Steve Nelson says, > Subject: Re: [Mpls] vacancy does not mean affordable > > BUT it does mean the Bush economy is failing--probably because it is a > corporate-centered economy instead of a people-centered economy. > Corporations don't have to rent apartments.
[MH] Ah yes, as they say, talk is cheap, and sometimes cute. Sorry Steve, but corporations (for-profit and non-profit) not only facilitate the building of homes and apartments (financing/insurance, etc.), they often own them, and they often make them available for lease or rent. And yes, sometimes they even rent them-- all the while trying to stay within a budget. In addition, corporations manufacture and sell useful products and services; they hire individuals, provide salary/wages and various other benefits (hlth, dental, life/accident, pensions, 401 matches...) to skilled workers, and they pay taxes at the local, state and national level. Some corporations even donate hard cash to support community services and local events. In short, corporations provide jobs. It matters little if the Democrats or the Republicans are in control-- one tends to rely on excessive taxes, the other excessive debt, and sometimes government just uses too much of both-- both representing excessive expenses. Remember, the government doesn't produce the wealth, it just taxes it, and uses said taxes to provide the necessary services not provided by the private sector. And, under either Democrats or Republicans, sometimes we experience economic recessions-- businesses cut back, some disappear, people lose jobs, and government revenues decline too. During an economic downturn, when housing rental vacancies are high, it makes a great deal of sense to subsidize rents (people) in existing, vacant rental units for a short period of time-- until the economy improves and more jobs are available-- the Section 8 program for example, or local variations on the theme. The temporary subsidy makes such units affordable, reduces vacancies and helps maintain the value of the housing stock. Subsidize people and fill the existing housing stock. When the economy improves, most people will no longer need the subsidy, and the public expense ends. Contrast that scenario with one where the government builds a ton of new, expensive rental units targeting the low-income niche of the market, which end up forcing the rents of the vacant, privately owned units down, down, down. A scenario that results in a spiral of accelerated neighborhood decline due to accumulating vacant properties-- caused by the reduced rents, deferred maintenance and soon-to-follow declining property values... residential and commercial, followed by reduced property tax receipts, boarded properties, etc. [The boarded properties eventually are bought and the area rehabbed by the government-- after 10-20 years of decline.] And, when the next economic downturn comes along (five to ten years), we'll likely find a greatly reduced supply of private rental units available, and the shortage of housing will re-appear; the cycle repeats. With each cycle, the private investors (landlords) are driven from the local, low-income niche market, and the government becomes the owner and provider of more and more lower-income niche housing-- the supplier of last resort. Private landlords become unwilling to invest when markets are disrupted and investment uncertainty is high; there is simply too much opportunity elsewhere, where growing housing markets are more stable and there is more certainty that a given investment will make money. When private capital flees a local market, that market becomes an endangered species... it could die! The City, and local taxpayers, want to avoid that death spiral at all costs. Granted, these two scenarios represent extremes on the lower-income niche housing policy spectrum. However, for a variety of reasons, the high-visibility, new construction scenario is often the road taken by public officials. I think it often represents the road of least resistance, and, when considered, the long-term impacts and consequences are overly discounted by urban planners and economic development 'experts.' I think it's extremely important that private property owners be added to the affordable housing, low-income niche housing equation-- via active participation. They represent an important variable and should not be excluded. While there may be a need for some new construction, the vast supply of existing private housing stock must also be included in the solution set. I urge discretion by policy makers, as lower-income niche housing policy evolves in Minneapolis and throughout the region. Michael Hohmann Linden Hills www.mhohmannbizplans.com 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
