Robert Miner: Solve housing

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— Politicians, government bureaucrats and authorities often don't want to define a problem because then they would have to come up with a specific solution. A case in point is the so-called "affordable" housing problem in Routt County. In the past few years, there has been a lot of talk about the affordable housing problem but I've never seen or heard how the so-called affordable housing problem is defined.

Let's define it as housing that is relatively expensive compared to the typical income in the area compared to relative housing costs in most other regions in the country. If that is the problem, the solution is to reduce the typical housing price so housing will then become more affordable for more residents.

Housing prices largely respond to typical supply / demand dynamics. If supply is relatively small for the amount of demand, prices are bid up relatively high. If there is an adequate supply for the demand, prices are relatively lower. The first dynamic is the situation in Routt

County. There is a high demand for housing but the supply has been relatively limited, so housing prices are relatively high compared to incomes.

The solution is simple.

Increase the supply of housing relative to the demand for housing and housing prices will eventually become relatively lower and more affordable for more residents.

Our local politicians and housing authorities have offered two "affordable" housing solutions. One is to require developers to offer a percentage of their new housing stock as relatively lower priced "affordable" homes available to a very small handful of "low to moderate" income buyers. The lower home prices are subsidized by relatively higher prices charged to the unsubsidized homebuyers. This subsidized housing "solution" actually increases the housing cost to the vast majority of middle-income homebuyers in the community who do not qualify to buy the deed-restricted, subsidized homes.

The second solution is for the local government to purchase housing stock and rent or sell it to "low to moderate" income residents at below-market prices subsidized by taxpayer money. Another venture which directly costs the vast majority of local taxpayers for the benefit of a very few.

If our local politicians, government bureaucrats and authorities actually want lower cost housing (more affordable) in Routt County as they claim, they will do all in their power do see that as many new homes are built as fast as possible so the supply of homes will meet the demand. This will be a permanent solution to the affordable housing problem that will greatly benefit all residents of the county, not just a few lucky, "low to moderate" income, subsidized home buyers.

Balancing housing supply with demand is not just one possible solution to the so-called affordable housing problem in Routt County, it is the only solution. To facilitate this permanent solution, all "affordable" housing deed restrictions and zoning requirements should be immediately rescinded.

The city should have a housing authority that is only staffed by individuals who work as liaisons between the government authorities who are concerned with health and safety building codes, utility codes etc. that are necessary for any development and the developers to see that the developers break ground and build as many houses as quickly as possible. The faster the next 200-300 homes are built in Routt County, the sooner Routt County housing will become more affordable for all.

Robert Miner

Steamboat Springs

Comments

Steve Lewis 5 years, 8 months ago

Robert, "Affordable" housing actually has a definition: it costs 30% or less of the owners annual income to pay for it.

You may be surprised to learn we have 15 years of community concensus for planned development - the Steamboat Springs Community Area Plan. If you wish another direction I suggest the 2009 area plan update would be your avenue. That's the route that gives you some education on some history, and your neighbors opinion of your ideas.

There are meetings on this stuff. But it sounds like you haven't bothered.

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Fred Duckels 5 years, 8 months ago

Steve. I haven't bothered either. "Affordable" housing makes politicians feel good and staff can shine up their resumes. Making it all work will take constant micromanaging. We have a city that has gone on record opposing all local gravel pits. I suppose this is to control growth. On the other hand they want a plentiful supply of labor to fuel growth. Big spenders would think twice if this labor pool was not available. Trophy home owners could scrub their own floors. The free market is far wiser than our attempts to do "the right thing". These feel good ideas and shiny resumes need to go the way of the dinosauer.

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Steve Lewis 5 years, 8 months ago

Hi Fred, How does it work then? Don't bother with the meetings and later question the integrity of its result? Aren't you then too late to help guide your community to the correct result?

So you probably missed the 2-3 years of meetings that created the 1995 Area Plan. That's where affordable housing became recommended policy. Hundreds of neighbors you would ignore because.... ?

I did not attend the pit meetings because I was o.k. that others had it well in hand and I could abide with their choices. But didn't a large majority oppose the gravel pits? I admit I don't recall anything being said against "all local gravel pits".

The free market is a great organizing method, but it is NOT capable of wisdom any more than it can promise ethical behavior. Via lack of both, the free market's invisible hand just drove us off a cliff with a very free market mortgage system.

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carlyle 5 years, 8 months ago

Mr Lewis. FNMA and FHLMC, FHA and VA, RTC and CRA are US Government organizations. They are not free market private organizations. And I forgot GNMA, from which FNMA was birthed. The securities and banking businesses are the most highly regulated in the US. Who created the Savings and Loan debacle? If affordable housing policy in Steamboat Springs was created in 1995, that policy should have been tossed after ten years of failed effort. As Mr Miner says, to lower housing prices, ceteris paribas, you have to build more houses.

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Steve Lewis 5 years, 8 months ago

Carlyle, I completely disagree that the mortgage banking industry was highly regulated. It was a hollow shell where bankers and brokers got their cut on sales that should have never made it to paper. Fannie and Freddie bought bad deals already made.

Your version of what went wrong?

AH codes are two years old. Failure is your opinion. I disagree of course.

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Steve Lewis 5 years, 8 months ago

I should instead speak to oversight or review. "Regulated" can mean filing a ton of paperwork, which probably is the case in banking. It doesn't necessarily mean oversight.

In this mortgage meltdown, do you argue there was ample government oversight and review? Its my impression Bears and Stearns problems were not fully disclosed because that level of disclosure compromised a banks competitive position in the market.

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Steve Lewis 5 years, 8 months ago

Getting back to affordable housing, yes the new codes do have rough edges that are being reviewed. But it will succeed.

First Tracks is really the first test and they are now reporting 12 of their 47 deed restricted units reached pre-construction closing recently. The 80% AMI units were the majority of those, if I recall correctly.

Thanks, Resort Ventures West for your efforts to make it work.

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