I think home ownership would almost always be preferable to rental housing - both for the occupant and the neighborhoods looking for stability. But (and this is especially true of the older housing stock in Minneapolis) how do you insulate the "affordable home owners" from the unpredictable and perhaps unmanagemable expenses that come with owning a house vs renting? New boiler? Pipes leaking? Roof problems? Hiring professionals to deal with these problems is very expensive, and if you are looking at first generation home owners it is likely they don't have the history of growing up in a "handy" family to tackle these themselves. If one of these events occurs around the time of a car problem, or a medical bill, and they need a subsidy for a period of years to make the home financially feasible, the financial pressure can be brutal. You may end up with either a rate of default or the need for a second program that either covers these housing related costs or provides loans - but servicing the loans and the housing costs may also be a killer for the occupants.
Of course for example if you get a brand-new house built like a Habitat house some of these maintenance problems can be expected to be a long time off, but then the subsidy you provided up front just jumped a lot from a down payment .
Perhaps the focus of affordable homeownership should be establishing what the criteria would be for someone to as you said get up to that next rung of the ladder to make sure they were not biting off more than they were capable of handling. As long as you are proposing a government subsidy of some kind what about a rebate on part of the rent paid prior to home ownership, or a generous "Rent to Own" plan where you start out renting the home and after 5 or 7 years your payments have accumulated to cover a down payment? I'm sure variations on these approaches have been tried in the past, I'm not familiar with all the programs offered from public and private organizations.
Mike Hess
Kingfield
>From: "JIM GRAHAM" <[EMAIL PROTECTED]>
>To: "V.L. Freeman" <[EMAIL PROTECTED]>,<[EMAIL PROTECTED]>
>CC: <[EMAIL PROTECTED]>
>Subject: Re: [Mpls] Section 8 and Boarded Up Houses....
>Date: Mon, 6 Jan 2003 14:23:23 -0600
>
>Thank you Vanessa Freeman for your wonderful letter this morning. Sometimes
>people who were drowning in a sea of poverty hold on to the bottom rung of a
>ladder that they grab and have a hard time letting go to move up a rung.
>They have to be prodded to get them to take that next step, because compared
>to being homeless it seems awful good. They need to be reminded that others
>are also drowning and need that first rung more than they. Jason and Don
>Jorovski remind us that there are a thousand desperate souls in Minneapolis
>tonight, needing and waiting to grab that same bottom rung.
>
>We also need to build a wider more comfortable ladder with more than just
>bottom rungs. The key to such is "Affordable Homeownership". All the talk
>of affordable housing has by and large left out the most viable method of
>stabilizing families and giving them a chance to keep climbing that ladder.
>Supportive homeownership is so much easier and more beneficial than
>supportive rental housing. It takes much less energy to stabilize a family
>in housing that they own than in transitional rental housing. Because it
>takes so much less energy, (you only have to give support for a short
>period, not the rest of their lives), it is much less expensive.
>
>Some powerful non-profits, who make their money from supplying subsidized
>rental property, do not like homeownership because it permanently removes
>their clients as a market. Also the profits from supportive services to
>stabilize a family in a home they own are far less than the seven or eight
>hundred dollars a month for a mat on the floor of a shelter. Far less than
>the up to $1200 to $1300 end cost they get for a supportive housing
>apartment. The costs to the taxpayers for a subsidized rental apartment are
>greater than the full monthly cost of a middle class home.
>
>My choice is to give the family the down payment, the support and a
>declining monthly subsidy for the first seven years. Then the family is on
>its own with not only a stabilized family, but also with seven years of
>equity in a house. That equity translates into small business loans and
>college educations for children as well as a family that is integrated into
>society and who can help others grab the ladder.
>Sharon Sales Belton had a plan to subsidize housing costs on three or four
>hundred thousand dollar town houses in order to, in her words, "attract the
>middle class back into Minneapolis". She was on the right tract that
>housing was the key to having more middle class in Minneapolis, she just did
>not understand that the home grown kind are better than imported ones. She
>just did not understand that "affordable homeownership" is the key to
>taking poor people and making them "Middle Class".
>
>A few Non-profit housing developers and providers are beginning to
>understand, and caring more for people than profits are starting programs
>for affordable homeownership. They understand that this process takes
>supportive services and training for the individuals, but that it is a
>long-term solution. NOT a quick fix that has to be re-fixed on an ongoing
>basis forever. The difference is empowerment and giving someone freedom
>from the temporary vagaries that afflict us all, but impact the poor in
>devastating ways. American Indian Housing Corporation is a good example of
>a Non-profit that is willing to construct such housing and create such a
>training program. They are looking at building such housing and supplying
>such support to create homeownership in the community.
>
>I think Marx meant this when he talked about "Control of Capital Goods". We
>should empower people, not keep them in economic slavery. The old adage is
>true, we should teach people to fish rather than giving them temporary
>handouts that aren't temporary but lifelong. It costs no more to help
>someone to permanently OWN a house than it does to help someone to always be
>at the mercy of others for housing. It just takes a little more commitment
>and a little more care.
>
>People should call their Council Member and the Mayor and tell them to start
>talking about "affordable homeownership" of housing, not just
>institutionalized poverty in large affordable rental projects. People
>drowning in poverty are glad to grab even the "Institutionalizes" ladder,
>but we need to put in a couple of additional rungs. Homeownership is a
>ladder that leads up and out of the muddy riverbank of poverty, not just out
>of the cold water and drowning.
>
>Jim Graham,
>Ventura Village - someone who swam a few years in that cold river.
>
> >>"We can only be what we give ourselves the power to be" - A Cherokee Feast
>of Days
> (Remind someone of this)
>
>
>_______________________________________
>
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