ERE City (US)

How to avoid signing your life over to a mortgage
jacob
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Post by jacob »

Portland, OR.
* all the cool kids live here

* affordable on ERE budget, single family housing under 100k

* airport

* rain/green country

* river/ocean access

* climate change is favorable to this region

* health insurance is affordable, 35yo male = $50/month


JohnnyH
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Post by JohnnyH »

I really like Oregon, but for me the state's up to 11% income tax (9% starts at a paltry $7750) is unacceptably high.
Also, the property taxes are very high. Unlike the examples from Florida and Nevada, taxes in Oregon are marching up while sale/asking prices collapse.


sethwmiller
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Post by sethwmiller »

I know I was the one who suggested Corvallis to you but I was going to also mention the Oregon tax situation. Since they don't have a sales tax it seems like the state revenue system wouldn't be ideal (though I don't really know think there is a perfect system).


George the original one
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Post by George the original one »

Oregon's income tax is high, but you have to be earning a bunch more than I do to get into the 11% bracket. Most everyone falls into the 9% bracket (after counting the exemptions).
Property tax increases are capped at 3% per year in Oregon unless a local bond measure boosts it. Own your home for a few years and you'll find that you are being taxed at less than market value rates.
I've found property taxes are generally comparable to Washington state's property tax. Portland (inside the city limits) is higher to pay for the extra services available. Property taxes are no where near as high as Pennsylvania or Virginia.
Examples of property taxes:
my former 1300 sq ft home in Milwaukie (between Portland and Oregon City) was a mere 20 minutes from downtown Portland and the property taxes on it are currently $2,167 per year.
my current 1800 sq ft rural home on 1 acre (40 minutes to downtown Portland) has property taxes of $2,718 per year.
my friend's beautiful vintage 2900 sq ft house in the desireable Ladd's Addition neighborhood of Portland has property taxes of $5,457 per year.
So the moral is to pick your location and curb the desire for big homes to keep the property taxes in check.


JohnnyH
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Post by JohnnyH »

@George: thanks for the info. Q: what is the 3% based on? I'm guessing some bureaucratic value... [From the rental property thread] It seems some states (NV, FL) base their taxes on actual market behavior. And they actually go down! I'm guessing most states don't.
I'm in MT where the taxes are certainly not decided by market action and are notoriously difficult to appeal. I recently attended an auction out of curiosity. The 03 taxes were 3.8k. In 08 they were adjusted to 8.5k(!) with a "market value" of 2.5 million... The house was for sale for 2 years, with an ending asking price of 800k (still no takers). It ended up going at auction for 400k. I wonder to what extent high, inelastic taxes are pushing prices lower.
I digress, but my point is I am worried about states where listing/sales prices decline by 25-50% (WA/OR/MT) and property taxes only go up somehow... What was done in MT via the difference of 1 assessment made some houses almost a liability and destroyed several markets.


George the original one
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Post by George the original one »

@JohnnyH - Initial assessed value = sales price when you purchase. Each year after that, then assessed value increases by what the county needs, but no more than 3%. Property improvements, basically anything requiring a building permit, will increase your assessed value by the value of the work. Bond measures (parks, schools, transportation, fire, & police are the popular ones) can cause increases above the 3% rate, but the community approves those in an election.
Thus as a homeowner, it is quite possible to have a market price that is well above assessed value. For instance, I purchased my house for $221k seven years ago and I added a $30k workshop a few years ago and the assessed value is $188k while the market value is $300k... it's going to take a bigger housing market crash before my house is below the assessed value!
[late edit: there's a maximum assessed value that's tied to the property's value back in 1997 which is another reason my assessed value is below market value. New property doesn't get that benefit, but they still have the 3% increase cap.]
The current dirty political trick in Portland (and presumably other towns) is to spend the city budget on desireable frills and then ask the voters to approve a levy needed for fire stations because the politicians know that a levy for the frills would not have passed. Our voters haven't seemed to catch on yet and aren't asking why the fire department budget didn't already include the station...


dragoncar
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Post by dragoncar »

What kinds of frills? Miniature American flags for all?


