Robert Miner: Get rid of agenda

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Get rid of agenda

I'm sure all of our local politicians and bureaucrats celebrated Independence Day. July Fourth should be a celebration of American freedom, independence and self-reliance.

Were our politicians and bureaucrats celebrating in good conscience the independence of American citizens that is based on self-reliance and lack of government interference, which leads to our free enterprise system, which leads to the most prosperous nation in recorded history?

How can the Steamboat Springs City Council and other local government bureaucrats celebrate American independence yet aggressively promote a socialist agenda - to each according to his need - through its so-called "affordable" housing initiatives, zoning and other policies?

"Affordable" housing as promoted by our local bureaucrats is subsidized housing in one form or another. All of the subsidized housing schemes are wealth transfer payments of some kind. A very limited number of housing units are subsidized from taxes or by requiring a large portion of home owners to pay a relatively higher price for their homes in any development to subsidize part of the home cost of the so called "affordable" homes.

If the objective of the subsidized (affordable) housing schemes is to make available lower-cost housing, they have precisely the opposite effect to the community at large. Because unsubsidized housing ("market priced") must be priced relatively higher than the price in a free and unsubsidized market in order to cover the cost of the "affordable" housing subsidy, the majority of buyers must pay more for their housing to pay the difference of the below market priced, subsidized housing.

These subsidies have a much more costly, long-term effect to the community. Because the unsubsidized homes are sold for a higher price than they would be sold in a free market of unsubsidized homes, the relative values of all comparable properties in the community are raised. The result of the "affordable" housing programs is the majority of the homes in the community are priced higher than they would be if there were no subsidized housing programs forced on developers. The result is exactly the opposite of what the "affordable" housing bureaucrats claim they are striving for.

All costs of the affordable housing initiatives are passed on to the home buyers of the "market priced," unsubsidized homes. Plus, all of the additional costs born by the developers to comply with the "affordable" housing laws are also added to the price of the unsubsidized homes, making them even more expensive and further raising the price of resale homes, which are priced by comparable sales of the higher-priced, unsubsidized homes.

Our local politicians and bureaucrats who are forcing the "affordable" housing programs on developers in our community are in reality making housing relatively more expensive for the vast majority of the community. Not just for new home buyers in developments that must mark up the price of the unsubsidized homes to cover the subsidized cost of the "affordable" home but for resale home buyers as well through the higher comparable sales prices. All because of the socialist ideals of our local politicians that could not be further from the principles of independence and self-reliance that we celebrate each July Fourth.

This community was founded by independent and self-reliant men and women who took great personal and financial risks to found a ranching community. They succeeded or failed on their own terms. This community has thrived and prospered because of the initiative and sacrifice of men and women who developed the ski and tourism industry into a prosperous community for all.

If our local politicians and bureaucrats truly believe in the principles of independence, self-reliance and free enterprise secured at such great cost by so many of our citizens over so many years, they will revoke all "affordable" housing laws, initiatives and deed restrictions. Only then can they in good conscious celebrate Independence Day in 2009.

Robert Miner

Steamboat Springs

Comments

Steve Lewis 6 years, 2 months ago

Robert, The cost of affordable housing to a developer is around 2-4%. Steamboat's market appreciated more than 10% for several years now. I'd say the developer is getting what the market will bear, not pricing his product only according to costs - your theory.

And its not about socialism. Its about workforce and a sound economy. For instance a recent study of the energy industry effects on our region found:

"Eagle, Pitkin and Routt counties: These resort and retiree dominated economies sit on the periphery of the study area (energy rich Mesa, Garfield, Rio Blanco and Moffat counties). For many years, study area communities offered a relief valve for resort driven employee housing. This absorption capacity is largely gone and the resort area counties will have to act much more aggressively to find and house workers."

