Ted Ihde's Blog: Ted Ihde author of “Thinking About Becoming A Real Estate Developer?”, page 7
December 7, 2024
America’s 1st Commercial Bank
In 1781 Bank of North America opened its doors to the public for the first time in Philadelphia. Therein, we have the birth of the first commercial bank in the United States. Philadelphia’s Bank of North America.
The collective vision of two early American forefathers – Alexander Hamilton and Henry Morris – Bank of North America was initially intended to operate as a de-facto “central bank.” A bank that would contribute capital towards the financing of United States government operations.
In a twist, Bank of North America was established as a state chartered bank (chartered in Pennsylvania). Not as a commercial bank. And not being set up as a commercial bank, the “central bank” idea for Bank of North America never materialized.
The collective vision of two early American forefathers – Alexander Hamilton and Henry Morris – Bank of North America was initially intended to operate as a de-facto “central bank.” A bank that would contribute capital towards the financing of United States government operations.
In a twist, Bank of North America was established as a state chartered bank (chartered in Pennsylvania). Not as a commercial bank. And not being set up as a commercial bank, the “central bank” idea for Bank of North America never materialized.
A Fed rate cut…and mortgage rates went up
Mortgage rates are at their highest levels in two months. This, after the Federal Reserve cut the federal funds rate for the first time in four years.
The Federal Open Market Committee sets a target range for the federal funds rate. The federal funds rate? The federal funds rate is the interest rate banks pay on money they – as banks – borrow from other banks.
The Fed does not directly set mortgage rates.
The Fed influences mortgage rates. The Fed influences mortgage rates through the role the Fed plays in setting monetary policy. As such, the Fed indirectly affects the interest rates borrowers lock into at the consumer level, by way of how credit spreads evolve in the market as a result of the Fed’s actions. In relation to the issuance of debt instruments.
Credit spreads consist of the purchases of – and then the simultaneous sales of – contracts within the same asset classes. Credit spreads are not always so easy to predict. Then too, mortgage rates are not necessarily – nor definitively – so easy to predict, short term, either. Although the general direction mortgage rates will end up heading can rather accurately be predicted through actions taken by the Fed.
The Federal Open Market Committee sets a target range for the federal funds rate. The federal funds rate? The federal funds rate is the interest rate banks pay on money they – as banks – borrow from other banks.
The Fed does not directly set mortgage rates.
The Fed influences mortgage rates. The Fed influences mortgage rates through the role the Fed plays in setting monetary policy. As such, the Fed indirectly affects the interest rates borrowers lock into at the consumer level, by way of how credit spreads evolve in the market as a result of the Fed’s actions. In relation to the issuance of debt instruments.
Credit spreads consist of the purchases of – and then the simultaneous sales of – contracts within the same asset classes. Credit spreads are not always so easy to predict. Then too, mortgage rates are not necessarily – nor definitively – so easy to predict, short term, either. Although the general direction mortgage rates will end up heading can rather accurately be predicted through actions taken by the Fed.
Land banks in New York…it’s working
There are just about 4 million total residential homes in state of New York. So, with all of the upheaval in our real estate business today – the NAR settlement, changes to buyers agency compensation, high mortgage rates, increased competition, limited inventory…among all of the other “normal” business challenges in real estate – if one is looking for a unique real estate specialty to consider focusing their efforts upon, as we head into 2025, here is something to consider…
Thirteen years after New York’s Land Bank Law went into effect, there are still in excess of, somewhere in the neighborhood of, 40,000 vacant residential homes situated within municipalities throughout The Empire State.
Two general truths…
Truth “A”: a land bank has procedures available to the land bank which enable the land bank to acquire vacant and abandoned properties.
Truth “B”: Developers look for opportunities to acquire, then, to redevelop, properties.
Once redeveloped, and thus, in turn, once transitioned from its former status as a “non-performing” property to a new status – “performing” property – that property can be sold. Thus, returning what once had been a neighborhood liability to the community…coupled to a handsome, new classification: performing property. A community asset. A property which has now been added onto the municipality’s property tax roll.
As such, performing properties create newly-found property tax revenue for municipalities. Additional property tax revenue – now coming into the coffers of municipalities – ease budgetary constraints municipalities face.
Through New York’s Land Bank Law, in The Empire State, a New York municipality possesses the ability to create their own land bank. By establishing a land bank, resources, direction, vision, personnel – coupled to leveraged capital – enable New York redevelopment to take place. In essence, New York land banks create passageways whereby, as this passageway is followed, adverse conditions attributed to non-performing properties which are nestled, often times, for far too, too long, within New York State tax districts…are lessened.
The New York Land Bank Law was signed by Governor Cuomo on July 29,2011. New York’s first land bank was established the following year.. in 2012. Today, there are over 30 land banks in operation in New York State.
Here are some regional New York land bank statistics to think about. These are local land bank statistics…taken from the area of New York State where Josh Allen plays quarterback. And, albeit, as a KC Chiefs fan, I must say, he plays QB pretty darn excellently up there too:
A. 230 properties acquired
B. 44 renovations completed
C. $2.4 million in assessed Values returned to communities
D. $14 million in leveraged investment
Thirteen years after New York’s Land Bank Law went into effect, there are still in excess of, somewhere in the neighborhood of, 40,000 vacant residential homes situated within municipalities throughout The Empire State.
Two general truths…
Truth “A”: a land bank has procedures available to the land bank which enable the land bank to acquire vacant and abandoned properties.
Truth “B”: Developers look for opportunities to acquire, then, to redevelop, properties.
