Burch pushes for time for Southwest 6/7 residents; Outlines two-year deferment plan
Cape Coral City Councilmember Jim Burch wants the city to call a timeout for some 6,200 Southwest 6/7 residents each facing $17,000 in assessments and fees for the utilities expansion project.
In a memo to City Manager Terry Stewart earlier this week, Burch pushed for a two-year period of deferred, no-interest payments. This would allow 6/7 residents who would rather not be included in the utilities program time for the housing market to turn around and sell their home, Burch argues.
“I do believe many unsuspecting people bought their primary residence without knowing that a speculator driven market was about to cast a net of economic uncertainty on this City as well as the rest of the Nation,” Burch’s memo reads in part.
The plan would be offered in addition to the 10-year deferred payment plan currently offered. A market interest rate is charged in that plan, and the current rate is 6.5 percent.
“It is clearly to buy some time for people so they don’t have to go into their pockets for anything,” Burch said.
In his memo, Burch lays out a plan to offer 6/7 residents one year of interest-free deferments, with an option of another year depending on the status of the housing market.
While the number of local home sales has increased in recent months, the median price has dropped significantly.
There were 684 homes sold in the Cape Coral-Fort Myers metro area in August, compared to 520 in August 2007, according to the Florida Association of Realtors. The median sales price, however, fell more than 41 percent, from $250,800 in August 2007 to $146,900 during the same month this year.
This has left homeowners in 6/7 in an unrealistic housing market, Burch said.
The two-year deferment plan is a chance to “give the market a couple of years to stabilize and get back to a true market value,” Burch said.
Councilmember Tim Day said he supports the idea.
“I really do think in a few years things will start to turn around,” Day said.
Not everyone is on board, however, with Councilmember Bill Deile saying he would not support the idea unless those who opted for the two-year deferment incurred the cost of the loss of revenue caused by the deferments.
Since it is not known how many residents would select the two-year deferment, the exact amount of that burden is not known.
“Then the other people that didn’t select the deferment would be penalized,” Deile said.
He also does not agree with Burch’s claim that residents of other areas targeted for utilities expansion — namely the Southwest 4 sector where work on utilities began in 2005 and where Deile owns property — had an opportunity to sell their home before paying assessments.
“To say if you were in 4, you could’ve sold your house, I think, is spurious reasoning,” Deile said.
Deile is currently suing the city over what he considers his overpriced assessment in Southwest 4. His property was assessed at $35,000, whereas the average total cost for assessments and fees for the area was $20,000.
Burch said the city can absorb the cost of deferring the payments better than the residents.
“What happens is the city is going to have to pick that tab up,” Burch said.