That from the Executive Summary of the "Northwest Colorado Socioeconomic Analysis and Forecasts" study recently presented to city council.

http://www.agnc.org/reports/08-socioecomic/agnc_executive_summary_4-07-08.pdf

Steamboat was the last major Colorado ski resort town to adopt an affordable housing ordinance. -Steve Lewis

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Steve Lewis 6 years, 2 months ago

Also, The current Steamboat ordinance is like many others. In particular the developer is required only to provide housing equal to the new, permanent workforce his project will add to the community. -Steve

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submariner 6 years, 2 months ago

I can see Mr. Miner's point yet there are some things I disagree with. After all the housing market changes consistently. Years ago it was not uncommon for a first home to be a trailer. Communities decided that trailer parks are "undesirable" so even building them became an endangered practice. (Find one in Steamboat that wasn't built in the seventies.) Affordable housing in Steamboat is really frustrating to me, as a person that doesn't make the amount of money developers are aiming for. It appears based on what the paper printed about Wildhorse that they are aiming too high. Their target apparently already owns a home and only wants to buy as an investment. (Something to flip.) This is completely the opposite of what the aim should be. Maybe the city or government should not regulate it, but I bet that years ago, banks and lending institutions cut home buyers a deal, that cost someone else money. As a local I am tired of seeing places go up that will be empty most of the year. It is time to help the people that really need it and not the ones that are just looking for a boost to their bank account.

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Hadleyburg_Press 6 years, 2 months ago

"It is time to help the people that really need it and not the ones that are just looking for a boost to their bank account."

Submariner, Feel free to help those people that you feel really need it, please just don't use my money to do it. I would prefer to be the one to chose which charities I give to.

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sieverding 6 years, 2 months ago

Dream Island was called that because when it was first built it was considered to be wonderful

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bubba 6 years, 2 months ago

submariner, the developers are not aiming for prices on affordable housing, the Afforable Housing policy sets the price, as a function of median income. The policy aims to ensure housing for a group of people deemed desirable by the government, who make between 80 and 120 percent of the median income. Sounds like you don't fit that description, but that doesn't mean the developer is 'aiming too high' as you put it. I also believe that the policy is designed so that the units must be owner occupied, and there are appreciation limits, so your claim that people will 'flip' them for a profit appears incorrect as well.

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Steve Lewis 6 years, 2 months ago

Bubba's description is right.

I agree Submariner's point is wrong on the flipping, but I'm beginning to believe he is right about "aiming too high". Wildhorse's target affordable buyers have higher income levels that are so near to managing the purchase of free market units that they are less attracted to Wildhorse's deeed restricted units. The gap between free market and deed restricted prices is too small.

I understand that gap increases with more bedrooms in the units. (It also increases at lower income targets.) Since the ordinance is on a unit count basis, there is zero incentive to build the larger units. One ordinance change considered is to switch to a square foot basis. That would bring larger units.

Another factor is these Wildhorse units don't exist yet. Its easier for Wildhorse's other wealthy clients to put down $$ and wait for those pretty lines on paper to become your second home in 18 months. These lower income buyers are said to start buying in the 1-3 months before completion, when they can see the product in place. -Steve

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Steve Lewis 6 years, 2 months ago

Hadleyburg Press, I agree your taxes do go to the City staff that works on this, and to that $ amount the City gives YVHA each year.

Suppose by 2010, their work and these ordinances have created 200 workforce housing units in the city limits. Would you rather that those workers drive in from Hayden, Craig and Oak Creek? Or what do you suggest? -Steve

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SilverSpoon 6 years, 2 months ago

Lewi, If you take equity appreciation out of affordable housing does it still make sense?

Loui antonocci is listing a sunray meadows at $445 for 2 bedrooms. Is that affordable(only $220k per bed)? Since it was tract housing i would assume that it should be.

Is it affordable for someone to rent 2 bedrooms at Iron horse for $1800/month? Is it affordable to bulldoze Iron horse($7 million scraper?)

