The New Year brings new construction, as workers brave the January cold to start the first houses in Madison's tax increment finance district. I found a handful of well-layered guys and a backhoe punching a basement into the frozen ground south of Southeast 4th Street yesterday.
And who are the proud owners leading the way in populating the TIF district? You and me, of course. My sources tell me the Lake Area Improvement Corporation is the holder of not one but two building permits in the TIF. Each permit is for a $98,600 spec house.
I appreciate the LAIC putting its money where its mouth is on building quality affordable housing in Madison (and $99K is about as good as it gets for affordable new housing, short of a yurt). But is this particular economic development investment the best use of the LAIC's quasi-public dollars? If there really is a need in the Madison market for affordable houses, wouldn't buyers and builders be lining up to snap up the 11 TIF lots even without a couple spec houses to stir the pot?
I'm sure the LAIC could make an effective business case based on the data from the housing study. But the LAIC continues to keep the housing study under wraps, demanding payment to read data that if publicized might actually make the LAIC's job easier.
Buying two spec houses in this particular development may spark some cries of favoritism, just as the TIF has, as the LAIC invests in this particular housing development but not others. I don't want to get too bogged down in the personal side, but it seems there is any easy way for the LAIC to avoid even the appearance of picking winners in the housing market. What if, instead of buying spec houses, the LAIC used Habitat for Humanity to pursue its goal of affordable housing? (Full disclosure: I live with a Habitat board member, and I've worked on a Habitat house.) Consider the advantages of directing some LAIC/Forward Madison money toward Habitat:
- Non-profit Habitat builds houses the market generally won't, meaning they aren't in competition with Craig Williams, Nick Opdahl, Dennis Miller, or other local developers or contractors.
- Habitat can build a house for around $80K. For the amounts on the spec house permits, the LAIC could fully fund two Habitat houses and spring for a really big barbecue afterwards to celebrate.
- Habitat is a great volunteer effort. When you give money (or sweat) to Habitat, you aren't just building houses; you're building community. Talk about return on investment!