Yampa Valley Housing Authority to weigh property tax

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Look for extended coverage of this story in the Real Estate section of Sunday’s Steamboat Pilot & Today.

— A task force of the Yampa Valley Housing Authority is preparing to go to its board Feb. 10 and recommend that it ask voters in November to approve a new property tax to fund its ongoing operations.

The contemplated tax would not affect taxpayers throughout Routt County — the YVHA district conforms closely to the tax boundaries of the Steamboat Springs Fire Protection District, minus Milner.

No decision has been made about how many mills of property tax the authority might seek, nor is the amount of revenue to be raised certain. However, the committee took a hard look this week at prospective numbers and the political reality of getting a tax passed.

“We need to strike a balance between creating the right environment to make the housing authority sustainable and capable of fulfilling its purpose and at the same time having the least impact on the taxpayers,” Routt County Commissioner Nancy Stahoviak said.

She is a member of the housing authority’s board and its Strat­­egic Planning Committee, along with City Councilman Scott Myller, Catherine Carson, YVHA Board President Rich Lowe, Housing Authority Program Manager Mary Alice Page-Allen, Bud Romberg and Jody Patten, of Habitat for Humanity.

The committee also looked at a sales tax, but there was little support for pursuing that type of tax to fund YVHA.

“The sales tax — it’s so regressive,” Lowe said. “It includes (city tax) on groceries and utilities.” It impacts “the people we want to help … our charter is work force housing.”

The Yampa Valley Housing Authority has been receiving about $160,000 annually from the city of Steamboat Springs and Routt County. The funds support more than 350 families a year and allows the authority to manage low-income apartments, a mobile home park and deed-restricted housing units, according to the draft of the authority’s new strategic plan. There also is a strong emphasis on providing down-payment assistance to qualified homebuyers.

Since its inception in 2003, it has been expected by local government that the authority would become self-sustaining.

Complicating the task of calculating the proposed tax in spring and how much it might cost taxpayers is the fact that the county’s overall assessed property valuation, and that of the YVHA district along with it, is due to be revised in spring. Local officials are sure the valuation, which forms the basis of tax collection, will decrease in the wake of the real estate crisis.

“I think we need to go for enough (mills of tax) to cover our operating budget and provide the programs we need to do to get people in housing with a little bit extra for new projects,” Stahoviak said. “I honestly think we’re looking at a half-mill, and we’d have a hard time getting any more.”

A preliminary spreadsheet prepared by Carson showed that a half-mill of tax applied to the district’s 2009 assessed valuation of $1.13 billion would generate a little more than $567,000 in revenue. That would result in about $20 of annual taxes on the typical $500,000 home and about $72.50 on $500,000 of commercial property.

But the numbers are due to be recalculated May 1, when the new property valuation of the county goes into effect. Local officials have been estimating that the valuation in the greater Steamboat area will go down by as much as 35 percent.

It’s also likely the committee would recommend that a new tax have a sunset clause that would send it back to the voters after perhaps five to seven years.

“I think we will not have a ghost’s chance in hell of passing it without a sunset,” Stahoviak said.

Carson said it would be incumbent on the YVHA board to tell the voters specifically what it would accomplish with the new tax dollars and be able to demonstrate tangible benefit when the sunset period is up.

Comments

boatski 3 years, 8 months ago

Give me a break, you have got to be kidding me. Look at the increase in your tax bill in a down year with this recession. People are having a hard enough time trying to make it and paying their bills. And look at the price of housing, it's going to get even more affordable. “I think we will have a ghost’s chance in hell of passing it with or without a sunset" Good luck, wake up and smell the roses.

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trump_suit 3 years, 8 months ago

$70K for a Condo in Stagecoach sounds pretty affordable to me.

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greenwash 3 years, 8 months ago

I think it might be time to shutter the doors on YVHA.Sorry but its not really needed at this point in time.

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boatski 3 years, 8 months ago

It should be a non-profit organization, like it used to be. Maybe they should run the Iron Horse and use the profits from that to fund the Housing Authority.

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addlip2U 3 years, 8 months ago

“I think we need to go for enough (mills of tax) to cover our operating budget and provide the programs we need to do to get people in housing with a little bit extra for new projects,” Stahoviak said.

You can't keep squeezing us for $ if you can't live within your own means. If you can't afford to live here~don't.

Are you joking Ms. Stahoviak? Shut this organization down now!

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kyle pietras 3 years, 8 months ago

The YVHA has helped a lot of locals, its main problem is funding. Although housing in our area is much more affordable now, in the future, just like the past this program will be needed.

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Scott Wedel 3 years, 8 months ago

Considering the amount of money YVHA spent on management salaries in the past, I think it is perfectly reasonable and acceptable for YVHA to be funded by the county and city. Certainly the city has enough in discretionary spending to fund YVHA for whatever it is worth.

