Waterbury Real Estate - The View From the Edge
12/07/2007

The hot real estate discussion is still all about the sub-prime mortgage impact on housing values and where and when is the bottom of the market finally going to get here. Truthfully, I wish I knew, but having experienced the late 1980’s real estate crash I can say this downturn is worse. The reason is simple, back in the 1980’s nobody believed that real estate would depreciate in value so people kept buying until the banks started going out of business. This time many people remember what happened the last time and it seems that all the buyers are on an extended vacation.

With the slowdown in real estate, now the construction trades are feeling the effects as well, and homebuilders are showing very bad numbers as more monthly figures keep pointing to a large supply of product and no demand for building new units until inventories are absorbed by homebuyers.

So with buyers not buying, builders not building and real estate salespeople not selling, this is hardly a good scenario developing. The economy still seems to be rolling along with consumers buying items on their charge cards. Well at some point, these charge card payments will begin to fall behind and then we will have the circle completed as banks will begin to cut off the consumer’s ability to purchase as delinquencies on consumer debt rise and banks close down charge accounts.

You would think by now that the government will recognize these factors and try to step in, but the question remains, what can the government do to help? I don’t believe they can do very much, this needs to work itself out and the solution is time. When the national media gets off this story and stops telling the public that prices may fall in the future, then buyers will start buying, builders will go back to building and real estate salespeople will start selling again.

The truth is mortgage interest rates are still near historic lows and prices have adjusted downwards a bit, so it is a good time to start looking at homes. What is important to remember is traditionally real estate is a long-term investment and people seem to forget this fact. With several shows on national television such as Flip That House and Property Ladder, the American public is led to believe that real estate is as liquid as a stock investment and profits can be made fast. Well it is not a liquid investment; it’s long-term so take heed of this fact.

Waterbury has a double-edged sword fully displayed concerning its real estate opportunities now. Our prices are a true value and bargain compared to the rest of the Connecticut market. However, the lack of substantial employment, a downtown business district searching for an identity and a per-capitia property tax burden that is among the very highest in the area means we are a coin toss for homebuyers and investors at the moment.

Having been focused solely on legislative matters at the State Capitol for the past twelve years I was never very involved in local issues. Lately, I have begun to slowly meet some dedicated local politicians in Waterbury realizing that my hometown is what matters most. What I am beginning to recognize is that Waterbury’s future is pretty bright. Some of these younger politicians I recently spoke with; Paul Pernerewski, Paul Nogueira and Antonio Pinto are focused on getting Waterbury back on track for a recovery that could be tremendous. I also have noticed that all three political parties in town seem to be bringing in younger people who care about turning our city into a strong community; this is really great news.

Waterbury’s revitalization for a strong housing recovery has 3 issues to overcome. One issue is the downtown business district, it needs to find a niche and then go for it. Discussions around establishing an entertainment zone and developing artist lofts and studios blended in with a mix of market rate housing seems to be a great idea and we have the facilities in place to make that work, let’s just do it!

The second concern is that we have a very substantial zone in transition surrounding our central business district. It is here where most of the blight is located, properties are either in foreclosure, listed for sale or are abandoned, and thus homeownership levels are very low. I would expect the Waterbury Property Owners Association to step up to the plate because of the combined years of experience within that group and develop a plan for our Board of Aldermen for consideration and review. In this plan, we should look at effective and increased code enforcement, create a deterrent for vagabond tenants from destroying buildings and living rent free and help design an efficient tool for the city to acquire blighted and abandoned properties.

The later is the key, because once the dilapidated housing is acquired, the city agency, perhaps the old Waterbury Housing and Assistance Program can handle these acquisitions. Next, the agency could attach a financial incentive package to these houses and get a neighborhood buy from the local NRZ or Community Club for the developers’ proposal on that property rehabilitation. We need to stabilize Waterbury’s zone in transition and speculators and absentee landlords are not the solution here, it is urban homesteaders that we need to bring to Waterbury. The goal is to help facilitate homeownership opportunities for first time buyers with these current substandard houses.

The third issue challenging Waterbury’s future is the lack of quality jobs for our residents. Waterbury had such a rich legacy of skilled workers and many manufacturing jobs were within walking distance for our residents, Waterbury was a vibrant community. With our historic tax mil rate well above our surrounding communities tax rate, most of the manufacturing jobs are long gone. Waterbury needs to focus on its best resources, our highway system, our low crime rate, our abundant supply of water and our state of the art wastewater treatment plant. We need to target industry like the pharmaceutical industry and cosmetic manufacturers that both require heavy water use and their need to discharge treatable wastewater. Looking a bit further into reviving quality jobs, our city also has an enterprise zone district currently. Expanding that zone a bit will help stimulate development, encourage investment and help attract business into our city. The expansion of the enterprise zone is very important because it will provide more options where these companies can locate in Waterbury.

It’s pretty simple, use our resources and tax abatements to bring back industry and create good jobs. New jobs will create a demand for homes and provide much needed quality renters in our city and we’ll have a supply of newly renovated housing to offer. With new consumers living in our neighborhoods and some in downtown apartments, money will begin to be spent in the entertainment district. Soon restaurants and nightclubs will now want to move to Waterbury and we will become a regional destination and begin to rapidly regain our status as a vibrant city, which ultimately is what we all want!

Well if it was only this simple! However, I think it can be just that simple and with younger people stepping forward in politics, our years of corruption and mismanagement behind us, and plentiful resources in place, it can happen pretty fast. If we keep a positive note in our discussions for the future, people within this community will get involved. Remember, it’s our community, and it will be only as good as the effort to restore it.

Happy Holidays to all and May God bless all our children and families during this difficult and stressful time.

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