Editorial
Front Page - Monday, April 13, 2009
An economic stimulus package in Benton?
Ethan C. Nobles
Special to the Daily Record ecnobles@att.net
In March, the city of Benton put a couple of programs in place to stimulate building and subsequent economic development.
Benton Alderman Doug Stracener said the City Council, for its part, passed two ordinances – one that sets a moratorium on building fees and one that reduced the utility connection fees by about 30 percent.
“We did this in hopes of stimulating the local building market in Benton,” he explained. “I think that we are the only city in the state that has taken such a proactive approach to stimulate development.”
Essentially, building permits were waived for six months, but builders will still have to pay for inspection fees.
In essence, the moratorium and reduction in connection fees will result in a savings of about $800 on a 2,500 square-foot house. Building permits cost $.0625 per square foot, meaning it will cost about $500 to buy a permit for that 2,500 square-foot-home. Meanwhile, sewer connection fees have been dropped from $1,000 to $700, resulting in a net savings of about $800 under the new programs. Electric and water connections, by the way, cost $200 apiece.
Meanwhile, the Benton Public Utilities Commission approved a measure allowing builders this year to put a surety bond in lieu of connection fees. Cindy Hawkins, billing services manager for the Benton Utilities Building Department, said that bond essentially gives builders the option of putting off paying connection fees until Jan. 1 – hopefully giving builders enough time to sell a home then collect the electric, water and sewer connection fees from the new owners. The bond comes due when the property is transferred or when Jan. 1 comes around if the property has not been sold.
As for the economic development component of the program, city officials said the idea is that businesses follow people, and more residences will only attract additional citizens to Benton.
While Saline County is currently home to around 103,000 people, homes sales have been down in the area over the past couple of years much as they have been in housing markets throughout Arkansas.
Sales peaked in Saline County in 2005 when 1,988 single family, new and existing residences were sold. The number of homes sold in the county fell to 1,904 in 2006, 1,799 in 2007 and 1,444 last year. Through February, 142 homes were sold in Saline County, down 32.7 percent from 211 sales in the first two months of 2008.
Meanwhile, the Benton Chamber of Commerce announced an upcoming ad campaign in conjunction with the city of Bryant. The goal of the campaign, according to a news release from the Benton Chamber, is to promote the towns as desirable places to live by emphasizing schools, parks, medical facilities, steady home values, proximity to Little Rock, police and fire protection and the availability of mortgage lenders to people wanting new homes.
Such a campaign is right in line with observations made during a conference held in January by the Urban Land Institute in Washington, D.C. During that Internet-based conference, Nicolas P. Restinas – a member of President Barack Obama’s transition team – confirmed the administration is particularly interested in turning around housing markets around the nation.
Restinas said boosting housing markets is a central component to the Obama administration’s attempts to revive the economy.
So far this year, the federal government has passed an $8,000 nonrefundable tax credit for first-time homeowners. And the economic stimulus packages from both the George Bush and Obama administration have led to lower interest rates due to the decision of the federal government to purchase troubled mortgage-backed securities – a move that led to more investment in those securities. When those securities are perceived as more secure by investors, mortgage interest rates drop as a result.
Benton and Bryant’s moves to boost housing markets seem right in line with efforts to make the prospect of home ownership attractive to more
Americans.
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