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Q Ar Inc, 861-2026 8/13/98 1:S 2 AM S/6 Nationale Any time a home is '"reconstructed", there is a loss of value that occurs while - -� - its portions of an existing saleable home are dismantled in preparation for improvement. Because of this, the home as collateral to a bank, actually diminishes l' � o� , some ��1 ti �e in value dur in construction before it improves. In ad dit. dismantled structure has a value that must necessarily be discarded before an improvement that rn ake s the home more marketable can occur. Marti cuilarly in an expensive construction market like the present One, it may not be ossibl e for the homeowner to feel confident of are immediate increase in the home value equal to his or her initial home value plus the cost of improvements. Over the years, however, the home will appreciate more rapidly than it would have, had it been allowed to become more and more market obsolete. From QSA's experience, a reconstructed home in a community Sritli a program in place to encourage malty reconstructed hordes, does reach a value that recovers its investment, but this is a fact learned from the experience of other commuu-iities, and not one readily apparent at first to the risk tapers, the homeo-sinners and the barks. For these reasons{ public city involvement in nuking a home reconstruction more attractive and competitive with the cost of simply selling the hone, abandoiung the community and moving to an outlying exurb (with the homes that already have desired amenities), is critical for cities in the first ring. This p rogram is designed also to provide reasonable security and return for the city. Roseville has the opportunity to reserve approval of a project Luitil it is well enOUgh planned armed to permit financing by traditional commercial leaders. It draws potential participants ants from a broad field and permits the city to stay less involved in particular attempts until they appear likely to succeed. This p rogr am requires city capital at first, but an analysis of return on i n vestni ent shows that the city will recover its investments in tax revenues and loan repayments even if even participant stays in the home long enough to have half the loan forgiven.* It has the additional advantage of encouraging residents to stay in Roseville and develop their commitments here. If the economy slows and Roseville homes fail to appreciate 4% annually*, and/or the economic value of well-designed homes becomes more obvious, the loans can be made to return more revenue by requiring a mcxle st interest rate or greater y a re p ment. This could further enhance the city`s ability to expand the program.