Monday, February 19, 2007

Economic Impact, Monthly Costs

With the post, Economic Impacts, Population Figures, I was unable to calculate the projected number of residents that might live in a 2,300 home development.

To more accurately attempt to determine what the possible economic impact within a 5-mile radius of Ponte Vista might be, it is also necessary to determine if the residents of Ponte Vista might have enough disposable income, after financing their home, paying fees, taxes, and insurance to spend within the area.

This post is different because I have used exact criteria that may help in understanding the costs and fees related to owning a home at Ponte Vista. I have created two different tables, based on figures found on the Internet and backed up by facts known to me as to the most likely Property Tax rate for homes built in or around Ponte Vista. I have alse established a loan percentage rate that I use for all home prices and I have used a ratio of possible monthly HOA dues and fees for Ponte Vista.

I cannot guarantee that my figures would apply to anything actually built at Ponte Vista, but I do feel the figures presented here represent a possible cost and fee structure that may resemble costs and fees that may be applied to the Development.

The first figure I looked into finding out about is the yearly property tax for homes in the immediate San Pedro area adjacent to the Ponte Vista site. I was very much in luck to find the tax rates for both the single family home closest to the site in San Pedro, and the condominiums directly next to the site. Luck continued to be found when I discovered that the 2006 tax rates were the same for the two different types of housing. Using tax table 014 for the single family residence and tax table 01669 for the condominiums at 28006 S. Western Avenue, I found that the tax rate is 1.179045 or about 1.8% of the assessed valuation. I used this rate to calculate the tax on the selling price of new homes at Ponte Vista. It also didn't matter what type of homes or the zoning of the site because both single-family homes on R1 lots and the condominiums share the same tax rate.

The second calculation I tried to figure out is what the monthly HOA dues and fees might be for homeowners at Ponte Vista. Mr. Bisno and I both talked to each other about how we though the HOA dues and fees charged at Playa Vista seemed to be too high for what might be charged at Ponte Vista. At Playa Vista, everyone is charged a flat rate. Then on top of that there are added charges based on the development within Playa Vista where folks live. The more expensive the home, the larger the added charges are. I decided to use a monthly fee of $350.00 for a $400,000.00 home at Ponte Vista. I then determined that the fee factor is .000875 the selling price of the home. I used the factor throughout the tables and found that each different price provided a different fee structure. I found it is reasonable to believe that the more costly homes at Ponte Vista should be assessed a higher fee structure than the less expensive homes. I did not feel that someone living in a $400,000 home should have to pay the same dues and fees as a person in a $1.25 Million Dollar home.

The third factor I chose was the use of a 30-year loan at a fixed, 6.5% interest rate for all home prices within the development. Nobody really knows what the price for money will be when the first home is built at Ponte Vista, so I used the easiest and most readily available rate found on the Internet at loan calculator sites. I am also using a 15% down payment on all homes, because I found it easier to calculate with.

The forth factor, homeowner insurance is purely a guess on my part and I have no idea whether the figures I used are correct. They are on a sliding scale depending on the financed price of the home.

A fifth factor cropped up and I use it for the second table. There are many local residents who are interested in selling their currently paid off home and buying a new home at Ponte Vista for cash. These folks probably are carrying a much less property tax burden than what they will find at Ponte Vista, and for the majority of them, they have probably never paid any HOA dues or fees while living in San Pedro or some other location. These individuals probably need to more accurately understand that they will, most likely, be paying much higher property taxes than they currently pay and, in essence, they will be giving portions of their kids' inheritances to the company that will eventually manage the Ponte Vista at San Pedro site.

This post will not report calculations on what income is required to be able to get a loan to buy a home at Ponte Vista because I haven't done the work on that yet, and with the "empty nesters" relocation plan, calculations of these types are not factored here.

Table 1 Home pricing, financing, tax, insurance, fees, monthly payments.

Table 2 lists possible fees, taxes and insurance based on the prices of the homes and breaks that that total down to 12 equal monthly payments.

By looking at the figures provided in this post, a person should be able to acertain whether they might be able to make the payments required and pay the taxes, insurance and fees associated with living in a home at Ponte Vista.

The word "affordable" have been used many, many times by just about everyone discussing this development. I feel I have provided some examples of facts and figures that may help more citizens understand what "affordable" may mean to them, the developer, and individuals and groups opposed to building 2,300 homes at Ponte Vista.

In a future post I will attempt to establish what income level is needed to buy a home at Ponte Vista and whether "empty nesters" on fixed incomes may actually be able to afford to live in Ponte Vista while their retirement savings and investments are used to pay for all that is necessary in purchasing a new home at Ponte Vista.

On a more personal note, I am simply just exhausted listening to "supporters" suggest that any homes at Ponte Vista are "affordable". To many residents of our area, some of the homes are affordable to them. But supporters have a way of not being able to continue a discussion about the affordability of the homes because they seem to lack enough information to base their beliefs on. Supporters, if you are going to continue to contend that homes at Ponte Vista are going to be "affordable" get your facts straight and understand that there are many individuals in the area who know more about the pricing, affordability, cost, taxes, and fees than you do.

To opponents of the project, please also have your facts straight when encountering supporters.


Anonymous said...
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Anonymous said...

several new endorsements were recently added to the ponte vista web site, along with some previous news reports.

Anonymous said...

RL Staff Writer Laurie Bongard published a story about this particular subject in the June23-July6 issue.

The story is titled "Ponte Vista's Economic Impacts"

Perhaps it can be found online somewhere...

M Richards said...

Thanks for the heads up.

Being on the CAC means I get lots of information about Ponte Vista.

The Ponte Vista Supporters page of has some interesting and funny facts:

"Over 5,377 community members and leaders support Ponte Vista..."

"Individuals who do not support R-1 zoning, or single family homes, at Ponte Vista: 5,377"

Wow, I sez to myself. It seems pretty lock-step to me.

Digging deeper into the whole Ponte Vista scheme you should also be able to find that the commercial development planned for Ponte Vista would be some of the final buildings built at Ponte Vista and not the first. Residents will have to wait to buy their coffee and have their clothes cleaned until the final phase.