Once redeveloped, and thus, in turn, once transitioned from its former status as a “non-performing” property to a new status – “performing” property – that property can be sold. Thus, returning what once had been a neighborhood liability to the community…coupled to a handsome, new classification: performing property. A community asset. A property which has now been added onto the municipality’s property tax roll.
As such, performing properties create newly-found property tax revenue for municipalities. Additional property tax revenue – now coming into the coffers of municipalities – ease budgetary constraints municipalities face.
Through New York’s Land Bank Law, in The Empire State, a New York municipality possesses the ability to create their own land bank. By establishing a land bank, resources, direction, vision, personnel – coupled to leveraged capital – enable New York redevelopment to take place. In essence, New York land banks create passageways whereby, as this passageway is followed, adverse conditions attributed to non-performing properties which are nestled, often times, for far too, too long, within New York State tax districts…are lessened.
The New York Land Bank Law was signed by Governor Cuomo on July 29,2011. New York’s first land bank was established the following year.. in 2012. Today, there are over 30 land banks in operation in New York State.
Here are some regional New York land bank statistics to think about. These are local land bank statistics…taken from the area of New York State where Josh Allen plays quarterback. And, albeit, as a KC Chiefs fan, I must say, he plays QB pretty darn excellently up there too:
A. 230 properties acquired
B. 44 renovations completed
C. $2.4 million in assessed Values returned to communities
D. $14 million in leveraged investment
Colts Neck Township
The origin of Monmouth County’s Colts Neck Township goes all the way back to the late 17th Century. So let’s take a look at our 17th Century beginning for what we know today to be, Colts Neck Township.
The origin of Colts Neck Township…
In 1676, two Native Americans brokered a real estate sale. This was a land sale. The land sale totaled just under 1,200 acres. To be precise, it a 1,170-acre brokered land sale.
This acreage was sold to four Monmouth County locals. These four Monmouth County locals? Nathaniel Leonard, Thomas Leonard, Henry Leonard and Samuel Leonard.
Here is the breakdown for the Leonards’ 1.170-acre 17th Century Monmouth County land purchase – Henry Leonard acquired 450 of the 1,170 total acres. Samuel Leonard acquired 240 acres. Nathaniel Leonard acquired 120 acres. John Leonard acquired 120 acres. And Samuel Leonard acquired 120 acres. Here we have the original real estate sale for what would go on to become, Colts Neck Township.
Recorded in the minutes of the Board of Proprietors of the Eastern Division of New Jersey is one specific bill of sale which would be of interest to those who love Colts Neck. As well as to Monmouth County historians. This, the bill of sale for our aforementioned 17th Century “Colts Neck” land sale – the Leonards’ acquisition of these 1,170 acres in Monmouth County. Nearly 1,200 acres which would, in time, evolve into today’s Colts Neck Township.
The four Leonards acquired their land from two native Americans. The two Native American land sellers? The sellers of the 1,170 Monmouth County acres which would go on to become Colts Neck Township? Almeseke and Lamasand.
While the history of, How Colts Neck Township came to be…, goes all the way back to this brokered 17th Century real estate sale between the Leonards and Almeseke and Lamasand, it would be another two hundred years after this brokered land sale until Colts Neck Township officially became a New Jersey township. And from this point, it would be another one hundred years until the township name – Colts Neck Township – would become the official name for today’s Colts Neck Township.
As a township name, Colts Neck Township was officially adopted in 1962. Through a local referendum.
Prior to the aforementioned 1962 referendum – which gave Colts Neck Township its name – what is now Colts Neck was, at that time, Atlantic Township.
Atlantic Township?
In 1847, through an act which was carried out by the New Jersey legislature, Atlantic Township was established.
Atlantic Township, circa 1847 (formed by way of an act of the New Jersey legislature) would be renamed Colts Neck Township, circa 1962 (by way of a local referendum).
Through an act of the New Jersey legislature, Colts Neck Township – I.e.: Atlantic Township, at that time – was initially spun off from portions of three neighboring townships – Shrewsbury, Middletown and Freehold. There is a bit of irony to this 1847 legislative land spin off. This irony involves Shrewsbury.
At one time, Shrewsbury had been one of the largest sections of the land area which we would have, informally at that time – prior to any local referendums, prior to any acts carried out by the New Jersey legislature, and prior to any Township Act – called “Colts Neck.”
Through the New Jersey Township Act, Shrewsbury – as one contributor to the formal origin of what is today, Colts Neck Township– became a New Jersey township 49 years prior to Colts Neck’s appointment as a New Jersey township.
The origin of Colts Neck Township…
In 1676, two Native Americans brokered a real estate sale. This was a land sale. The land sale totaled just under 1,200 acres. To be precise, it a 1,170-acre brokered land sale.
This acreage was sold to four Monmouth County locals. These four Monmouth County locals? Nathaniel Leonard, Thomas Leonard, Henry Leonard and Samuel Leonard.
Here is the breakdown for the Leonards’ 1.170-acre 17th Century Monmouth County land purchase – Henry Leonard acquired 450 of the 1,170 total acres. Samuel Leonard acquired 240 acres. Nathaniel Leonard acquired 120 acres. John Leonard acquired 120 acres. And Samuel Leonard acquired 120 acres. Here we have the original real estate sale for what would go on to become, Colts Neck Township.
