The Observation Deck

There have been a number of threads discussing the high tax rates of Lakewood. Some have even suggested that those rates might be the cause of people moving from Lakewood. While certainly our rates are high, anyone who views this as a cause for flight has failed to look at the entire picture.

Lakewood’s current tax rate is 2.48, as a percentage of value. It is HUGE! However, while that is one of the highest in the area, the rate, in and of itself is of no great consequence. It only has meaning when applied against the property value. A more expensive property, with a lesser tax rate, will nevertheless result in greater out of pocket costs. But there are additional factors to be considered.

So, let’s assume that in order to flee our tax bite, you have decided to move to a community with a much lower tax rate. Preferably, out of Cuyahoga County. You presently own an “averageâ€Â￾ Lakewood home, a median value of 153,500.00 with around 1750 square feet on which you put 20% down. You commute to your job in Cleveland, 100 miles per week, burning 4 gallons of gas. Your mortgage, at 6.5% on your 122,800 loan is 776.00 per month. Your taxes are 3806.80 per year (317.23 per month). Not counting insurance, your monthly housing cost is 1093.22.

You find a wonderful “averageâ€Â￾ home in Avon, same approximate size. Even though the median cost in Avon is 292,500, you’ve lucked out, and found a house similar in size to your Lakewood property at only 225,000. Avon tax rate is much less than Lakewood. Only 1.66%! You will only be paying 3735 (a yearly savings of almost 72.00), even though the house is more expensive. But, your mortgage payment is going to go up. You now have a mortgage of 180,000, which at the same rate means a monthly cost of 1138.00. Your commute has also gone up. You’re now driving 200 miles per week burning 12.00 more gas. For a monthly savings of $6.00, you have now incurred additional costs (mortgage, gas) of $412.00.

If you do the calculations, you will find that just to “break evenâ€Â￾ the most you could spend on your Avon home is about 168,000. You may find a condo at that price, but then you have to figure in your monthly association fees. And, it is doubtful that you would find the same amount of home in Avon at 168,000 that you had in Lakewood.

My point? Anyone blaming tax rates alone for an exodus is throwing out a red herring. It’s a bogeyman. But, don’t trust me. Take a look at housing. Figure out what would be an acceptable house with a lesser tax rate. Run the numbers, including mortgage payments, transportation, etc. If you want to get really artsy, factor in the net loss of return on your down payment vs. projected real estate appreciation. What you’ll see is that despite the scary tax rate, Lakewood housing is still one of the best bangs for the buck around.

Jeff

We are pleased to announce that in addition to the Chef Geoff food and cooking column, Jeff will also be writing a Math column for upcoming issues of the Lakewood Observer.

We look forward to this exciting new addition to the paper.

Get out your pencils and calculators.

Jeff,

I agree with you that people are not leaving here to save money. Most of the people that I know that have left to move to Avon left because they were willing to pay but wanted something more, like nice smooth streets, brand new homes with lower heating and cooling, attached garages, clean parks, a city that responds to noise and graffiti. If we are going to pay so much lets at least get something for it. Right?

The roads in Avon are not all smooth. Smooth roads also make speeding more fun, which means more car accidents and the noise of people gunning the engine.

Living in Avon typically means twice as much driving or more. This shortens the lifespan of a car considerably, even if it is a japanese car. Cars are pretty expensive.

It can get pretty noisy in Avon also. You've got privileged white teenagers driving around with expensive speakers. Or you end up living in a new cul de sac, or automobile ghetto. Your kids grow up without anything to walk to, so mostly they watch videos and get very chubby or all ADHD-ed up, unless their parents are foreigners who pressure them to succeed. But mostly they have the same propensity to fall into drug or premarital sex habits as inner ring suburb kids do. and they seem to talk a lot louder and randomly start shrieking just like inner ring suburb kids do.

Then you've got the next oil war rolling around, and the usual willful obliviousness to why that is. Despite our administrations best intentions these are not-for-profit wars, financed for a net loss by either tax hikes or borrowing money from our trading deficit partners.