Just a hypethetical, a 1 bedroom "affordable" unit sells for $200,000. It is allowed to appreciate 3%(despite the economic downturn accross the nation). If the individual had $40k to put down, the payment would be 1100/month plus 200 for dues. $1300/.4*12=$39000/yr salary. 40% of earnings goes to housing, which is not affordable. So, for 5 years, this individual, would have paid $78,000 and made $32,000 in equity gains, and $3000 in principal gains. So, in 5 years, you lose $43,000 and are still without your $40k down payment. I think if people wanted to lose $720/month, they should be able to do so on rent, and keep their $40k in their pocket(not that anyone in steamboat has a savings).

"Affordable housing" preys on those too ignorant to know how bad of a deal it is. And the developer can extort the feds for low income housing funds that were intended for New Orleans, or other cities with real poverty. And the developer can take advantage of subsidies from the local govern'ment, and the realtors in that government can collect their piece of the pie when they sell to the poor 80% AMI people in steamboat.

I am no donna howell, but I just can't make the numbers work. Iron horse is a prime example, of the local government robbing from its citizens to push its real estate agenda. I don't care how "affordable" a house is, a tank of gas costing $100 will force even the steamboat "real estate bubble" into foreclosure.

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Steve Lewis 6 years, 2 months ago

Silverspoon, I won't have time to respond to the hypothetical calcs til Friday.

Deed restricted with a reduced price is, for many, the only way to stop paying rent and start their own equity in Steamboat.

It can be used as a step to something of more equity later. Without the deed restricted unit, it can be impossible to ever own in Steamboat for people whom we need to own in Steamboat, because we, and employers, need their services. -Steve (lewi) Lewis

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Hadleyburg_Press 6 years, 2 months ago

Lewi, I am actually in favor of the City securing housing for "our" employees if you can breakdown the numbers and show me that it can done as a financially sound investment. I think it can. I see it as a standard business investment that allows the City to continue to offer the services that we want it to, well into the future. An increase in other benifits and wages may be more cost effective and a greater enticement, but I would need to crunch numbers to come to that determination. It is a concept not too dissimilar to the Feds providing base houseing for military personel. This is a slightly different animal from the City seeking to subsidize housing for other businesses (non- governmental) employees don't you agree?

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Steve Lewis 6 years, 2 months ago

Hadleyburg Press, I'm just sitting down to the numbers Silverspoon put above, but apreciate your last post. You raise two important points: 1) Is affordable housing a sound investment? 2) Should we be subsidizing housing for the employees of our local employers?

1) Its like tracing the economic benefit of road maintenance, or adding new roads, around Steamboat. I think long term, increased reliance on an employee base that drives 20+ miles to work here is unsustainable and unstable. Therefore the investment is sound. Per my first post above, we are currently asking the developer to invest in housing his own impacts. Other effort by the City for "catch up" would be an investment of your taxes.

2) As at Iron Horse, the employers should pay market rates, and not be subsidized. But partnerships can get both public and private sectors further than either will alone.

First Track's (Wildhorse) deed restricted units embody the basic question -"does it work". Per above, I wouldn't agree First Tracks is a failure until built units go unsold for a year, as the ordinance states. But if failure occurs my prefered remedy is First Tracks is allowed to sell to employers who would then rent units at reduced rents. The employers should pay "near" market price, Wildhorse should get the current deed restricted price, and the difference goes back into the affordable housing machine.

"Near" refers to the value, to the employer, of a unit he must rent below market, but also will get employee security from. The reason I like this "escape" route is it creates rental units for lower AMI's, the units stay affordable, and the escape clause contract we have with Wildhorse is honored. -Steve

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Hadleyburg_Press 6 years, 2 months ago

Lewi, Why should developers carry this burden? Aren't they just building to what the market will bear? It is the consumer that sets demand, not the builders. Why shouldn't businesses that need employees adjust their wages to allow employees the ability to live within a reasonable distance from their work place. If the businesses fail, then the customers will have determined that the service or good was not needed locally or at that price. Healthy competition and business evolution no? If the loss of these goods or sevices dimishes the appeal of Steamboat as a community, then the cost of land will stabilize or retreat. This is how an unfettered economy works. My argument here is specific to the private sector as I have already agreed with you on the public employee housing issue at first blush.