Riggerjack
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Post by Riggerjack »

WOW. this post has caught me by surprise. my retirement goals seem to be way outside the norm here.
first, i don't understand the obsession with public transport. it could be that i'm from a blue state, but everywhere here in western WA has public transportation. i live in island county, my end of Whidbey island has more than 5 acres as the average lot size. we have a "free" bus service. supported by a 2% sales tax. a great library system, plenty of social activities to keep our large retiree population entertained. by any measure, this is a rural area. but i've lived much further out. in jefferson county, a bus service runs daily, with dial a ride taking care of the mobility impaired. we on the island are a 20 minute ferry ride from suburbs of everett/seattle.
i keep reading about 30 minute commutes from suburbs to commercial centers going away with peak energy. without getting into the percieved inevitability of the crisis, you don't seem to be doing much out of the box thinking. if energy prices drastically go up, employee costs go up, facility costs go up, telecommuting becomes more universal, and the commute gets eliminated. if the telecom infrastructure is in place, nobody moves because of oil prices. if you want to anticipate this kind of world, telecom would seem to be a major factor. (another area where south whidbey wins) around here, suburbs are more autonomous than the cities. without the need to commute, almost all need to leave your suburb is eliminated.
as to the liberal equals open-minded bit. in my experience, that only lasts as long as your views don't differ from the liberal orthodoxy. as you get older, you may find a rural mentality of live and let live works best for you. i used to be liberal, i was raised liberal, lived in a commune at one point. i didn't see the intolerance from the inside, i sure see it now.
on my street, i have many fellow gun nuts, we also have a full blown commune. it ain't popular, but we believe in letting them do their thing, so long as they keep it on their property. again, the folks most in need to impose their views are liberal (not the commune hippies, they pretty much do their own thing.) i've always found foks treat each other better, when there aren't too many around. too many rats in a cage always results in cannibalism, regardless of food supply.
if you truely are a doomer, and thinking in terms of where you want to be, why would you pick a city? city folk tend to be far more specialized in skill sets, few of which remain useful if infrastructure starts breaking down. in rural communities, you can find someone who knows how to do almost anything you want to learn, can fix nearly anything that breaks, and is already living far more independently than is even possible in a city.
now how this applies to you as foreigners, thinking i've made persuasive reasons to move to the area.

THE WEATHER: it drizzles. it sprinkles. it will be cloudy/overcast/foggy. but several days a year, we have glorious summer sunny days. if you want/need more than 5 of these per year, live somewhere else. we don't want to hear you complain about the weather after you move here.
winter is similar to late fall/early spring in similar latitudes. we had a cold snap with snow that lasted the better part of a month 2 years ago, but often we don't have snow at low elevation more than a few days a year, often 1 day at a time, it's not unusual to not get snow at all in a winter. for winter driving, our snow is wet, very slippery, our drivers never get a chance to develop their snow driving skills, and 1/2 the driver in urban/suburban streets are from so cali, anyway. and SUVs are very popular.
another point. this area has had a very high influx of new population, and racially diverse immigrants are far more popular than californians. if you don't want to experience the seattle freeze, leave your 49ers jersey in cali. or not, your choice.
in the tacoma to everett sprawl, traffic is bad. there is no local intention to fix this in any way. if your commute is only 30 minutes, you have a very local commute and/or work some very strange hours. i used to work construction, and that included shifts that would end at 3:30 in the morning. there is always traffic at 3:30, but usually only backs up for an accident. any other time, traffic backups are a primary consideration in how you get where you are going.
as to taxes, no income tax, sales tax is around 9%. property taxes are directly proportional to population density, similar to the voting patterns. i live in a large house on 5 acres. my property taxes are about 60% of the medium size house i have in a suburb. i expect to cover property taxes on the future tree farm with selective thinning.
as a rural western washingtonian, the only advantage your cities and college towns seem to have is that you will have more people to entertain you, if you like/need that kind of thing.


Riggerjack
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Post by Riggerjack »

so, i live on south whidbey, and talked it up a bit, but this is not where i intend to retire. my friends are on the mainland, so when i retire, i'll sell off some rentals, and buy a small tree farm, 40 or so acres, and build my ideal home/shop there. probably in eastern skagit county. set up the tree farm to harvest after i die, set up as much as possible as my cemetery, and start up a retirement business.


George the original one
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Post by George the original one »

> What kinds of frills? Miniature American flags for all?
$300 million for bike transit over the next 20 years.
I support bike transit efforts, but that is an obscenely expensive figure! Since the current mayor is not running for reelection, I think we'll see this be reduced to a more realistic sum.
The current mayor made it part of this year's budget as a priority over the fire station.


