Surely if we can't have high-speed rail, we at least can have this?
Monday, April 25, 2011
Tax Credits and NIMBYism
On Friday I discussed the recent announcement of WHEDA's tax-credit awards for 2011, and looked at a bit of history with the awards in recent years.
I ended with:
Like it or not, affordable housing and tax credits can be very politicized, especially in local communities with community opposition. I received some feedback from a professional who follow tax credit development issues:
That is not to imply that there was some kind of bias (although there very well could be). For instance, one could take a look at this projection of Wisconsin's aging demographics and argue that there's a legitimate need to begin building more elderly housing in anticipation of the aging boom. Unfortunately, very often communities will plan for affordable housing-but only the elderly-only kind. Much of the opposition in New Berlin, for instance, was only to the workforce portion of the development. This kind of behavior should not be rewarded-communities should be open to housing of all types. Personally, I'm opposed to segregated housing, which elderly-only housing are.
In this vein, a fellow advocate told me:
I also noticed a good number of applications that were withdrawn for whatever reason. I'm sure WHEDA knows this is a continuing issue, and the new director of WHEDA should take steps to combat NIMBYism, especially because often WHEDA's good name is smeared by the opposition.
I ended with:
But keep in mind that there are many developments that never got off the ground because of community opposition, and did not even appear on the lists of applications.
Like it or not, affordable housing and tax credits can be very politicized, especially in local communities with community opposition. I received some feedback from a professional who follow tax credit development issues:
It might be interesting to know whether the percentages of elderly, family, mixed-income and supportive housing for which developers applied the same as the percentages selected. Or did WHEDA staff choose a "disproportionate" amount of one or the other kind of housing? I say it "might" be interesting because the scoring criteria for awarding tax credits are a lot more complicated than just those factors, and the projects selected (from among the applications) could reflect a different profile for reasons other than the kind of housing (based on those categories).
That is not to imply that there was some kind of bias (although there very well could be). For instance, one could take a look at this projection of Wisconsin's aging demographics and argue that there's a legitimate need to begin building more elderly housing in anticipation of the aging boom. Unfortunately, very often communities will plan for affordable housing-but only the elderly-only kind. Much of the opposition in New Berlin, for instance, was only to the workforce portion of the development. This kind of behavior should not be rewarded-communities should be open to housing of all types. Personally, I'm opposed to segregated housing, which elderly-only housing are.
In this vein, a fellow advocate told me:
I spoke to a LIHTC developer recently who confirmed to me what we already suspected – “Mayoral support makes or breaks it.” He said if they don’t have community support, they will never submit their application. That’s how WHEDA can always downplays the role of community support, application are never denied because of it – THEY ARE JUST NEVER EVEN SUBMITTED.
I also noticed a good number of applications that were withdrawn for whatever reason. I'm sure WHEDA knows this is a continuing issue, and the new director of WHEDA should take steps to combat NIMBYism, especially because often WHEDA's good name is smeared by the opposition.
Sunday, April 24, 2011
The Case for More Government Regulation
The Journal-Sentinel published a story about a homeowner who did everything right, and yet is still being foreclosed on.
While a judge stayed the foreclosure proceedings to give Mr. Williams more time to find a solution, I ask...why is this Mr. Williams' problem? He's not the one who screwed up. He's not the one who took the money from the refinancing and used it for something else rather than paying off the original loan. This should be resolved entirely by the companies involved, including the title company.
Maybe if the government had stronger regulations on the lending companies, maybe if there were more standards holding people and companies accountable, this guy wouldn't be facing the loss of his home.
Update here.
Keon Williams is on the verge of being thrown out of his house - a startling turn of events, considering that for nearly three years since refinancing in 2008, he faithfully paid his monthly mortgage and his property taxes.
....
The problem: When Williams refinanced with Wauwatosa-based Central States in 2008, cutting his 12.5% interest rate nearly in half, Central States' affiliate, Interim Funding LLC, didn't pay off the original mortgage. Battered by the housing crisis, it took the proceeds from the refinancing and paid other lenders....