Recorded in the minutes of the Board of Proprietors of the Eastern Division of New Jersey is one specific bill of sale which would be of interest to those who love Colts Neck. As well as to Monmouth County historians. This, the bill of sale for our aforementioned 17th Century “Colts Neck” land sale – the Leonards’ acquisition of these 1,170 acres in Monmouth County. Nearly 1,200 acres which would, in time, evolve into today’s Colts Neck Township.
The four Leonards acquired their land from two native Americans. The two Native American land sellers? The sellers of the 1,170 Monmouth County acres which would go on to become Colts Neck Township? Almeseke and Lamasand.
While the history of, How Colts Neck Township came to be…, goes all the way back to this brokered 17th Century real estate sale between the Leonards and Almeseke and Lamasand, it would be another two hundred years after this brokered land sale until Colts Neck Township officially became a New Jersey township. And from this point, it would be another one hundred years until the township name – Colts Neck Township – would become the official name for today’s Colts Neck Township.
As a township name, Colts Neck Township was officially adopted in 1962. Through a local referendum.
Prior to the aforementioned 1962 referendum – which gave Colts Neck Township its name – what is now Colts Neck was, at that time, Atlantic Township.
Atlantic Township?
In 1847, through an act which was carried out by the New Jersey legislature, Atlantic Township was established.
Atlantic Township, circa 1847 (formed by way of an act of the New Jersey legislature) would be renamed Colts Neck Township, circa 1962 (by way of a local referendum).
Through an act of the New Jersey legislature, Colts Neck Township – I.e.: Atlantic Township, at that time – was initially spun off from portions of three neighboring townships – Shrewsbury, Middletown and Freehold. There is a bit of irony to this 1847 legislative land spin off. This irony involves Shrewsbury.
At one time, Shrewsbury had been one of the largest sections of the land area which we would have, informally at that time – prior to any local referendums, prior to any acts carried out by the New Jersey legislature, and prior to any Township Act – called “Colts Neck.”
Through the New Jersey Township Act, Shrewsbury – as one contributor to the formal origin of what is today, Colts Neck Township– became a New Jersey township 49 years prior to Colts Neck’s appointment as a New Jersey township.
Marlboro Township
The name – Marlboro Township – can be traced back to what had been a local discovery…a discovery which occurred, nearly three hundred years ago.
This local Marlboro discovery, then too, the utilization of what had been discovered nearly three-hundred years ago alongside what is now Marlboro Township, was a mineral. That mineral – emerging to go on to become quite important to the local agricultural industry – being this region’s marl.
Marl is a mineral which, by the late 18th century in New Jersey, was relied upon first, by local farmers who owned farms in what would go on to become Marlboro Township. Then, later, by farmers farming farmland situated throughout New Jersey. Then, later, by farmers farming farmland well beyond – and outside of – New Jersey.
In Monmouth County New Jersey, marl was discovered in 1768. East of where the township lines for what we now call Marlboro Township can be found. A true farmer’s ally, the functionality of marl as a mineral can be seen in how marl – composed of the remains of prehistoric fish – was able to be spread over topsoil of area farmland during the winter months. Then tilled into the farmland soil in the spring. Farmers, in what we now know to be Marlboro Township, came to rely upon marl as the means through which they could improve their soil’s fertility.
Marl is not exclusive to New Jersey, by any means. The recognized use of marl goes way, way, way back. To the 1st century.
Marl is a de-facto natural fertilizer. A natural fertilizer which had been found to exist in the grounds underneath Marlboro Township in the 18th Century. Long, long, long before the comeuppance of any commercial fertilizer industry in New Jersey would have been able to supply local New Jersey farmers with a finished fertilizer product which could be used for their farms.
Harvested in what would later go on to become Marlboro Township, the region’s marl – once the marl had been harvested – would go on to evolve as an industry. Later, to be transported by rail. On to nearby agricultural markets. New Jersey’s local discovery of marl established an industry early on for Marlboro Township.
By the mid-19th Century, the transportation of New Jersey marl was key to facilitating commerce. For the local harvesters of marl. For the local “exporters” of this marl. And for the farmers and the farms which came to rely upon – and use – marl as fertilizer.
To that effect – relating to marl, as a local industry…and to the transportation of marl as well – in 1853, the Freehold and Jamesburg Agricultural Railroad was founded in Jamesburg, New Jersey. Founded, primarily to facilitate the transportation – by rail – of this newly-identified regional mineral.
The Freehold and Jamesburg Agricultural Railroad operated along a 27-mile rail line. Connecting the locally-harvested marl – in what is now Marlboro Township – to nearby agricultural markets. Among them, Freehold, Jamesburg, Monroe, Manalapan and Englishtown.
This local Marlboro discovery, then too, the utilization of what had been discovered nearly three-hundred years ago alongside what is now Marlboro Township, was a mineral. That mineral – emerging to go on to become quite important to the local agricultural industry – being this region’s marl.
Marl is a mineral which, by the late 18th century in New Jersey, was relied upon first, by local farmers who owned farms in what would go on to become Marlboro Township. Then, later, by farmers farming farmland situated throughout New Jersey. Then, later, by farmers farming farmland well beyond – and outside of – New Jersey.
In Monmouth County New Jersey, marl was discovered in 1768. East of where the township lines for what we now call Marlboro Township can be found. A true farmer’s ally, the functionality of marl as a mineral can be seen in how marl – composed of the remains of prehistoric fish – was able to be spread over topsoil of area farmland during the winter months. Then tilled into the farmland soil in the spring. Farmers, in what we now know to be Marlboro Township, came to rely upon marl as the means through which they could improve their soil’s fertility.
