Paying Too Much For A Good Thing: THE EXPENSE OF Lower Taxes


Paying Too Much For A Good Thing: THE EXPENSE OF Lower Taxes

Since 2006, the city of Detroit has used the Neighborhood Enterprise Zone (NEZ) Homestead program to attract homebuyers, providing them with significant taxes incentives to buy and maintain homes in designated zones. By offering beneficiaries a 50 percent reduction in city and county operating millage rates for 15 years, the NEZ program has encouraged new home purchases and built more powerful neighborhoods successfully. But has it made good financial sense for all those homebuyers?

Not always, says Timothy Hodge, Ph.D., assistant teacher of economics at the Oakland UniversitySchool of Business Administration. In a fresh research paper, Dr. Hodge discovered that NEZ homebuyers often pay too much for a very important thing. “I needed to learn how much people understood about the property tax incentives and how much they were willing to pay for them,” says Dr. Hodge.

Instead, Dr. Hodge’s analysis showed that NEZ home prices were ten percent higher than in neighborhoods outside the zones. Buyers who took advantage of the tax incentives paid yet another 29 percent because of their properties, totaling 39 percent all together. Dr. Hodge also found that, while buyers were paying top dollar in NEZ neighborhoods, many didn’t receive the tax breaks they wanted.

“Only about 2 percent of the homebuyers inside our test were actually benefiting from the program,” he clarifies. “They may never have applied for the bonuses or weren’t granted the huge benefits following the purchase,” says Dr. Hodge. “Others may have misunderstood the scheduled program.” To qualify, residents had to meet an easy range of criteria, including buying home improvements and staying current on their property taxes. The overcapitalization of NEZ homes may be considered a bitter tablet for customers, but it has been a positive for the city itself. Lower taxes on higher-priced homes results in increased revenue still. In the foreseeable future, though, prospective buyers might take a closer look at the NEZ small print before signing on underneath line. Hodge, T., & Komarek, T.M.

These grants offer small business startup financing for qualified candidates. 7.8 million in funding for 27 MBDA Business Centers (MBCs). These centers help minority firms with usage of markets, contracts, capital and other proper business talking to services. Many capital investment groups, as well as the government, offer grants specifically for female business owners.

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These grants encourage women to get business owners, which creates a more diverse workforce. Actually, there are particular offer programs and business contests geared towards women. Business champion in the 2007 competition. Business is sponsored by OPEN from American Express and Count Me In for Women’s Economic Independence, a nationwide not-for-profit supplier of resources, business education, and community support for female entrepreneurs.

Where specifically can women look for funding? Searching for small-business grants or loans here but filtering the results on the still left side of the web page for grants specific to small business. The U.S. Small Business Administration hosts an annual competition for businesses with a marketable product or service that positively affects women’s lives. To take part, you must first enter and win a local InnovateHER Challenge to progress to the nationwide semifinal round. The SBA helps these two competitive programs, which ultimately provide grants to small businesses that contribute to federal research and development. Eleven federal agencies, including the departments of Agriculture, Defense, and Health and Human Services, post grant opportunities on their websites.