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SilverSpoon 6 years, 2 months ago

The short of it, the market is already saturated with homes for sale, fuel costs cut into the money available for a mortgage. Real estate is ALWAYS a gamble. You can't hang your hat on a 10% gain per year in real estate. The realtors who use a trendline to present Steamboat as a "great" investment, will need to stop at 2007. The 2008 value will be a sharp decline in every area. Price and volume.

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Steve Lewis 6 years, 2 months ago

Silverspoon, I looked at the program at Sunray. They asked 5-10% down. Your other numbers are close.

So its not the loss you describe, but I accept your larger point that the equity return takes years to realize. While the owner would then be able to take that equity elsewhere profitably, its a stretch to say that owner would then be in a position to buy in Steamboat's free market which looks to appreciate even higher.

What that leaves me to ask is: Are there enough rentals, as you assume? I don't see the private sector going there today or tomorrow. And are higher valued, long-term Steamboat workers going to be content to build NO home equity?

I still believe we need to afford lower income owners and renters a place in Steamboat. Otherwise our economy will suffer far higher costs than this housing would cost. -Steve

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Hadleyburg_Press 6 years, 2 months ago

"I still believe (we) need to afford lower income owners and renters a place in Steamboat. Otherwise our economy will suffer far higher costs than this housing would cost."

Again, why should anyone have to subsidize and not the employers? Smacks of government forced redistribution of weath to me.

The way I see it, it is either a government sponsored charity or government subsidation of the private sector.

Also, could you elaborate on those quantifiable economic costs please?

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Steve Lewis 6 years, 2 months ago

HadleyBurg, The developers' projects are introducing this new permanent workforce. Housing that workforce is a fair mitigation they should and have assumed.

It does look like a possible retreat in values here, Silverspoon. I think that relies more on the condition of Wall Street and oil prices than than the tightness of credit. if I'm right the last two days make this retreat less certain,... but its only two days news. We'll see. -Steve

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bubba 6 years, 2 months ago

OK, I'm not really a supporter of affordable housing, except in that I believe the policy has contributed to my home's appreciation, BUT:

The government is not trying to subsidize investment, they are trying to subsidize housing, so analyzing it as an investment does not make sense.

And, Silverspoon, according to your numbers, it is costing someone 720 dollars per month for five years to live in Steamboat. The cost cannot be 40% of income, I think the max is 33%, so either the HOA or the price has to be lower, so your number is high, and if you factored in tax breaks on mortgage interest, the first five years would probably average more like 475 than your 720. Even disregarding the 33 vs 40% income thing, this is a better deal than renting, if people are committed to living here for the 5 year duration, and the savings increase with time.

And furthermore, on your sky is falling assertion that 2008 will show a decline in every area, price and volume- can you support the price part at all? We've seen a dramatic drop in volume, but I have not seen any evidence that prices have come down on units that are selling; some places that were ridiculously overpriced are now 'price reduced,' but using the assessor database, I have seen no statistical evidence to support your claim. Have you?

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Steve Lewis 6 years, 2 months ago

HadleyBurg, The study I referenced above forecasts rising housing costs and short supply. The higher wages to our west will be harder to compete with.

With no affordable housing the highways will bring the future workers to work here. I don't believe that's sustainable.

Have a nice weekend. -Steve

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Hadleyburg_Press 6 years, 2 months ago

Lewi, Lastly, and I thank you for the dialogue, how are developers introducing a new permanent workforce? You obviously do not mean the construction workers, so who do you mean? If these are vacation homes, second homes, investments, or even locals uprading, how does that contribute to the workforce population density. Let's for a minute assume that you are correct, I still don't see your point. If there is a burden on infrastructure being established by new residents then aren't they going to mitigate that by paying taxes?

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Hadleyburg_Press 6 years, 2 months ago

Do you mean the businesses that will be serving those new developments, such as property management companies et al, that will be adding to the workforce population? If so, shouldn't they be the ones who pay the premium by adjusting their wages upwards to be able to provide these services?

Okay Steve, I'm done. And again thanks for the conversation. It is appreciated and I too wish you a good weekend.

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