This is a great example of why government is the problem, not the answer.
Yesterday I went on 2 pre-bid tours for a government agency which is going to rehab houses for resale. Both the houses are identical, 1400 square feet under air, about 4 years old and have been foreclosed. You could call these government flips quite accurately.
The specs call for both roofs to be completely replaced although there are no leaks and the roofs are in very good condition. Both water heaters are to be replaced even though both heat water and work fine. All appliances are to be replaced even though they look like new and work well. All toilets are to be replaced even though they look fine, work well and meet all current standards. The reason for all these unnecessary expenses? They told us that they wanted everything to be perfect for the new owners.
The kitchen cabinets and countertops are to be replaced and all the wire shelves in the closets have to be replaced because they might be dirty or sticky. (They aren’t.) In one house all the baseboards have to be replaced so they can be on top of the new tile. In the other house the baseboards can stay and the tile can butt to the baseboards. (Different supervisors) In one house the nice laminated wood floor in one bedroom has to come up so cheap carpet can go down. The nice aluminum gutter on both houses has to come down to be replaced with the exact same aluminum gutter.
I agree that they both need painting, carpet in the bedrooms, some window repairs and a few other miscellaneous repairs. If I were flipping these houses with my own money I believe I could do both for about $15,000.00 and have a nice house even if I could sell it. The government agency is going to drop at least $50,000.00, maybe more of taxpayer money just because they can. We were told that this was just the start and that they planned to buy 75 to 100 more houses in the next few months alone and that this is a national project funded by the federal government.
They paid $58,000 for each of these houses last month in an area where you can buy a brand new comparable house for $50,000 or less. By the time they are done the taxpayers will have about $85,000 in each house which, due to declining values, will probably then be worth about $40,000 each. They are going to sell the houses and make low interest loans to the same group of low income people who couldn’t afford the houses in the first place. The purchase price will be the same $85,000.00 so the poor saps who buy them will be underwater by $45,000 the day they move in but they’ll have a low interest rate.
This is a great example of how government money makes prostitutes of us all. The three agency employees fed us the Kool Aid with straight faces because without these rehabs they might be out of a job. None of the 25 contractors there said a word because it might be a much needed job, to heck with ethics. And of course even as mad as I am about this I’ve already started my rationalizing, “I may as well bid because the houses are going to be rehabbed no matter what so I may as well try to get my slice of the pie.”
This is what the road to hell looks like
Replies
There are numerous taxpayer "watchdog" groups who would probably love to raise hell about something like this, but getting them involved might just shut the whole program down while everyone argues about it.
And that would be a bad thing???
I agree, but shutting it down would be a wonderful thing.
You can talk the talk or walk the walk.
Want no part of it then don't do it.
Be part of the problem or part of the solution.
Want to bitch abut govt. spending and waste , then don't take the jobs that involve that.
It all comes down to personal responsibility.
Ya, put yer dog behind a fence.
be uh-oh!
Yeah, you be right. Just get tired of the rants about govt. waste and then hear that the rationalizations are starting or the great deals that are scored as a result.
They can't get your Goat if you don't tell them where it is hidden.
heh, I didn't mean it that way but it's all good anyhow. snorK*
This house I'm working on now had an appraiser over to get a realistic price for the next RE taxes.
In town there is a huge old corner building The Elk's Club just sold to a doc from Cleveland who is planning on changing it back to a house.
On the side street side next to the Elk's building is a fairly plainjane white guessing 1920's old two story with attic and basement, aluminum siding, vinyl windows, fairly ok house.
I'd eyeballed the foundation when I'd heard it sold for $25,000 and it was tight. Need a roof in a few years about the only prob on the place.
So I mention the deal on the Elk's Club building and the fact the white place right next to it just sold for the 25 as was heard on the street.
The appraiser said he had just looked that property up and went thru the papers on his clipboard.
Word on the street was wrong because the bank had taken it back from someone and had sold it for $13,500 instead.
Man, housing prices have gone cheap cheap around here.
Is this a city or a small town???
Well I was born in a small townAnd I live in a small townProb'ly die in a small townOh, those small communitiesAll my friends are so small townMy parents live in the same small townMy job is so small townProvides little opportunityEducated in a small townTaught the fear of Jesus in a small townUsed to daydream in that small townAnother boring romantic that's me
Edited 5/14/2009 10:03 pm ET by rez
Want to bitch abut govt. spending and waste , then don't take the jobs that involve that.
One persons boycott will not solve the problem.
It all comes down to personal responsibility.
I think that it starts with personal responsibilty, but snowballs with a wastefull government.
I would compare it to tilting windmills to fight against most government spending, but I'm still going to let my voice be heard.
And that will make them all go away somehow? If I don't bid the houses won't be rehabbed? My dilemma of whether to bid or not is the point of the whole post. Apparently it was too subtle for you.
Why don't you tell us the solution?
First off, my apologies.
I can only tell you my solution. I refuse to engage in any work that I think contains that kind waste and funding.
Pretty simple to me, I don't like what I see I will let others profit if they want.