Marl is not exclusive to New Jersey, by any means. The recognized use of marl goes way, way, way back. To the 1st century.
Marl is a de-facto natural fertilizer. A natural fertilizer which had been found to exist in the grounds underneath Marlboro Township in the 18th Century. Long, long, long before the comeuppance of any commercial fertilizer industry in New Jersey would have been able to supply local New Jersey farmers with a finished fertilizer product which could be used for their farms.
Harvested in what would later go on to become Marlboro Township, the region’s marl – once the marl had been harvested – would go on to evolve as an industry. Later, to be transported by rail. On to nearby agricultural markets. New Jersey’s local discovery of marl established an industry early on for Marlboro Township.
By the mid-19th Century, the transportation of New Jersey marl was key to facilitating commerce. For the local harvesters of marl. For the local “exporters” of this marl. And for the farmers and the farms which came to rely upon – and use – marl as fertilizer.
To that effect – relating to marl, as a local industry…and to the transportation of marl as well – in 1853, the Freehold and Jamesburg Agricultural Railroad was founded in Jamesburg, New Jersey. Founded, primarily to facilitate the transportation – by rail – of this newly-identified regional mineral.
The Freehold and Jamesburg Agricultural Railroad operated along a 27-mile rail line. Connecting the locally-harvested marl – in what is now Marlboro Township – to nearby agricultural markets. Among them, Freehold, Jamesburg, Monroe, Manalapan and Englishtown.
Redevelopment in “New Jersey’s Greenwich Village”…Red Bank
Nestled cozily in the heart of Red Bank, New Jersey, today, one will find The Galleria. The Galleria Red Bank. A quaint collection of offices, restaurants and boutiques. Found in “New Jersey’s Greenwich Village.” It took 10 years to build that Galleria…early in the Twentieth Century. And it wasn’t called The Galleria, at that time.
Between 1907 and 1917, The Galleria – originally known as The Eisner Building – was constructed with a specific endgame in mind. And that early Twentieth Century endgame for The Eisner Building was not thought up with similar planning to how The Galleria is utilized today.
The Galleria today? It’s a repurposed Red Bank centerpiece. Located where Bridge Avenue meets West Front Street. The original plan for The Galleria? For The Eisner Building? That original plan didn’t include any restaurants. Nor did that original plan include any retail outlets. Rather, that original plan for The Eisner Building was…textiles. A textile factory.
During World War I and World War II, The Eisner Building was a Red Bank stalwart…though not one which espoused trendy retail “DNA.” Rather, during both World Wars, The Eisner Building possessed quite a different industrial “DNA.” It functioned as a supply chain for American military equipment. Flight suits, military uniforms, gas masks. Wartime supplies. This was the original “DNA” for what is today The Galleria. The wartime purpose for The Eisner Building extended on through both World Wars. Manufacturing. Supplies for American soldiers. This was The Galleria – I.e.: then, The Eisner Building – in the early-to-mid Twentieth Century.
Today, there are eight retail outlets located in the once-a-textile-hub Galleria. Today, there are four restaurants located in the once-a-textile-hub Galleria. Buffalo wings, pizza, Thai food, Mexican food. All can be had today at The Galleria. No, you won’t find gas masks there…
Going back thirty years ago to when this transformation in Red Bank first took hold – in the early 1990’s – circumstances for The Galleria were quite different. At that time, The Galleria had not yet been redeveloped.
Today, there are five offices located in the once-a-textile-hub Galleria. That early Twentieth Century factory which long ago produced military uniforms, which once “majored” in textiles? That “DNA” has long since been repurposed. Redeveloped. Now “majoring” in office space. In restaurants. In retail.
In 2024, The Galleria is a 100,000 a square foot rustic multi-purpose retail center. One which owns a classic design. Situated on just about three acres. Complete with its own Farmers Market. A Farmer’s Market which begins each year on Mother’s Day…extending on through November.
While in 2024 The Galleria is most certainly a Monmouth County favorite among shoppers – not soldiers who are in need of supplies – The Galleria also serves as a Monmouth County example for what real estate redevelopment efforts can (and do) look like.
Between 1907 and 1917, The Galleria – originally known as The Eisner Building – was constructed with a specific endgame in mind. And that early Twentieth Century endgame for The Eisner Building was not thought up with similar planning to how The Galleria is utilized today.
The Galleria today? It’s a repurposed Red Bank centerpiece. Located where Bridge Avenue meets West Front Street. The original plan for The Galleria? For The Eisner Building? That original plan didn’t include any restaurants. Nor did that original plan include any retail outlets. Rather, that original plan for The Eisner Building was…textiles. A textile factory.
During World War I and World War II, The Eisner Building was a Red Bank stalwart…though not one which espoused trendy retail “DNA.” Rather, during both World Wars, The Eisner Building possessed quite a different industrial “DNA.” It functioned as a supply chain for American military equipment. Flight suits, military uniforms, gas masks. Wartime supplies. This was the original “DNA” for what is today The Galleria. The wartime purpose for The Eisner Building extended on through both World Wars. Manufacturing. Supplies for American soldiers. This was The Galleria – I.e.: then, The Eisner Building – in the early-to-mid Twentieth Century.
Today, there are eight retail outlets located in the once-a-textile-hub Galleria. Today, there are four restaurants located in the once-a-textile-hub Galleria. Buffalo wings, pizza, Thai food, Mexican food. All can be had today at The Galleria. No, you won’t find gas masks there…
Going back thirty years ago to when this transformation in Red Bank first took hold – in the early 1990’s – circumstances for The Galleria were quite different. At that time, The Galleria had not yet been redeveloped.
