"Shall the City of Albuquerque issue $10,100,000 of its general obligation bonds in support of the Workforce Housing Act to provide resources towards the construction and rehabilitation of high quality, permanently affordable housing for low to moderate working families, including affordable senior rental?"Wow! Sounds great doesn't it? We're going to use our tax dollars to help working families afford their own homes; and more importantly these patches of paradise will be "permanently" affordable. The Albuquerque Journal Editorial Board (not surprisingly) came out in favor of this G.O. Bond just yesterday.
"This bond represents the first of three installments over the next six years into a Workforce Housing Trust fund. Every dollar from the city's trust would leverage $4 in private money, focusing those resources on Metropolitan Redevelopment Areas and properties along transit corridors.The tricky part is the last part, that says "this program maintains affordability by limiting the amount of equity that accrues to owners and keeping the sales price below the market level for subsequent buyers." The ordinance creating this affordable housing "opportunity" is O-06-8 and was passed just a little over a year ago. The Ordinance explains it this way:
Some programs are more beneficial for the first buyer, who later sells the property at market prices. This program maintains affordability by limiting the amount of equity that accrues to owners and keeping the sales price below the market level for subsequent buyers."
"In a neighborhood with increasing housing prices the goal is to preserve a mixed income environment and avoid the dislocation of low income residents by creating a reserve of permanent workforce housing protected from price increases and danger of converting to market rate housing, allowing renters to own their housing, and otherwise financially insulating low income residents from financial burdens of gentrification while accruing its benefits."What that means is that the city will use our tax dollars to help "low to moderate" income families buy homes that are "protected" from the market, making them "permanently" affordable. In other words, these "owners" will be paying a mortgage on a property that they don't truly own because they won't be getting the equity that is naturally created through time and the free market increase in property value. In short, their financial position will be only slightly better than renters because most of the equity they receive would be the equity that they put directly into the property through their payments.
The result of this type of affordable housing program is predictable; run down properties that have little or no value due to the cap on equity imposed by the affordable housing ordinance. Why would an "owner" invest any of their own money in a property where their investment can't grow? It would be better to rent a house or apartment where the property owner at least has some financial motivation and legal obligation to keep the property in good repair.
Another requirement of this legislation is that "affordable" housing must be included in new developments. Look, impact fees have already added $10,000 to houses being built on the West Side; $10,000 that contrary to assertions by socialist politicians is not paid by the developer but added to the price of the home.
Only government logic can justify raising the price of homes by $10,000 and then complain about the price of homes and the need for affordable housing. Like impact fees, the cost of the "affordable" units will be paid for by the other home owners in the development raising the cost of homes and pushing homeowners out of Albuquerque; and yes, that means more sprawl.
In 20 years, you'll be able to spot the "affordable" eye sores in every development where this short sighted socialist scheme is in effect and the neighborhood slum lord will be the City of Albuquerque. What do you bet that the Almighty Mayor's Safe City Strike Force won't answer your calls when you're complaining about one of their properties?
No matter how you slice it, these ordinances create a series of hidden taxes and fees that are borne by the rest of us. The system is deceitful and dishonest and right now the only way to put an end to it is to make sure the program is not funded.