While a judge stayed the foreclosure proceedings to give Mr. Williams more time to find a solution, I ask...why is this Mr. Williams' problem? He's not the one who screwed up. He's not the one who took the money from the refinancing and used it for something else rather than paying off the original loan. This should be resolved entirely by the companies involved, including the title company.
Maybe if the government had stronger regulations on the lending companies, maybe if there were more standards holding people and companies accountable, this guy wouldn't be facing the loss of his home.
Update here.
Friday, April 22, 2011
WHEDA Awards Breakdown
I decided to do a calculation of the 2011 awards.
Overall, I have to say I'm surprisingly pleased with the numbers; I actually thought there would be more elderly housing funded than there were. I'm curious, though, about the mixed-income housing; in my belief, they should have market-rate units mixed in, but only one of two has any market rate units, and even so, only 11 out of 72. I would prefer to see substantially more market-rate units. The mixed-income development without any market-rate units is Bradley Crossing in the Village of Brown Deer which will be targeted entirely to persons with disabilities, so "mixed-income" in this sense likely means that the development also has subsidies for people with extremely low income who usually can't afford the typical tax-credit unit.
In Waukesha County the previous years' results (that is, awarded, but not necessarily built) were:
If I had to theorize, I'd say that land costs made affordable housing in Waukesha County very difficult until 2009 when extra funding was available through stimulus funding, and then in 2010 and 2011 we had the economic crash which brought some properties into range for some developers. But keep in mind that there are many developments that never got off the ground because of community opposition, and did not even appear on the lists of applications.
- Elderly/Majority Elderly: 7 developments for 338 units with a total of $3,562,740 tax credits
- Family/Majority Family: 19 developments for 919 units with a total of $11,364,408 tax credits
- Mixed-Income Housing: 2 developments for 121 units with a total of $1,899,587 tax credits
- Supportive Housing: 1 development for 35 units with $232,947 tax credits.
Overall, I have to say I'm surprisingly pleased with the numbers; I actually thought there would be more elderly housing funded than there were. I'm curious, though, about the mixed-income housing; in my belief, they should have market-rate units mixed in, but only one of two has any market rate units, and even so, only 11 out of 72. I would prefer to see substantially more market-rate units. The mixed-income development without any market-rate units is Bradley Crossing in the Village of Brown Deer which will be targeted entirely to persons with disabilities, so "mixed-income" in this sense likely means that the development also has subsidies for people with extremely low income who usually can't afford the typical tax-credit unit.
In Waukesha County the previous years' results (that is, awarded, but not necessarily built) were:
- 2011: Three applicants for elderly housing; one received funding, all elderly housing.
- 2010: MSP Development had two awards (one family, one elderly) in New Berlin which has been fought off by New Berlin residents; lawsuit pending There were two other unsuccessful applicants, both for family housing.
- 2009: WHEDA had a large number of tax credits available thanks to the stimulus funding and Waukesha County awardees were Hampton Regency (Butler, 119 units) for elderly, Oak Hill Village (Waukesha, 158 LI units) for elderly. Listed also as withdrawn was Buena Vista Senior Housing in Menomonee Falls (56 units Low-Income) which I suspect changed its name to Alta Mira which did receive tax credits in a later round. Highlands at Meadowbrook (23 LI in Waukesha) for elderly is listed as "on hold" in case funding later becomes available. There were no other applicants that I can see. No family applications.
- 2008: No applicants for Waukesha County.
- 2007: No applicants for Waukesha County
- 2006: No applicants for Waukesha County
If I had to theorize, I'd say that land costs made affordable housing in Waukesha County very difficult until 2009 when extra funding was available through stimulus funding, and then in 2010 and 2011 we had the economic crash which brought some properties into range for some developers. But keep in mind that there are many developments that never got off the ground because of community opposition, and did not even appear on the lists of applications.
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