> All of the public funding for Armadillo Flats is in the form of loans.

I am surprised that a "grant" must be repaid.  Why isn't it called a loan?
I assume the terms are very favorable or you would have gone with
conventional financing?

> 0 BR  $363 PPL actual    $469 Cullen
> 1BR   $490 PPL actual    $599 Cullen
> 2BR   $537 PPL actual    $699 - 739 Cullen
> 3BR   $696 PPL actual    $950 Cullen
> 4BR   $913 PPL actual    $1190 Cullen

I am glad to see you are charging less than is allowed by the MHFA ARIF
program.  The difference between the rent you charge and my market rate
buildings range from $1272 to $3324 per year.  This correlates closely to
the Ron Feldman report from the Mpls Federal Reserve where he argued that a
subsidy of $2000 per year per family would move most people from
unaffordable housing to affordable housing.

Why would we want to limit the options of low income folk to a few
subsidized buildings?  Why not create a program like "rent stamps" for low
income families that could be applied to rent at any building?  Section 8 is
the closest we have now.  However, the program is badly under funded and has
policies that allow private LLs to opt out.  If it was only a rent subsidy
without the additional processes and procedures, then private LLs could not
opt out without violating discrimination laws.  This question/comment is
clearly not something your or I can solve, but I would love to hear PPL's
opinion on the matter.

> The rehab scope has been substantial, including new roofs, exterior =
> siding, windows, kitchens, baths, interior finishes and come Spring, =
> landscaping.

And you did a great job too; the building is beautiful.  I am also rehabbing
my Whittier building.  I have a second mortgage on my home to pay for it.

> With respect to vacancies, you cite the rates for the cheapest and =
> therefore smallest apartments.

The same 8-Oct-03 article said the vacancy rate for units priced from $700
to $799 is 6.6%.  I think the softness is throughout the market.
Personally, I am having more trouble filling the large rentals.  For the
first time in years, I have had empty 4 br rentals all year long.  I might
be an anomaly to the market, but I doubt it.  If you have people on a
waiting list for 4 br units that will live in St. Paul, have them contact my
St. Paul office.  The number is 651-774-2455.  I welcome section 8 and -- to
show how hungry I am -- will lower my 4 br rent to $950/month.

> It will no doubt come as a relief that I won't respond point-by-point

I appreciate that a point by point response is tedious for all.  But, I
would still love to hear PPL's thoughts on building low income housing
outside of impacted neighborhoods.  And why we need to build when vacancy
rates now show an oversupply of housing.

I greatly appreciate you comments.

Regards, Bill Cullen
Whittier Landlord.

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