Today, there are five offices located in the once-a-textile-hub Galleria. That early Twentieth Century factory which long ago produced military uniforms, which once “majored” in textiles? That “DNA” has long since been repurposed. Redeveloped. Now “majoring” in office space. In restaurants. In retail.
In 2024, The Galleria is a 100,000 a square foot rustic multi-purpose retail center. One which owns a classic design. Situated on just about three acres. Complete with its own Farmers Market. A Farmer’s Market which begins each year on Mother’s Day…extending on through November.
While in 2024 The Galleria is most certainly a Monmouth County favorite among shoppers – not soldiers who are in need of supplies – The Galleria also serves as a Monmouth County example for what real estate redevelopment efforts can (and do) look like.
The council-manager form of local government
Since the 1920’s, Kansas City, Missouri has utilized the council-manager form of government. Phoenix is the largest American city which utilizes the council-manager form of government.
In a council-manager form of government, city council charts how the city functions. An analogy…
In a council-manager form of government, city council could be looked at as being comparable to a corporate board of directors. The council-manager form of government, through its construct, looks somewhat like corporate governance. Using the corporate analogy, a city manager would be the city’s “executive officer.” The city’s “CEO.” The city manager, which is an unelected position, is hired by the city.
The city manager works, in theory (ideally) outside of the scope of the political arena. The city manager executes policy. The city manager implements ordinances…ordinances passed by, using our corporate analogy once again, the city’s “board of directors.” The “board of directors” being…city council.
The city’s “CEO?” City manager. The city’s “board of directors?” City council.
Under the council-manager form of government, the mayor is an elected public official. Elected by voters.
The city manager operates behind the-scenes. Running the city’s day-to-day operations. The mayoral position is a more visible position. Interviews? Newspaper articles? Mayor.
As executive officer, the city manager is responsible for oversight of city departments. The city manager collaborates with the mayor – and with city council – to enact policy. City policy? That policy emanates from city council.
City planning? City programs? The city budget? These are responsibilities of the city manager.
The position of mayor is a political position. The city manager position is apolitical.
City managers are not out campaigning alongside candidates who are running for public office. The city manager does not publicly promote the interests of Democrats, nor of Republicans.
Campaigning? Part of what it takes to become mayor. Politics? Goes hand-in hand with winning an election and becoming mayor.
Photo ops? Fundraising? TV appearances? Mayor. The city manager may very well attend these events as well. Yet it will be the mayor – moreso than the city manager – who is more likely to show up and make an appearance.
In a council-manager form of government, city council charts how the city functions. An analogy…
In a council-manager form of government, city council could be looked at as being comparable to a corporate board of directors. The council-manager form of government, through its construct, looks somewhat like corporate governance. Using the corporate analogy, a city manager would be the city’s “executive officer.” The city’s “CEO.” The city manager, which is an unelected position, is hired by the city.
The city manager works, in theory (ideally) outside of the scope of the political arena. The city manager executes policy. The city manager implements ordinances…ordinances passed by, using our corporate analogy once again, the city’s “board of directors.” The “board of directors” being…city council.
The city’s “CEO?” City manager. The city’s “board of directors?” City council.
Under the council-manager form of government, the mayor is an elected public official. Elected by voters.
The city manager operates behind the-scenes. Running the city’s day-to-day operations. The mayoral position is a more visible position. Interviews? Newspaper articles? Mayor.
As executive officer, the city manager is responsible for oversight of city departments. The city manager collaborates with the mayor – and with city council – to enact policy. City policy? That policy emanates from city council.
City planning? City programs? The city budget? These are responsibilities of the city manager.
The position of mayor is a political position. The city manager position is apolitical.
City managers are not out campaigning alongside candidates who are running for public office. The city manager does not publicly promote the interests of Democrats, nor of Republicans.
Campaigning? Part of what it takes to become mayor. Politics? Goes hand-in hand with winning an election and becoming mayor.
Photo ops? Fundraising? TV appearances? Mayor. The city manager may very well attend these events as well. Yet it will be the mayor – moreso than the city manager – who is more likely to show up and make an appearance.
Density Bonus Programs
Density bonus programs are developer incentives. They function as “build catalysts.” Catalysts which make it worthwhile - and economically feasible - for developers to undertake the construction of inclusionary housing projects. In summary, a density bonus program permits an increase in allowed dwelling units per acre - DU/A.
Here is how a density bonus program works…
Density bonuses enable developers to build in excess of a site’s base zoning. In exchange for the municipality permitting a developer to build unit totals which exceed standard allowances, the developer is required to designate a set number of units built as income-restricted affordable housing.
Density bonus programs are enacted through local ordinances. Ordinances amend zoning codes. The process of having zoning codes amended accompanies the implementation of a density bonus program because standard zoning codes - prior to the codes being amended - would not authorize the developer’s proposed build, if not amended. The intended outcome? Construction of more affordable housing units.
Density bonus programs establish developer thresholds. Once the threshold is met by the developer, the developer qualifies for the density bonus.
Typically, density bonus programs allow for increases of between 10% and 20% over baseline permitted density. This, in exchange for the develop’s commitment to the provision of a pre-set number of affordable housing units.
Here is how a density bonus program works…
Density bonuses enable developers to build in excess of a site’s base zoning. In exchange for the municipality permitting a developer to build unit totals which exceed standard allowances, the developer is required to designate a set number of units built as income-restricted affordable housing.