I don't care what others do to square themselves with the waste, I care what I do.
Just tired of the whine and then the belly up to the the trough. No it wasn't to subtle, it was a rant against waste followed by a comment about how your rationalization process has started.
So stop the rationalizing. May not seem like much ,just one person, but if enough people do it it does has an effect.
They can't get your Goat if you don't tell them where it is hidden.
I hear what you're saying and from a moral standpoint I totally agree. But that's my struggle.
In 1974 during the gas crisis I took the moral high ground. I had to look for a long time but I finally found and bought a 1974 Ford Econoline van because I thought I should do my part. It had a small 6 cylinder engine, stick shift and no air and I drove it for the next 7 years. 7 years of shifting gears with sweat pouring off me while all around me everyone else cruised along in their air conditioned cars. I finally realized that patting myself on the back for my goodness wasn't much compensation for not having A/C after a day in the sun. My sacrifice made no difference at all. Same situation now. Me not bidding won't make any difference except to make me feel like I've done something. No one else will know, my employees will have no work, etc., and the houses will still be rehabbed, the money spent. The whole situation makes me sick.
I don't think you have to apologize for doing an honest days work. The client is always right. If they want the roof torn off and replaced, then tear it off and go a great job laying the new one.
I wouldn't listen to anyone that is accusing you of "feeding" at the trough when in fact you are simply providing an honest day's work. You aren't the one making the decisions. Its different if you are trying to scam the government but nothing in your post indicated that.
""You aren't the one making the decisions. "" So much for personal responsibility.
If he isn't making the decisions in his life who is?
They can't get your Goat if you don't tell them where it is hidden.
If you really feel like the Government is wasting money here, then taking the moral high ground is not refusing to bid - it's actively trying to convince the officials in charge that they are spending wastefully.Here's something to keep in mind, since this is almost certainly a price-alone selection process, i.e., low bid wins. Other than perhaps checking for basic qualifications and licenses, the Government is not going to evaluate your quality, experience, etc. It's just price. So, keeping that in mind, I would go ahead and raise a stink. Go ahead and ask questions. Point out the obvious - why is this money being wasted? And then, if you still feel like it, submit your bid anyway. They can't discriminate against your bid simply because you asked questions and make a nuisance of yourself.My guess is this program has been given X dollars of money to spend, to pump into the local economy, and no one at the agency is particularly concerned with how to spend it. Perhaps the agency only have two houses to work with, and X dollars, so they have no choice but to spend it all (or return the money so it gets used in another community). It's also possible that the project managers aren't very experienced, and don't know how to truly diagnose a house and fix its problems. They might appreciate some education, if it's delivered in the right way. Instead of tearing down their scope of work, try and offer alternatives that would truly boost the value of the house (and then tell them why the roofs are fine).
Agreed.
They obviously have already made the decision that the money will be spent so there's no point boycotting that.
A better way to protest would be to contact the local and state reps.
You need to go back and read my original post. This isn't a local program, it's Federal money and involves every state. There aren't 2 houses, there will be hundreds, maybe thousands in my area alone. The project managers are all experienced building contractors who work for an agency whose sole job is rehabbing houses. My guess would be that you've never had occasion to work with the government before. It's like an out-of-body experience.
I believe you have actually defined the problem well. They had to make a "one size fits all" decision because the government has little latitude to make individual decisions about things.
They came out with a punch list for every house they are rehabbing, in the appropriations bill and they probably have little flexibility to change it because it is basically a law now. (HR 1 if I had to make a wild guess)
I expect you're right but I hope I can still change their minds.
I agree. I always try to talk clients out of stupid work and usually succeed but sometimes they want to do it anyway. At least then I feel like I've said my piece and they know their options. Not so in this case since they want me to do stupid work with my money and yours. I've decided to go ahead and bid. With 25 bidders I doubt I'll have a chance but if I do at least I'll have some chance on getting them to make more rational decisions with our tax money.
you can buy a brand new comparable house for $50,000 or less.
New construction for $37 a foot?
Do they get a lot with the house too?
Where?
Joe H
Lehigh Acres, right outside Fort Myers, Florida. Note that I didn't say you could build them for that but you can buy them all day. I have one that cost me about $100.00 a sf to build including the lot. It's 3 years old now and for sale for $30.00 a sf. The house is for sale for less than the fill dirt on the lot cost me.
Edited 5/14/2009 4:41 pm ET by florida
Well, it does sound stupid,but that's what bailouts do, put money back into the economy.
You get the job, you make money, the guys that work for you make money,and that means you spend money and so do your guys.
Lumber yards,suppliers, all the related trades make and spend money.
Some unnecessary work gets done,no question and maybe it should be watched more closely so there isn't to much abuse but getting people back to work and spending is what it's all about.
Vince Carbone
Riverside Builders
Franklin,NY
No, it doesn't put money back into the economy. The money is coming out of our pockets. If we have to pay more taxes to support inefficient programs like this then WE don't have the money to spend. There is no net increase in money, it's actually less since it has to pass through the government filters which extract their toll. The only way this could help the economy is if the money fell out of the sky and that would cause inflation.
