Archive for November, 2009

Recreation Subsidies

Monday, November 30th, 2009

When the recent “Veterans Day Storm” slammed the east coast November 11-15, some Cape May County island homeowners suffered water damage and wind damage to their properties.  For most, it was business as usual and they cleaned up the mess and moved on.  It’s life at the shore for those in the few scattered low-lying streets in Wildwood, North Wildwood, and West Wildwood.

The beaches are another story.  So that local governments could score Federal Emergency Management Agency (FEMA) money, New Jersey Governor Corzine obligingly declared a state of emergency.  The damage to Cape May County, originally ballparked at $89 million, was determined to actually be $27.3 million.  Those beach erosion figures are based on $10.40 per cubic yard of sand to be replaced.  Sand for dunes is calculated up to $20 per cubic yard.

The bigger question here is whether the U.S. government should be subsidizing beaches.  Is it fair to someone living in Iowa to pay for beaches in Avalon rimmed with $4 million vacation homes?

What would homeowners who cry for FEMA beach funds in their communities think if the federal government started funding ski resorts?  Heck, they want snow by Thanksgiving to have a good year.  Should we be subsidizing snowmaking operations at the hundreds of ski slopes throughout the U.S.?  Let’s take it a step further and put refrigeration lines under each ski slope.  That’ll make the millions of American skiers happy.

While we’re at it, why not have FEMA subsidize all the golf courses in America?  In a drought, ship in tanker trucks of fresh water from the Great Lakes and major rivers.  That would please the 24 million Americans who play golf.  They want lush green golf courses, not those spotted with burned out patches of grass.

Do you see my point?

With oceans rising as the Arctic, Greenland, and Antarctic melt, the beach erosion problem has intensified.  Many local shore towns will be doing two beach replenishment projects this year.  Ten years from now, it may necessitate three or four a year, which isn’t going to happen.  FEMA will finally say, “No Mas”.

So it’s time to be proactive.

Where beaches habitually wash out in storms, it is time to rip rap with massive walls of boulders, much like the seawalls recently constructed at the north end of both North Wildwood and Avalon at the inlets.  FEMA should offer to pay for the rip rapping of the ocean.  Sure it means less beaches, but once the seawalls are built, the beaches will come and go.  After all, beaches are always in transit.  It’s just in the last 100 years that civilization decided they’d try to tame Mother Nature.

There will always be plenty of beaches in Cape May County, but people will have to search them out.  Here today, gone tomorrow, but another beach pops up a mile away.  And certain beaches, like Wildwood, which is over 1,000 feet in depth, will always be there.

Like it or not, the days of FEMA beach handouts are numbered.  As they should be.

- Mountain Man

Tax Credits for Homebuyers

Monday, November 30th, 2009

The popular homebuyer tax credit program, which was due to expire November 30, 2009, has been extended to April 30, 2010.  Adding to the good news is the fact that it is no longer confined to just first-time homebuyers.

The rules are that the first-time homebuyer can not have had interest in a principal residence for three years prior to the purchase.  A current homeowner must have used their existing home as a principal residence for five of the previous eight years.  The first-timer gets an $8,000 credit ($4,000 if married filing separately), while the existing homebuyer gets a $6,500 credit ($3,250 if married filing separately).

All other provisions of the Tax Credit are the same for both first-time homebuyers and current owners.

The prospective property must be put “under contract” before May 1, 2010 and the transfer must take place by July 1, 2010.  The income limits are $125,000 for a single person and $225,000 for a married couple (up from $75,000 and $150,000) for a full tax credit.  A partial tax credit is given for $125,000 to $145,000 for singles and $225,000 to $245,000 for married couples.  Above those incomes is no tax credit.

The maximum price of the property being purchased is $800,000.  The property transfer can not be between dependents (parents and child or grandchild) and documentation of the purchase must be attached to the tax return.  Parents can still, however, co-sign on the mortgage and the child gets the tax credit.

All in all, the homebuyer tax credit is a good deal.  If only it was permanent.

- Mountain Man