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jennypenny
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Post by jennypenny »

> $300 million for bike transit over the next 20 years.
Are they buying everyone a bike? Do you get one if you move there as part of a welcome package? I'd love that. All I got from my town was a bumper sticker and some restaurant coupons when we moved here.
9-11% in income tax is HIGH. I realize the goal here is to avoid a lot of income per se, but I would think an income tax would hit us harder than a sales tax. I'll have to run some numbers to see. I guess once you're FI no sales tax is key, but I'm still wary of that kind of income tax. Do most retirees move out of state?
Is that a state-wide income tax, or just for city residents/workers?


George the original one
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Post by George the original one »

Oregon income tax is statewide, allows for $4,500 personal exemption, $9,000 exemption if married filing jointly, $2,000 exemption for each child.
Useful web site to compare various states: http://www.taxfoundation.org/taxdata/show/228.html
Regarding Portland's bike transit plan, that was all for improvements, such as bike paths and bike lanes and bike bridges and bike parking. Sadly, the city is not handing out bicycles (even though that's $600 per person over 20 years).


jacob
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Post by jacob »

More on Oregon from early-retirement.org.
http://www.youtube.com/watch?v=AVmq9dq6 ... r_embedded


George the original one
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Post by George the original one »

In another thread,"When did you decide to ERE?" chilly wrote: "After about the millionth rainy weekend followed by a sunny beautiful work week."
This is a common experience in western Oregon and Washington (and further north into Canada). If you're still working and can't cope with the odds of this happening, then consider living in eastern Oregon and Washington (or Idaho) instead. Spokane, Coeur d'Alene, Boise, Baker, Burns, Pendelton, Bend, Walla Walla, Klamath Falls, Ashland.


chilly
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Post by chilly »

Yeah, it's certainly not a myth:
http://hurricane.ncdc.noaa.gov/climaps/sky51c13.pdf

http://hurricane.ncdc.noaa.gov/climaps/sky51a13.pdf

http://hurricane.ncdc.noaa.gov/climaps/sun5213.pdf
Who knows though... being retired means you have 100% of your days free/flexible, vs. 28% when working. That means someone working would need to live in a place 3.5 times sunnier than a retiree to have the same number of free sunny days. Not to say more isn't better though.


jeremymday
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Post by jeremymday »

@ George,
I must say that I think Coeur d'Alene is one of the most beautiful places in the U.S. I didn't expect to find this driving through the tip of Idaho on my way to Seattle.


jacob
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Post by jacob »

I think this is a good argument against big cities [going forward]
http://www.telegraph.co.uk/news/uknews/ ... ondon.html
Smaller cities does not have a critical mass of idiots and people will be less likely to "not get involved and just let the police handle it."


Ralphy
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Post by Ralphy »

Decorah, Iowa.
I plan to stay in Iowa for a while to be near family, so I have a bias, but I think this is still a good addition to the list.
Random stats I can think of -
Population approx. 7-8,000.

Home of Luther College.

On the Upper Iowa River, about 40 miles from the Mississippi.

Not particularly close to major cities (3-5 hours). I'm not interested in being very close to major population centers.

Vibrant biking community.

Historic, walkable downtown.
You might like to check out their Sustainability Plan on the city website (no links from me, I'm trying to write from a phone). Seems very pro local food development, biking and walking.
~20% of energy produced in Iowa is wind power, highest in the country.


chilly
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Post by chilly »

I love Idaho and have considered it myself. Specifically I was eyeing McCall. It's not the ideal ERE location, but it has great year round outdoors appeal (skiing and a big beautiful lake). Hunting, fishing. Housing is not especially cheap, but rents are quite low. About 2 hours from Boise. So again, while not the absolute most practical or cheap, it is near the top of my practical vs. appealing tradeoff list right now (bang for the buck).


jacob
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Post by jacob »

Last week, we went on a road trip to Oregon to check out real estate. The plan was pretty to go to Portland and then zig-zag all the way back down again driving between potential addresses on redfin.
I find that it's easier to get a feel for the neighborhood when on the ground.
The favorite spot for us was Veneta, OR which is 12 miles west of Eugene on the other side of the lake. It has 0.5+ acre lots in a small time atmosphere (you can see your neighbors hours from your but his wall doesn't cover your entire view because it's ten feet away like in suburbia) for 90-150k (most of which are light fixer uppers .. what we looked at anyway).
This made me realize that to please as many people as possible, we need do find places where, so to speak, there's a moon (for the small town people) orbiting a bigger planet (for the city people).


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