I am not pitching Avon, just pointing out that people are willing to pay for value. As our taxes increase what do we get? The school bond is a great example, people are willing to put out money for something that will benefit them.

Jim had mentioned in a previous thread that you shouldn't buy more than you can afford, I agree, but I think you should be wise with what you invest in. If someone can spend similar dollars and get much more in return why shouldn't they?

Lets really look at possible cuts and do what people are not willing to face, the fact that we are out of money and city services will continue to get worse unless something is done soon. I know the mayor wants to keep his job in November but we need action.

ryan costa wrote:Smooth roads also make speeding more fun,

I knew there was a reason I like driving around out there...
Sorry.

Congrats on your new position Jeff!
Joe

I think you should be wise with what you invest in. If someone can spend similar dollars and get much more in return why shouldn't they?

Which is precisely the point. If you move from Lakewood, AND spend similar dollars, you may get a different array of services, maybe some new taxes to pay for the need for new infastructure to support the population increase, but for the same dollars, you won't find

brand new homes with lower heating and cooling, attached garages

.

For that, you're going to have to get well into the mid to high 200's. To duplicate a Lakewood home in that range, you'll be looking at 300 plus.

Jeff

First, I didn't say exact, I said similar. Most of the people I know that have moved into what I mentioned earlier spent around $600 more a month net. One big difference you have not mentioned is utilities. For the most part it costs less to heat and cool in brand new homes.

I am not suggesting it is worth moving, I was just mentioning that I thought most people were not leaving to save money but to get, in their opinion, a better value.

A friend of mine who lives in Cleveland told me yesterday he wants to move to Lakewood. He currently owns a house on the near west side.

I told him he was a freak'n idiot. No, just kidding. His wife is from Italy and they have a young boy who will be entering into school in a few years. His wife is used to being able to shop at local stores. She doesn't understand areas like Avon where to get a loaf of bread you have to drive to a strip mall. They are also very aware of the schools being built and the great reputation Lakewood Schools have. They are also aware of all the positives going on. Like the new Library wing and some of the other building and projects you see going on. Yes, he's aware of the taxes too. He's also aware of the crime and thugs wondering around with their pants pulled down walking down the middle of the street. But he knows that in Lakewood when you call the police the response time is in minutes whereas in his 'hood' they count by hours.

He's a smart guy (holds a Masters in math), does well, and could move to any of the new stapled together ex-corn field homes *cough cough* Avon *cough*. But he chose Lakewood.

I overheard a neighbor say the other day "man this neighborhood has gone to @#$". Maybe. Maybe not. Our street is still a nice street (I've been on this street since about 65). Always has been. I walk my dogs every night and look around. The nice houses I see on Clifton have always been nice houses. The crappy ones have always been the crappy ones. The crappy streets have always been that way and the nice ones have always been the nice ones. In other words, have things really gotten worse? I don't know. But it seems like the streets and houses are basically the same as they were 30 years ago.

I just thought I'd pass this along because it seems all I read is doom and gloom here. There are people outside of Lakewood that see the positives. Sure they see the negatives as well, but it's not all bad. There are people who see the good things that people are trying to accomplish. I just hope it continues. Will I still be here in a few years? Don't know, time will tell. Hopefully things won't get worse.

Of course having said this I'll walk down Lake or Edgewater tonight and have to move out of the way of a hiphopster thugs walking down the middle of the street with his pants pulled down... why don't they get arrested for that?

I guess my point is yes the taxes are a joke, yes the thugs MUST be brought under control (read Feagler from a couple weeks ago), yes there's garbage on the streets, yes there's blah blah blah... and things look a bit scary but I haven't totally given up on Lakewood. I'm just on the edge.

So, Jeff, if I get run out of Lakewood and it's not the police doing it, it'll be the thugs, poor streets, and so on before the taxes do.

I can't believe I just said this... somebody shoot me please.

