Bill Cullen writes, "5) Jim Graham, how many families could your organization put in EXISTING homes if you were given $175,000? Would those owners be limited in the equity they can earn?"
Actually Bill, and other list members, that amount equals the subsidy we attempted to get for not one unit but several thru the NRP setaside. With a subsidy of $175,000 a unit how many units could you provide as affordable homeownership? Conservatively 10,000 but probably for 90% of all renters in Minneapolis. In fact with that amount of subsidy people could pay a couple of hundred dollars a month and live in better neighborhoods. (Sorry if I scared some of you liberal NIMBY's with that suggestion. It won't be allowed to happen) You could build a quality 4 bedroom - two bath- and garage house for approximately $140,000 plus the lot and just give it to someone. Want to end poverty and create a new middle class family for Minneapolis? Just give them a house and some support to keep it running. They will return your guarantee in the form of taxes in just a few years and you get net profit from then on. Good investment for the taxpayers and compare it to the net loss of subsidy for multi-unit rentals we presently get. I simply can not believe the amount of subsidy that goes into some housing, but more importantly I can not believe the justification for trapping people in housing where their wise decisions, care, and investment does not allow them the same opportunity to gain equity as other people. The land trust model may be OK for a townhouse or condo situation but for single family owners it is "Usury" and taking advantage of both the poor family and the public tax payers. We want people to be able to gain equity and move into the middle class. Land is a small part of the cost of a house. The house itself is by far the major investment. Yet the land in a landtrust would limit the amount a person could gain from the increase in equity to 25%? Something is badly wrong with that concept, at the very least it should be proportional to the amount the land contributes to the actual sales value! Also, ask any realtor and he or she will tell you such an arrangement clouds the title and makes the house less marketable and as such further limits the value of the homeowners investment. The GI Bill and FHA programs knew what they were doing. They gave people a chance to buy a house at a reduced interest rate and no downpayment. We need to get back to a form of that. Perhaps we need a little more subsidy for those who truly need it for affordability, but it gives more to the homeowning family and costs tax payers far less. Perhaps I can be instructed on the matter, but at the moment I see the "Land Trust" model as just another method of milking public tax dollars by oppressing and limiting poor people. My question is if it is such a good idea then why do most of the people talking about and pushing the idea own their own houses with unclouded titles? Secretary of HUD Martinez has just announced a new program to create "Supportive Homeownership". People can look at it at following site. "Bush Administration Announces More Than $37 Million in Grants to Promote Homeownership and Housing for Low-Income Families Nearly 730,000 individuals and families will have a greater opportunity to find housing or keep the homes they have because of more than $37 million in housing counseling grants announced today by Housing and Urban Development Secretary Mel Martinez. http://www.homeownershipalliance.com/redirect/111903_article1.htm " Again I say, we Democrats need to jump on this and start being responsive to people's needs and less responsive to Developers' needs. Let's return to meeting people's needs and creating opportunities for individual people to succeed and stop supporting the success of a few fat cats. We need a little less "maintaining" people in poverty and a little more empowering people to rise out of it. There simply is no better way to bring poor people out of poverty than to make them successful homeowners. It would be a crime for the City to miss the opportunity that low interest rates give to inexpensively raise poor people out of poverty. Minneapolis, and the Democrats, need to make those wise investments now when the opportunity exists. It may be a whole generation before this opportunity comes again. Jim Graham, Ventura Village "There is no finer investment for any community than putting milk into babies, revolution into minds, or families into homes." ----- Original Message ----- From: "Bill Cullen" <[EMAIL PROTECTED]> To: "Mpls Forum" <[EMAIL PROTECTED]> Sent: Wednesday, November 19, 2003 8:28 PM Subject: [Mpls] affordable housing & density seminar... > > I appreciate Michael Hohmann's summary of the affordable housing seminar > last night. One part Michael wrote was: > > Relative to the need for building more affordable housing, questions were > raised regarding the high vacancy rates in the private rental housing > market, and the responses indicated that high vacancies were at the > upper-end of the rental market. Low-rent units were not adequately > available, we were told. > > My response: > > One must define "low-rent" and "adequately available" to discuss this point. > However, on 18-Oct-03, the Star Tribune reported "In units priced from $500 > to $599, the vacancy rate rose from 3.5 percent during the third quarter of > 2002 to 6.2 percent during the same period this year. And in units priced > from $700 to $799, the vacancy rate rose from 1.9 percent last year to 6.6 > percent this year."(1) Since a balanced market is considered to be 5% > vacant, it appears we currently have an oversupply of housing priced $500 to > $599. What is "low-rent?" > > Michael Hohmann continued: > > The Land-Trust model was brought up by Council Member Niziolek, as a way to > make housing available at reduced cost via eliminating the cost of land and > limiting equity growth in the property. > > My response: > > On 16-Nov-03, the Star Tribune had an article on "Minneapolis's first > community Land Trust."(2) This article has a lot of contradictory data, so > I am not sure how land trusts really works. However, I have five > questions/comments: > > 1) This program was granted $125,000 from MCDA and $50,000 from General > Mills to build "one or two" units. Each unit is sold for $155,000 -- not > including the land. So, the non-profits are selling townhomes, charging > rent for the land, and netting income of $242,500/unit ($155,000 + $87,500). > Using the MLS, I searched Hennepin County for townhomes listed under > $155,000. It found 80. When I searched on townhomes for under $242,500, it > found 446. What problem did this land trust solve? > > 2) The owners cannot sell for more than 25% above original purchase price. > And the owner only gets 25% of that gain. This is messy. Homeowners will > be trapped in these homes. They will have SOME equity, but they will never > be able to sell and "buy up" as their equity will not appreciate at the rate > of the market. > > 3) How is the next owner selected? If a property cannot sell for more than > 25% over purchase price and the owner has it 10 years, the property will be > under market. Everyone will want to purchase it. How will the next buyer > be picked? Lottery? What will keep the second buyer from immediately > re-selling and pocketing a 25% gain? > > 4) What happened to the low down, low interest FHA loans that all us old > timers used to purchase our first home? > > 5) Jim Graham, how many families could your organization put in EXISTING > homes if you were given $175,000? Would those owners be limited in the > equity they can earn? > > It is my opinion that creating a housing market which operates outside the > real housing market is unlikely to be successful. > > Bill Cullen > Whittier Landlord > > (1) http://www.startribune.com/stories/417/4141747.html > > (2) http://www.startribune.com/stories/836/4213294.html > > REMINDERS: > 1. Think a member has violated the rules? Email the list manager at [EMAIL PROTECTED] before continuing it on the list. > 2. Don't feed the troll! Ignore obvious flame-bait. > > For state and national discussions see: http://e-democracy.org/discuss.html > For external forums, see: http://e-democracy.org/mninteract > ________________________________ > > Minneapolis Issues Forum - A City-focused Civic Discussion - Mn E-Democracy > Post messages to: mailto:[EMAIL PROTECTED] > Subscribe, Un-subscribe, etc. at: http://e-democracy.org/mpls > REMINDERS: 1. Think a member has violated the rules? Email the list manager at [EMAIL PROTECTED] before continuing it on the list. 2. Don't feed the troll! Ignore obvious flame-bait. For state and national discussions see: http://e-democracy.org/discuss.html For external forums, see: http://e-democracy.org/mninteract ________________________________ Minneapolis Issues Forum - A City-focused Civic Discussion - Mn E-Democracy Post messages to: mailto:[EMAIL PROTECTED] Subscribe, Un-subscribe, etc. at: http://e-democracy.org/mpls
