Having been in the rental housing business since 1971, I agree with Mr. Feldman's report. All of us in the affordable housing sector are sitting on vacancies in the 10 to 15% range. Landlord friends in the medium to upper bracket rental housing sector are seeing "the softest rental market in 35 years"
There are plenty of rental units available in the market for all levels of renters. In the low to moderate rental market (ie affordable), that myself and the other members of the MPRAC group provide, we can not afford to take the chances on renting to many of the low income families that need the housing that already is available and that we are sitting on. The reason is that our costs have skyrocketed ( my taxes on average will rise 26% next year, insurance rates have doubled in 2 years) and the costs of labor for competant professionals to repair damages caused by these tenants has tripled over the last 5 years. Licensed plumbing, heating, and electrical shops charge between $85 and $105 per hour. A business friend of mine just won a competitive bid for a large management company for their repair work. His was the lowest bid for service - $70 per hour plus twice the cost of materials or supplies needed. If tenants totally trash out a house, the costs take years to recoup. So in the long run it is cheaper and makes more sense to let houses or units sit vacant. Building more housing (with gap financing at taxpayer expense) is not going to solve this problem. Making tenants criminally liable for their damages will help. Knowing that they can be criminally liable for damages that they cause and or their children will change behavior. Then we can start taking chances on these tenants again. The other solution that I have promoted to the Mayor is to have an indemnification fund set up by the City and or County so that if we take a chance on a problem tenant and they screw up, we can seek relief through the fund. Feldman is right. We do not build more power plants because tenants can not pay their light bills. We should not build more subsidized housing because tenants can not pay their rent. Rent stamps like food stamps would be much cheaper for everyone. concerned. Steve Meldahl (Jordan) work ----- Original Message ----- From: "Michael Hohmann" <[EMAIL PROTECTED]> To: "[mpls]" <[EMAIL PROTECTED]> Sent: Friday, November 22, 2002 10:36 AM Subject: [Mpls] Affordable Housing: causes-solutions? > In today's Strib, Mike Meyers draws attention to a recent report on > affordable housing by an economist at the Minneapolis Federal reserve. The > report, "The Affordable Housing Shortage: Considering the Problem, Causes > and Solutions" by Ron Feldman, concludes that 'policymakers should recognize > that government financing of new housing units is unlikely to be a > cost-effective response to low household income.' > > "Shortage of money, not housing, puts homes out of reach" by Mike Meyers > http://www.startribune.com/stories/417/3448518.html > > Ron Feldman's complete report, is available on the Minneapolis Federal > Reserve website in pdf format, 43 pages including bibliography, tables and > charts: > http://minneapolisfed.org/pubs/bsdpapers/housing.cfm > > > More fuel for the discussion. > > > Michael Hohmann > Linden Hills > www.mahohmannbizplans.com > > _______________________________________ > > Minneapolis Issues Forum - A City-focused Civic Discussion - Mn E-Democracy > Post messages to: mailto:[EMAIL PROTECTED] > Subscribe, Unsubscribe, Digest, and more: http://e-democracy.org/mpls _______________________________________ Minneapolis Issues Forum - A City-focused Civic Discussion - Mn E-Democracy Post messages to: mailto:[EMAIL PROTECTED] Subscribe, Unsubscribe, Digest, and more: http://e-democracy.org/mpls