Joe
PS-
you can not compare a cardboard cornfield house to a Lakewood house. For one thing, Lakewood homes have character.

Ryan Salo wrote:Jim had mentioned in a previous thread that you shouldn't buy more than you can afford, I agree, but I think you should be wise with what you invest in. If someone can spend similar dollars and get much more in return why shouldn't they?

Ryan

I agree if it suits them. I am just trying to see where that is. When people gloss over facts, it becomes hard.

Can Lakewood compete with housing developments and culde sacs, no, but why do we have to? Can we comepte with malls every half mile, no but why should we? I have never said Lakewood is perfect for everyone, I juts think it is OK for a majority of the people that live and continue to.

Can it be made better. Sure, it is easy, but the question then becomes; What do we cut, to pay for it? What do we give up? Is it something the city needs or adds to the city or the dreams of a few? I think this summer will make all that moved think twice.

Moving because of expense is a total red herring.

.

While the overall difference in cost may be minimal based on the assumptions, I see the high property taxes in Lakewood to be a wasted expense. The phrase is, you have to spend money to make money. NOT you have to waste money to make money. But then again it's government spending and that rarely seems to make sense. For instance, what was the convoluted reason that Warren Road was closed forever then reopened without being resurfaced, rougher than ever? Somehow couldn't coordinate that repair? Will the same result occur for the mess on Detroit Ave?
Anyway, I am still uneasy about this 27 year payout for the levy that passed yesterday. If (and that's a big if), the new schools are really going to be the thing that turns around Lakewood then why is there no confidence that the $1/month can't be made up in higher values on taxable property. After the responses the other day I feel like this needs to be spelled out. 2.46% (or 2.6 as I have seen) is charged for property tax. That means that if we have properties selling at a higher value we can have more income without increasing the percentage collected. The promise of the schools and the justification I assume for why this expense is passed on to only the property owners is that it will increase the value of their property. Yet, I think we all know that once this happens the property tax will not decrease. So was this something that was already factored in? If property values do not increase will a further levy will be necessary before too long?
There is a difference between the value of an item and the cost of an item. What I am seeing is that value has not been delivered and speaking for myself consumer confidence is very low. That is not the time to increase your prices. I'm glad that residents have hope for positive change, really that's great. The nice thing about hope (and conversely gloomy outlooks I suppose) is that it doesn't necessary have to be supported by evidence.

Shawn,

I agree with you that it is all about value.

Someone please correct me if I am wrong, but I believe that unlike the income tax, the school bonds and levy's do not increase with the property value, they are capped, that is why they have to come ask for more all the time. Does anyone know if this is a state issue or federal?

Lakewood is a great place, but I think we need to keep the problems up in front, nothing gets done without that.

For what it's worth, I used to live in Avon but now proudly call Lakewood my home. This city might not have everything for everyone, but I certainly feel I made the right choice for me and my family. I also believe that the numbers generally work in my favor when you look at the whole picture.

Jeff

the response that I got from the city seemed to indicate that it was a property tax item. the language seemed to support this with I believe it was .19/100 of taxable property.

Yet, I think we all know that once this happens the property tax will not decrease. So was this something that was already factored in? If property values do not increase will a further levy will be necessary before too long?

Wrong. This is a bond, solely for the construction of the facilities. Once it's paid off, it's gone. There is a huge difference between a continuing operating levy, which goes on and on and a bond that is off the tax rolls once paid. It's also for a stated amount and that amount is raised when the bonds are sold. Fluctuations in property value do not have any affect, unlike levied that have an effective rate that decreases over time.

There is a difference between the value of an item and the cost of an item

Exactly Shawn. That's the point. But, cost (in this case housing) is a great deal more than the tax rate. Is the value of living in Lakewood, when ALL things are considered, greater than the value (even if at increased cost) from living elsewhere. When your OVERALL housing expense is maybe 4-500 a month less to live here, is there comparable value recieved when living in comparable, but more expensive housing elsewhere? I think it's an angle that the Chamber could really capitalize on.

Jeff