handouts. I guess that's another LAIC principle, like communication, that applies only in one direction.

Irish Housing Prices May Drop 80%

And you thought America's housing bubble was bad...

While Madison has to resort to quasi-socialism to get houses built in the Silver Creek development, at least we're building something. Over in Ireland, one economist predicts that house prices may drop 80%. Economist Morgan Kelly also contends that after a decade of financial risk-taking, Ireland will see more house demolition that construction.

Uff da—so much for the luck of the Irish.

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Another housing note: The Mitchell Republic's Seth Tupper argues the mortgage meltdown may be hitting South Dakota harder than some popular yet incomplete data suggests. Is reality about to take another whack at the smiley "everything is fine" boosterism of the Mike Rounds/Russ Olson wing of the SDGOP?