Serious About Affordable Housing? Try This...

Tonight after our man Hunter gets done with his 'splainin' to the City Commission, the LAIC will offer a little update on its doings. I see nothing good in the agenda packet for tonight's meeting detailing what the LAIC will present -- nuts! I always enjoy analyzing Mr. Chapel's writing.

Perhaps the LAIC will update the commission on its involvement with Randy Schaefer's new Tax Increment Finance District, which has stirred a bit of a buzz, at least among some of my readers and neighbors. The idea of taking some new development off the tax rolls too help ease a private developer's debt burden has certainly raised eyebrows among the patrons of the school district. Superintendent Vince Schaefer was down at the courthouse last week Friday looking for answers on the TID and how it will impact the school's finances.

The LAIC prepared a presentation advocating the TID at the commission meeting two weeks ago that approved the effort. The LAIC also has evidently used its money to acquire some of the land in the TID. Such involvement fits with the LAIC's stated concern about supporting economic development with affordable housing for workers.

However, if there is a proper role for government (city tax dollars pay Dwaine Chapel and fund LAIC operations) in providing affordable housing, maybe there's a slightly better model than declaring a tax increment district for $110K-150K homes. To the folks in suits, $110K may sound small, but for workers making $27K a year, or maybe a family of four just cracking $40K, even that may be too much. Perhaps we should look at putting up even cheaper houses where typical workers can do more than just scrape together enough to make the payments each month. Let's look at some genuine starter housing that lets young working families get ahead, build equity and savings, and work up to a bigger purchase when they are ready.

Let's talk numbers, provided by an eager reader:

Suppose the LAIC concentrated on affordable housing for the blue-collar workers their manufacturing plants bring in. The LAIC could apply for a TID on undeveloped land out by Baughman Park or even up around the new elementary (young families right next to parks and schools -- perfect!). The city runs the infrastructure out there, then parcels up the land into modest lots just right for Governor's Houses. LAIC could even just buy and install some Governor's Houses themselves, like MCCR over in Howard has done. (Those forward thinkers over in Howard will outdo us yet!) $33K for a house, LAIC absorbs what costs it can for basement and other work... we could crank out a lot of decent housing for $60K a pop.

The city could arrange special low-interest/no-interest loans with the buyers, Maybe giving owners an introductory period during which they could just pay principal (there's an incentive for cutting down interest payment that might kick in later!). They could do something like Habitat for Humanity, where owners could pay down their debt up front with a little sweat equity. Maybe we could even arrange for something with TID money where instead of paying off some private developer, that TID money helps each individual homeowner cover the monthly payments, or even the utilities.

You want to involve the government (LAIC, city, county, whoever) in housing? Remember your Adam Smith: the proper role of government is to do those things that the free market can't or won't do on its own. The free market will build houses in the $110K-$150K range -- maybe not on Randy Schaefer's preferred plot of ground, but those houses are going up. It's the really affordable housing that the free market won't touch. Custom Touch Homes won't show you a standard house design that costs less than $60K (and that's the house alone; expect the total cost to shoot right on up to $100K). The local banks hesitate to float loans for houses much smaller than that -- to banks, a house is only worth its value as a fungible asset, not its status as someone's home.

If the free market won't provide enough affordable houses for workers at the wages the free market is willing to pay in this community, then the government of this community has every right to step in and do what it can to make such housing a reality. $110K-$150K? A little work by LAIC and the city can cut that cost in half and turn the TID money away from boosting private developer profits and toward more direct assistance to the actual homeowners who would love some genuinely affordable options.