What’s the simplest way to save our planet? According to one prominent urban economist, “ … if you want to be good to the environment, stay away from it. Move to high-rise apartments surrounded by plenty of concrete.”

So says Harvard professor Edward L Glaeser in a column published in City Journal magazine.

“When environmentalists resist new construction in their dense but environmentally friendly cities, they inadvertently ensure that it will take place somewhere else—somewhere with higher carbon emissions. Much local environmentalism, in short, is bad for the environment.”

The professor analyzed carbon emissions from four different sources: home heating (fuel oil and natural gas); electricity; driving; and public transportation and found that, in almost every metropolitan area, “carbon emissions are significantly lower for people who live in central cities than for people who live in suburbs.”

His solution, using New York City as an example?

“[L]imiting the height or growth of New York City skyscrapers incurs environmental costs. Building more apartments in Gotham will not only make the city more affordable; it will also reduce global warming.

[Henry David] Thoreau was wrong. Living in the country is not the right way to care for the Earth. The best thing that we can do for the planet is build more skyscrapers.“

Lost in all the news coming out of the government about stimulus and bail-out plans is a proposal by the Federal Reserve Bank of Boston to assist homeowners who lose their jobs.

According to an article on Forbes.com:

Under the Boston Fed plan, taxpayers would cover between a quarter and a half of mortgages for homeowners who lose their jobs. The aid would last up to two years or until new employment was secured, whichever comes first. This ad hoc national unemployment insurance would cost $50.0 billion, assuming that 3.5 million homeowners got in on it.

There are several good parts to this plan. Those who are helped are in need of assistance because of a loss of income, not because they took out risky loans, or borrowed too much (well, some may have, but ignore that). Also, there is no risk to taxpayers beyond the money set aside to help - no future obligations on the part of the government.

There are no loan modifications or loan forgiveness, so banks don’t need to get involved.

The goal would be to ease the financial crisis for a large number of people, while keeping them in their homes and keeping money flowing between borrowers and lenders.

The program would only be available to people whose household incomes drop at least 25% due to the job losses.

Source: America’s New Housing Problem: Unemployment - By Maurna Desmond, Forbes.com

Details: FRB Payment Sharing Proposal (warning, pdf)

One of the big benefits of owning a home and living in Boston is a property tax credit you receive each year - it’s called the “residential exemption”.

This past year, lucky homeowners collected $1,325 each. Landlords, and others who own properties in the city but don’t occupy them, miss out on the rebate; so do renters.

If you think about the program long enough, however, you start to see some holes in it. You might start to wonder, would my property taxes actually be less, if there was no residential exemption? And, is the tax burden being spread equitably?

The math isn’t that hard, but it does take a bit of time to work it all out on paper.

The city of Boston collected $610 million in residential property tax revenues, last year. Then, because of the resident exemption, it rebated $103 million to approximately 80,000 owner-occupants who filed the necessary paperwork.

The result is, the city ended up with $507 million in property tax revenues.

The question is, what would have happened to your property tax bill if, instead of charging the higher amount and giving you a rebate, it had simply charged the lower amount. The city would still collect $507 million in tax revenue, but what would happen to your own tax bill?

Let’s take a hypothetical example.

Suppose you own a home assessed at $400,000 (condo or single-family, it doesn’t matter which)
@ the current property tax rate of $10.63, you would owe $4,252.

Subtract the $1,375 residential exemption and your final tax bill would be $2,877.

Now, based on data I pulled from the city of Boston’s website, I’ve calculated that the property tax rate would drop from $10.63 to $8.84 if the city got rid of the residential exemption.

So, suppose you own a home assessed at $400,000
@ an estimated property tax rate of $8.84, you would owe $3,532.

Your property tax bill would go up $645.

But, for those owning homes worth more, they are actually penalized by the residential exemption program.

Supposed you owned a home assessed at $800,000
@ the current property tax rate of $10.63, you would owe $8,504.

Subtract the $1,375 residential exemption and your final property tax bill would be $7,129.

However, if we get rid of the exemption and lower the tax rate:

Suppose you owned a home assessed at $800,000
@ an estimated property tax rate of $8.84, you would owe $7,072.

Almost equal.

In fact, any homeowner with a property assessed at more than $800,000 is penalized by the residential exemption program. (As are landlords, who then pass on the higher tax burden to their tenants in the form of higher rents.).

A million-dollar homeowner pays $415 more because of the residential exemption.

So, basically, we have a graduated property tax, no? (Oh, and by the way, aren’t graduated taxes illegal in Massachusetts?)

Now, some people might think it’s unfair that the tax burden is uneven. Others, the majority maybe, feel it’s okay that, if you make more (or are worth more, at least) then you should pay more.

However, the argument has been made (elsewhere) that the entire program is regressive, not progressive, and that those at the lower-end of the market are hurt more than those at the upper end. Basically, because the residential exemption inflates home prices. I’ll save you the details, but you can find out all about it on the Universal Hub.

More analysis is needed. Surely, there would be winners and losers if the program was changed or eliminated, but perhaps a more equitable plan could be figured out if we put our minds to it.

Think things are “tough all over”?

Not quite.

While average home price nationwide dropped 11% in 2008, some homeowners saw the values of their properties go up, not down.