But, if you really believe it will help send me $100.00 and I'll give someone a job for a day.
Too bad about your spec, at least you haven't lost it yet.
This is government at it's finest, siphoning off a good share for themselves and wasting what's left.
Heard somewhere yesterday the average Federal gov employee salary is about $75,000.
And they're hiring.
Only stipulation is you join the union and your union dues go to Dem campaign coffers.
Joe H
And there are people who want the government to take over more!
Florida
How can you say,
you know what, it's not worth the effort ,your mind is closed already to any thought but your own. Vince Carbone
Riverside Builders
Franklin,NY
My mind is closed? That's like saying my mind is closed to the possibility that 2 and 2 make 5. If I take your money in taxes then you don't have the money to spend do you? If the government takes the $100.00 you were going to spend on new tires and spends it on buying widgets there is no increase in the number of jobs or money. The tire store makes no sale, the tire store employees earn no salary, the employees can't buy shoes from the shoe store and on down the line. It's true that the widget company makes a sale and it's employees earn a salary and buy shoes but that may be happening 1000 miles from where you are and it's happening with after tax dollars which won't equal the $100.00 you paid.
This perhaps is more work than you'd like to put into making a bid...but could you put in two bids? One with their scope of work and one with a reduced scope of work based upon what you feel is actually necessary. You could include an explanation for why you are reducing the scope (gutters are 4 years old, appear to have x years of life remaining, etc). That way, if they end up shopping based upon price, perhaps you are a shoe in.
*edited to add* I also believe that even a bid you don't get (or want) is an opportunity to sell yourself on some potential future project. Perhaps the taking an honest approach to the work that actually is required will result in someone contactin gyou in the future. *end edit*
Edited 5/14/2009 12:04 pm by Jen
That would be nice but it would just get tossed in the circular file.
Although I'm hesitant to say anything remotely political outside of the tavern i believe Prez Obama said he has a site to report Gov waste and if you see any its your duty to make your reports!!!!!.
There's a program like that here, only it deals with much older homes in impoverished, high density areas. It has to be subsidized because the repairs cost more than the final worth of the house. Similar low-interest loans to the buyers on top of it.
Sounds like they took that same model and blindly broadened it to include new foreclosures. Knowing such programs, there's often little incentive, knowledge or flexibility on the part of those in charge to adapt it for another alternative.
Personally I think any house that goes over on taxes or code liens to the government should just be torn down if they are not at current code.
It would be stupid bordering on criminal for the government to sell a non-code conforming house. This is really a huge issue in Florida where the code is tested every summer.
The land should be held as green space. Maybe you would lease it back to a non-profit neighborhood group to use as a playground or garden. In real combat zones you could park a police trailer/RV on it as a neighborhood policing unit.
We are so overstocked in houses that are owner ready, it is silly paying to fix up "teardowns". The tax base would actually improve if housing prices recovered to reasonable prices and that will not happen with an overstock of homes for sale. Losing money on a renovation is just stupid.
Youngstown is an example of this (tearing down homes for green spaces). Former steel city, but that industry moved on years ago. The city finally accepted that they'd never be as big as they once were, and decided to focus on being smaller and more sustainable. But it took a lot of soul searching . . . something governments aren't wont to do. Plus, all the green spaces need maintenance, funded by the city. Maintenance that's an easy target during budget cuts and isn't provided when there's an existing building on the lot, regardless of condition.
And getting neighborhood commissions to take over lots is often easier said than done. Too often such good intentions eventually fail from inner squabbling, lack of leadership, funding issues, etc.. Some communities turn old homes into art projects (Detroit has a group that paints such homes a fluorescent orange color, like a giant traffic cone). But that's usually temporary, has liability issues, and the original problem of what to do returns.
Definitely an issue. Unfortunately, each solution seems to create another problem someone else doesn't want to deal with.
Its hard to believe what you are saying. But then, when I think of other government programs, it all kinda makes sense. This is the same type nonsense that brought the soviet union down and we are paddling up that same stream.
Just wait till your doctors are running the hospitals like this.
It really hard to believe. Only a bureaucrat could think of something this appallingly stupid and then carry it through with a straight face.
To make it worse this is a group that prides itself on being green but has no issue with tearing off good roofs and dumping them in a landfill.
Another issue is their desire to help low income families. If they didn't needlessly tear the roofs off they would save $7,000.00 a house which would mean that they could buy more houses and help more people.
When i gave roof inspections we only needed to say a roof would make it 3 to 5 years to pass the rules,
But back then a 20 year comp roof was only good for 10 to 12 years so time was already gone.
Then looking at the liability of saying a roof is still good and it fails it was just not worth it.
The real estate people just got nimrods to pass anything to make the sale fast.
So i can see why they want new roofs unless there very recent, Maybe my own roof i can babysit for years but why should the Gov or anyone else take a risk on passing a house off to someone else on a iffy thing.