August 13, 2007

Affordable housing explained.

Saw this article in the Va. Pilot. I like it for a couple of reasons. First it points out a problem that exists in many places, including the Outer Banks. It also explains some of the really creative solutions that communities are using. Va. Beach is considering a plan similar to the ordinance recently passed in KDH. The ordinance uses incentives to encourage developers to include workforce housing in their communities. The article also offers the clearest explanation of the vehicle used to keep the homes affordable as they are sold over time.
Here's how it would work: Developers could build up to 30 percent more units on a property without having to buy more land. In exchange, builders would designate at least 17 percent of the total project as work force housing and sell the units below market price - up to 25 percent off.

That discount would be treated as a soft-second mortgage. If the home buyer wants to sell, the city has the first right to purchase the home to keep it affordable. If the city doesn't exercise that right, the buyer can put the home on the open market, but must repay the discount to the city once the home sells. That money would possibly be used to build other such homes.

The model used by the Outer Banks Community Development Corporation * is slightly different. The second is held by the CDC. The owner can get some appreciation in equity over time but the equity gains are limited for the first 20 years of ownership. Presumably the property will change hands in that time frame.
The second reason I like the article is because it has one of the dumbest quotes I have seen in several years.
The Virginia Beach Taxpayer Alliance opposes the plan, partly because the group says the government has no "legal or moral responsibility to provide any class of citizens the opportunity to purchase a new house."

"The proposed policy has more to do with transferring wealth and income from existing homeowners to developers of new construction than it does with providing quote unquote affordable housing," the group wrote in response to a draft of the housing plan.

City leaders could create more affordable housing if they significantly cut real estate property taxes, said John Moss, the group's chairman.

I love this kind of stuff. First it helps our community to keep costs down if public sector employees can find housing that fits within their budgets. Creating it in our communities helps ensure that government will be able to provide needed services at reasonable cost. I am not sure how allowing increased density involves a "wealth transfer" since no "wealth" is changing hands and the program is optional. Finally, while property taxes add to housing costs, even the elimination of property taxes isn't going to make a $500,000 home affordable for a teacher making $40,000 a year. Stupid, knee-jerk reaction, by stupid knee-jerk (sorry) by people the paper regularly uses to give quotes that piss me off.
Ok, nice piece, lets keep working on the problem in our area.

While we are talking about rules, I saw this piece in the NYT. New York City is considering banning the word bxxxh. The article details some of the pitfalls and problems of this strategy.Interesting topic. Rules like this have political impact but little real force. Nags Head has a similar rule about keeping live oak trees. The rule is enforced but has more symbolic impact than real force. It has raised sensitivity to keeping existing vegetation, which is an important goal. Not sure Dare County is ready for the banning of individual words. That cuts a little close to the bone even for me, the Mayor who never met a rule he didn't like (Or TMwnmarhdl for short).

*Disclaimer:I recently joined the board of the OBCDC.


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