Density bonus programs are enacted through local ordinances. Ordinances amend zoning codes. The process of having zoning codes amended accompanies the implementation of a density bonus program because standard zoning codes - prior to the codes being amended - would not authorize the developer’s proposed build, if not amended. The intended outcome? Construction of more affordable housing units.
Density bonus programs establish developer thresholds. Once the threshold is met by the developer, the developer qualifies for the density bonus.
Typically, density bonus programs allow for increases of between 10% and 20% over baseline permitted density. This, in exchange for the develop’s commitment to the provision of a pre-set number of affordable housing units.
Government intervention
Prior to the U.S. government’s entrance into the home loan business in the 1930’s – this coming as a result of FDR’s New Deal – savings and loan associations had, up until that point, provided the majority of the loans which were used to finance the acquisition of homes.
The Homeowners Refinancing Act and the Home Owners Loan Corporation Act were each passed in 1933…just as the Great Depression was devastating the finances of Americans. These two housing Acts? Extensions by the U.S. government into the private sector. One byproduct of FDR’s New Deal.
The Home Refinancing Act and the Home Owners Loan Corporation Act provided assistance to Americans who were in danger of losing their homes. Due to an inability to refinance their home loans. Thanks to the New Deal, Americans gained access to new refinancing opportunities. Which, should there have been no New Deal, would not have been in place. The government’s election to get more deeply involved in the home loan business during the Great Depression was a wise foray by the U.S. government into the private sector.
Rewind to 300 years before the New Deal. Rewind to the earliest days of settlers moving west into new territories of what would in time become the United States.
Whereas FDR’s New Deal took aim at stabilizing a teetering U.S. housing market during the Great Depression, for early settlers, there wasn’t a need for government assistance in regard to real estate. There were no government programs in place to assist early settlers. There was no U.S. government to provide such government assistance.
During the 17th Century, there were no American institutional resources – nor government programs – which could facilitate real estate transactions. Was there interest during the 17th Century in acquiring land? Yes. Was there a banking industry? Was there a mortgage industry? Were there government programs in place which could be relied upon to help finance real estate transactions? No. No. And…no.
During the 17th Century, land acquired by settlers who moved west…those land acquisitions would not be categorized as real estate sales. Nor was acquired land financed through the use of mortgages. No, in the 17th Century, those who aspired to own their own land in this vast, new territory ventured out west. They found a piece of land. They claimed the land. Land ownership without a deed. Without a mortgage. Without government oversight.
At that time, there was not a lot of “demand” for this land. Though the natives who long inhabited this land, pre-settlement, would beg to differ. There was no formal market established, through which land could be bought and sold. Nobody was entering into real estate contracts when they acquired their land. No sellers, as we would categorize sellers today. No buyers, as we would categorize buyers today.
Land acquisition – by way of financing the land acquired – was not the practice. Claiming unsettled land was the practice. No real estate contracts. No mortgages. No deeds. Interesting how, 300 years later, the U.S. government’s role in the home loan business would become so pronounced. So important. Interesting how the U.S. government evolved into a stakeholder in the business of financing real estate. This role for government occurred, largely, through FDR’s New Deal.
Government’s intervention in the home loan business? That was during the 1930’s. Government’s complete absence from the process of acquiring land? That would have been during the aforementioned 17th Century. How about vehicles used to finance the purchase of real estate, relevant to protections found within FDR’s New Deal? That would be banks.
Six years after Henry Duncan established the first savings bank in England in 1810, the first saving bank was organized in the United States. In Philadelphia. That bank was the Philadelphia Saving Fund Society – the very first American savings bank.
Philadelphia Saving Fund Society opened in Philadelphia in 1816…established by a group of investors headed by War of 1812 veteran – and Philadelphia native – Condy Raquet.
Bank takeovers, bank mergers, bank acquisitions… What once had been the Philadelphia Saving Fund Society is now part of Citizens Bank of Pennsylvania.
Whereas Philadelphia is home to the first American savings bank, Philadelphia is also home to the first commercial bank established in the United States.
Thirty-four years prior to the establishment of America’s first savings bank – Philadelphia Saving Fund Society, formed in 1816 – we have the first United States commercial bank. Also founded in Philadelphia. That year would be 1781. The bank? That bank was Bank of North America.
Bank of North America was the first chartered bank – the first commercial bank – organized in the United States. Bank of North America…the formation for which emanated from an idea shared by two early American forefathers. Those two forefathers? Alexander Hamilton and Henry Morris.
Hamilton and Morris set up their bank to function as an informal American central bank. Their idea for the bank being, to provide financing to the United States government. Though constructed with the goal for their bank to operate as a de-facto, unofficial United States central bank, Bank of North America instead became a traditional state chartered bank. Not the central bank it was envisioned to become. Bank of North America was never the government financing tool Hamilton and Morris envisioned the bank to be. Rather, Bank of North America provided home loans to Philadelphians.
Bank takeovers, bank mergers, bank acquisitions… Bank of North America is now part of Wells Fargo.
During the 1800’s, loans used by Americans to finance real estate were not mirror images of the loans Americans use to finance homes in 2024.
During the 19th Century, home loan payment schedules were much shorter. No 30-year amortization. No 15-year amortization. Rather, in the 19th Century, you’d likely have either a 5-year or a 6-year loan payment schedule. No 15-year amortization. No 30-year amortization.
During the 19th Century, balloon mortgages were common. With a 5-year mortgage or a 6-year mortgage, qualifying for the home loan was difficult. And, in many cases, those 5-year or 6-year mortgages were balloon mortgages.