According to First American CoreLogic Inc., the 11 cities with the highest home price appreciation in 2008 are:

1. Cedar Rapids, Iowa: 8.83 percent
2. Binghamton, N.Y.: 7.78 percent
3. Amsterdam, N.Y.: 7.89 percent
4. Malone, N.Y.: 7.60 percent
5. Bay City, Mich.: 6.87 percent
6. College Station-Bryan: 6.78 percent
7. Rocky Mount, N.C.: 6.69 percent
8. Auburn, N.Y.: 6.51 percent
9. Lebanon, Pa.: 6.41 percent
10. Elmira, N.Y.: 6.28 percent
11. Johnstown, Pa.: 6.20 percent

Source: First American CoreLogic Inc., by way of Realtor.org

Believe it or not, people are still buying homes, these days.

And, for those that do, they are getting really good interest rates.

According to Freddie Mac, the average home loan interest rate last week dropped to 5.04% from 5.16%, the previous week.

The average rate was 6.04%, one year ago.

That’s almost a $200 monthly savings on a $300,000 home loan.

Source: Freddie Mac

One thing I’ve always been interested in is home automation systems. Over the years, I’ve tried out several X10 software programs on my Windows-based personal computers, but I found them clunky because you had to always go back to the main computer to make changes. I hacked a bunch of 3Com Audrey computers, a couple years ago. These were great little touch-screen computers that you could network together to play music and access the internet. But, because 3Com discontinued the models, support was extremely limited and the software upgrades non-existent.

Today, I found out about a cool program that brings automation control to your entire house. It’s a bit more-involved than a simple X10 switch and a couple of batteries, but sounds as though it will do just about anything you could think of.

Savant Systems designs, develops and manufactures a complete suite of integrated solutions that deliver home automation and control, multi-room audio/video, advanced digital audio and video processing, and an array of integrated applications and services.

Savant’s home automation platform (called ROSIE) is a combination of innovative hardware and software components built upon Apple Computer’s Mac OSX.

Savant’s suite of products require professional installation - it’s not a simple software download that you could easily drop into an existing Apple computer to automate your home.

Savant sets up your Apple computer so that it can access features and functions on their ROSIE system, and because Savant’s products are Apple based, iTunes is native and can be enjoyed and controlled from virtually anywhere in the home. There is also a full-featured iPhone/iPod touch application that enables amazingly intuitive control of automation functionality from Apple’s portable devices.

More information: Savant Systems LLC

So, what do Boston Herald readers think? Will the Fed’s stimulus program work? Will it stop the jump in job losses? Will it lead to stable home prices? Do average Americans have any faith in our leaders?

Do you wish home prices would go down, even more? Do you feel the government’s plans will stabilize housing at inflated prices?

What are your plans for this year? Buying a home? Selling your home? Going into foreclosure? (I hear the Feds will help bail you out.) Moving out of Massachusetts?

How do you feel about the state’s plans for higher gas taxes?

If you were in charge, what would you do to make everything better?

And don’t take the easy way out, don’t just suggest cutting state payroll by 20%.

Give it some hard thought, come up with some good suggestions / solutions, and leave a comment. Or, two.

Every time a developer builds a condominium project in Boston, it has to include a certain number of “affordable housing” units. For the lucky few who qualify for these units, they hit what is both figuratively and literally, the “lottery”.

The big game is about to pay off again for one new owner in the luxury Willowbank project on the edge of Jamaica Pond, in Boston’s Jamaica Plain neighborhood.

The Boston Redevelopment Authority has announced that the developer is now accepting applications from potential buyers for a single one-bedroom unit.

To qualify, the buyer can make up to 80% of the city’s median income, which breaks down to:

$48,050.00 for one person
$54,900.00 for two people
$61,800.00 for three people
$68,650.00 for four people

Other homes in the development were sold for between $1,175,000 to $1,550,000. These three and four bedroom residences, according to the sales literature, offered “unique design features and floor plans … ranging in size from 2,200 to 2,800 square feet of living space and 2.5 or 3.5 baths, all in a private, estate setting.”

Further:

The units offer grandly proportioned layouts, lofty ceilings and vast windows. They feature a timeless architectural design blended with contemporary details: artisan crafted woods, vaulted, barrel and cathedral ceilings, fireplaces, custom cabinetry, gourmet stainless steel and granite kitchens with professional grade appliances, lavish master bedroom suites, opulent five-piece marble baths, central air-conditioning and vacuuming, patios, gardens, porches and decks, partially finished basements and garages. All units are pre-wired for security and multimedia systems as well as options for home automation and lighting control.

There’s no information on whether or not the affordable unit comes with all these amenities, but then again, you won’t have to pay over a million dollars to live at Willowbank.

Your purchase price, if you qualify? $189,600.

Details on the lottery on the BRA’s website.

Earlier: Low-cost units in luxury tower - By Thomas Grillo, The Boston Herald

- Photo courtesy Willowbank

Encouraging news for anyone thinking of buying a home this spring. Mortgage loan rates dropped to an average of 5.34%, this past week, according to Bankrate.com.

The survey of lenders nationwide was taken prior to the US Congress’s approved the President’s stimulus plan, but after Treasury Secretary Tim Geithner outlined (sketchily) the federal government’s plan for buying back assets from troubled banks and addressing the foreclosure crisis.

Rates were as high as 6.1% during the past six months. A homebuyer purchasing a $300,000 loan today would save approximately $145 per month.

Of course, the average home price has gone down since last year, as well. A double win!