19th Century balloon mortgages were often structured with interest-only payments. After the mortgagor made their payments for the five or six years, the loan would then “balloon.” Whereby, the mortgagor would at that time be required to pay off their loan in full.
Coupled to interest-only payments – with the balloon provision – 19th Century mortgages would oftentimes be accompanied by low loan-to-values. In the range of a 50% loan-to-value. With interest-only payments made for 5 or 6 years, loan payoffs for mortgagors after the 5 or 6 years would have remained at payoff amounts equal to 50% of the purchase price of the property. Not taking into account any potential property appreciation. No New Deal. No government assistance available. Difficult to pay off and/or refinance home loans at that time…
In the midst of the Great Depression, upwards of 40% of all home mortgages in the United States were in default. Hence, FDR’s New Deal…
No government regulation for those early land acquisitions out west. No government regulation when those home loans were interest-only, coupled to balloon provisions. Rationale behind some form of a “new deal”…maybe?
Through the FHA, longer loan terms became available. 20-year mortgages. 30-year mortgages. Amortized. Unlike earlier interest-only mortgages, through FDR’s government reach into the real estate sector, mortgagors would be paying down their home loan principal balances. Through each and every payment they made.
The 1934 National Housing Act was signed into law by President Franklin Delano Roosevelt on June 27, 1934. The 1934 National Housing Act fundamentally changed government’s role in housing.
The United States Housing Act of 1937 – the Wagner-Steagall Housing Act – established the Federal Housing Administration (the FHA). The FHA was created to handle mortgage insurance. Mortgage insurance allowed for amortized mortgages…coupled to regular monthly payments.
The Homeowners Refinancing Act and the Home Owners Loan Corporation Act were each passed in 1933…just as the Great Depression was devastating the finances of Americans. These two housing Acts? Extensions by the U.S. government into the private sector. One byproduct of FDR’s New Deal.
The Home Refinancing Act and the Home Owners Loan Corporation Act provided assistance to Americans who were in danger of losing their homes. Due to an inability to refinance their home loans. Thanks to the New Deal, Americans gained access to new refinancing opportunities. Which, should there have been no New Deal, would not have been in place. The government’s election to get more deeply involved in the home loan business during the Great Depression was a wise foray by the U.S. government into the private sector.
Rewind to 300 years before the New Deal. Rewind to the earliest days of settlers moving west into new territories of what would in time become the United States.
Whereas FDR’s New Deal took aim at stabilizing a teetering U.S. housing market during the Great Depression, for early settlers, there wasn’t a need for government assistance in regard to real estate. There were no government programs in place to assist early settlers. There was no U.S. government to provide such government assistance.
During the 17th Century, there were no American institutional resources – nor government programs – which could facilitate real estate transactions. Was there interest during the 17th Century in acquiring land? Yes. Was there a banking industry? Was there a mortgage industry? Were there government programs in place which could be relied upon to help finance real estate transactions? No. No. And…no.
During the 17th Century, land acquired by settlers who moved west…those land acquisitions would not be categorized as real estate sales. Nor was acquired land financed through the use of mortgages. No, in the 17th Century, those who aspired to own their own land in this vast, new territory ventured out west. They found a piece of land. They claimed the land. Land ownership without a deed. Without a mortgage. Without government oversight.
At that time, there was not a lot of “demand” for this land. Though the natives who long inhabited this land, pre-settlement, would beg to differ. There was no formal market established, through which land could be bought and sold. Nobody was entering into real estate contracts when they acquired their land. No sellers, as we would categorize sellers today. No buyers, as we would categorize buyers today.
Land acquisition – by way of financing the land acquired – was not the practice. Claiming unsettled land was the practice. No real estate contracts. No mortgages. No deeds. Interesting how, 300 years later, the U.S. government’s role in the home loan business would become so pronounced. So important. Interesting how the U.S. government evolved into a stakeholder in the business of financing real estate. This role for government occurred, largely, through FDR’s New Deal.
Government’s intervention in the home loan business? That was during the 1930’s. Government’s complete absence from the process of acquiring land? That would have been during the aforementioned 17th Century. How about vehicles used to finance the purchase of real estate, relevant to protections found within FDR’s New Deal? That would be banks.
Six years after Henry Duncan established the first savings bank in England in 1810, the first saving bank was organized in the United States. In Philadelphia. That bank was the Philadelphia Saving Fund Society – the very first American savings bank.
Philadelphia Saving Fund Society opened in Philadelphia in 1816…established by a group of investors headed by War of 1812 veteran – and Philadelphia native – Condy Raquet.
Bank takeovers, bank mergers, bank acquisitions… What once had been the Philadelphia Saving Fund Society is now part of Citizens Bank of Pennsylvania.
Whereas Philadelphia is home to the first American savings bank, Philadelphia is also home to the first commercial bank established in the United States.
Thirty-four years prior to the establishment of America’s first savings bank – Philadelphia Saving Fund Society, formed in 1816 – we have the first United States commercial bank. Also founded in Philadelphia. That year would be 1781. The bank? That bank was Bank of North America.
Bank of North America was the first chartered bank – the first commercial bank – organized in the United States. Bank of North America…the formation for which emanated from an idea shared by two early American forefathers. Those two forefathers? Alexander Hamilton and Henry Morris.
Hamilton and Morris set up their bank to function as an informal American central bank. Their idea for the bank being, to provide financing to the United States government. Though constructed with the goal for their bank to operate as a de-facto, unofficial United States central bank, Bank of North America instead became a traditional state chartered bank. Not the central bank it was envisioned to become. Bank of North America was never the government financing tool Hamilton and Morris envisioned the bank to be. Rather, Bank of North America provided home loans to Philadelphians.
Bank takeovers, bank mergers, bank acquisitions… Bank of North America is now part of Wells Fargo.
During the 1800’s, loans used by Americans to finance real estate were not mirror images of the loans Americans use to finance homes in 2024.
During the 19th Century, home loan payment schedules were much shorter. No 30-year amortization. No 15-year amortization. Rather, in the 19th Century, you’d likely have either a 5-year or a 6-year loan payment schedule. No 15-year amortization. No 30-year amortization.
During the 19th Century, balloon mortgages were common. With a 5-year mortgage or a 6-year mortgage, qualifying for the home loan was difficult. And, in many cases, those 5-year or 6-year mortgages were balloon mortgages.
19th Century balloon mortgages were often structured with interest-only payments. After the mortgagor made their payments for the five or six years, the loan would then “balloon.” Whereby, the mortgagor would at that time be required to pay off their loan in full.
Coupled to interest-only payments – with the balloon provision – 19th Century mortgages would oftentimes be accompanied by low loan-to-values. In the range of a 50% loan-to-value. With interest-only payments made for 5 or 6 years, loan payoffs for mortgagors after the 5 or 6 years would have remained at payoff amounts equal to 50% of the purchase price of the property. Not taking into account any potential property appreciation. No New Deal. No government assistance available. Difficult to pay off and/or refinance home loans at that time…
In the midst of the Great Depression, upwards of 40% of all home mortgages in the United States were in default. Hence, FDR’s New Deal…
No government regulation for those early land acquisitions out west. No government regulation when those home loans were interest-only, coupled to balloon provisions. Rationale behind some form of a “new deal”…maybe?
Through the FHA, longer loan terms became available. 20-year mortgages. 30-year mortgages. Amortized. Unlike earlier interest-only mortgages, through FDR’s government reach into the real estate sector, mortgagors would be paying down their home loan principal balances. Through each and every payment they made.
The 1934 National Housing Act was signed into law by President Franklin Delano Roosevelt on June 27, 1934. The 1934 National Housing Act fundamentally changed government’s role in housing.
The United States Housing Act of 1937 – the Wagner-Steagall Housing Act – established the Federal Housing Administration (the FHA). The FHA was created to handle mortgage insurance. Mortgage insurance allowed for amortized mortgages…coupled to regular monthly payments.
Homesteading, Kansas style
In 1873, Marquette, Kansas was settled.
Marquette is a charming Kansas town located in McPherson County. Marquette is home to the Kansas Motorcycle Museum.
By 1890, the population of Marquette was 367. Today, Marquette’s population is fewer than 1,000.
Marquette is one of a handful of Kansas municipalities where a future homeowner who chooses to relocate to Marquette could acquire a residential lot for their new home build through Kansas’s homesteading provision.
Residential lots in Marquette’s homesteading program have ranged from between 11,000 to 25,000 square feet.
Lincoln is a quaint Kansas town located in Lincoln County. Lincoln in home to Crispins Drug Store Museum.
Lincoln was settled in 1870. By 1880, Lincoln’s population was 400. In 2020, the population of Lincoln was fewer than 1,500.
In Lincoln, free land (with conditions) has been able to be conveyed to Kansas homesteaders through Lincoln’s homesteading program. The homesteaded land in Lincoln has been able to be conveyed with the condition that the homesteader builds – and lives in – a new single-family home on their homesteaded lot.
Residential lots in Lincoln’s homesteading program have ranged from between 14,000 to 35,000 square feet.
Homesteading in Marquette and Lincoln is accompanied by conditions homesteaders are required to meet.
In Lincoln, a homesteader is required to build – and live in – their new single-family home. Also, a new home built in Lincoln on a homesteaded lot is required to have a minimum of 1,300 square feet of living area.
Marquette is a charming Kansas town located in McPherson County. Marquette is home to the Kansas Motorcycle Museum.
By 1890, the population of Marquette was 367. Today, Marquette’s population is fewer than 1,000.
Marquette is one of a handful of Kansas municipalities where a future homeowner who chooses to relocate to Marquette could acquire a residential lot for their new home build through Kansas’s homesteading provision.
Residential lots in Marquette’s homesteading program have ranged from between 11,000 to 25,000 square feet.
Lincoln is a quaint Kansas town located in Lincoln County. Lincoln in home to Crispins Drug Store Museum.
Lincoln was settled in 1870. By 1880, Lincoln’s population was 400. In 2020, the population of Lincoln was fewer than 1,500.
In Lincoln, free land (with conditions) has been able to be conveyed to Kansas homesteaders through Lincoln’s homesteading program. The homesteaded land in Lincoln has been able to be conveyed with the condition that the homesteader builds – and lives in – a new single-family home on their homesteaded lot.
Residential lots in Lincoln’s homesteading program have ranged from between 14,000 to 35,000 square feet.
Homesteading in Marquette and Lincoln is accompanied by conditions homesteaders are required to meet.
In Lincoln, a homesteader is required to build – and live in – their new single-family home. Also, a new home built in Lincoln on a homesteaded lot is required to have a minimum of 1,300 square feet of living area.
Ted Ihde author of “Thinking About Becoming A Real Estate Developer?”
Today, a real estate developer and a licensed real estate broker, Ted graduated Summa Cum Laude from Bloomfield College.
- Ted Ihde's profile
- 1 follower