I also think YVHA has it backwards in asking for a tax increase to fulfill some promises. How about first coming up with relevant programs and then asking for the money to expand them? The most recent articles on how YVHA helped some people get into homes with nothing down is certainly not a program that should be expanded. At this time, I see the need to reform YVHA, not expand it.

I have yet to see what YVHA thinks they are supposed to be doing. Their support for SB 700 would suggest that providing single family housing in SB for those around the median income is a priority. Which means people that own a condo in SB could be paying more in taxes to help others that make more to move into a nicer place than themselves.

And how is the SB boundary going to work? It appears to include the only portion of the county where housing is expensive. So will the revenues be mostly used for housing outside of the proposed district lines where housing is affordable? Or is the money going to be used inside the district to help some lucky people live in SB while everyone else with that sort of income will have to live outside the district?

When created in 2003, YVHA was expected to become a self funding organization, but they were also expected to have widespread popular support and not still be looking to create programs that have broad public support 8 years later.

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Scott Wedel 3 years, 8 months ago

Kyle, I would suggest the one of the biggest problem facing YVHA is that they hired Donna Howell in 2007 only to be forced into a skeleton staffing situation a year later. That their housing expertise failed to notice the start of a national recession and the need for a housing organization in a resort area to start being cautious was a huge mistake. I am not saying they should have seen the depth of the recession and the collapse of local housing prices. I am saying they should have see the signs and taken caution instead of expanding with a well paid executive director.

And they also got involved in land and became real estate speculators.

Sure, they have helped people. So has Habitat for Humanity, Lift-Up and so on. When asking for tax money, the valid measurement is not whether they have helped people, but whether they have a history of effectively using their tax revenues to help people so they have broad public support. The answer for YVHA is "no, not yet".

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pitpoodle 3 years, 8 months ago

Oh for Pete Sake. No SBS property tax. We should not support an organization that does not require people to save for a down payment for their own home. Either have money down or do not expect to buy a house. I agree with Scott W this is certainly not a program that should be expanded with my tax dollars. Bring on the ballot question.

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rhys jones 3 years, 8 months ago

Aw c'mon. folks -- let's help pay for their party!! I saw a lot of this when I worked for a web designer in Craig: Self-serving organizations that do little or no actual good, but have lots of meetings where they talk about the good things they are going to do. Most of them are supported by do-gooders with too much money, who want the tax writeoff.

This time it's different. Now they are asking you, the taxpayer, to pay for their fun. And if you do, then they won't have to find a real job.

Just days ago, we were squawking, right here, about how much money government is wasting already. And now they want more?

If there's one thing that grates me, it's people who don't produce; they just talk. If you think about it, that covers a lot of folks. Just leave me and my computer alone, and don't steal any more of my money than you are already.

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Neil O'Keeffe 3 years, 8 months ago

Poor timing to say the least. I would say there is a snowballs chance in hell of this ever being passed by the voters. The existence and purpose of this organization needs to be seriously reconsidered. IMHO

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1999 3 years, 8 months ago

Pitpoodle...I totally agree.

at the very least require people to save their own downpayment

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Fred Duckels 3 years, 8 months ago

It was inevitable that the Ironhorse mentality crowd would be coming hat in hand with yet another cry for compassion. Too much of our time and money is being spent, and will continue, on micomanaging the marketplace. The national scene should provide ample evidence of this insanity.

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Steve Lewis 3 years, 8 months ago

In our community, if brought to ballot, this will make for a very interesting discussion. And worthwhile. We probably expect the defeat of this measure, particularly amidst the foundational unknowns of this recession. But for exactly the same reason, the unknowns and fog of our current day, this is a conversation well worth having.

Certainly the use of such funding anticipates a future need for affordable housing. Is that correct? What do we expect 2016, and 2026 to look like?

We could further that conversation in this website, with reasons given yea or nea, and help establish for ourselves some frame and understanding of our future going forward.

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Steve Lewis 3 years, 8 months ago

Fred, Your tone is one of useless oversimplification. Put the Iron Horse next to One Steamboat Place and you find similar reason to criticize each. Both concepts went upside down in 2008 when demand evaporated. Given the $100 million loan default at OSP, certainly both are struggling today. Along with a lot of other projects and plans.

And YVHA is hardly "that crowd", or anything like what Rhys describes above. Last I heard, Ed MacAuther was its president. You and Ed have similar politics. Ed certainly puts his own effort and company behind this community, with countless volunteer hours from both. Similarly the rest of that board has put countless hours behind their intention to improve our collective future.

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Fred Duckels 3 years, 8 months ago

Steve, One SB Place is private and they are paying for their decisions. When local government makes a decision akin to the IH they are obligating others to help bail them out. The officials who made this decision can walk away and shrug their shoulders. We have been agonizing over housing seemingly forever. and it seems that we are always behind the curve. Given time the market works as we see today. It is solving problems that an army of do gooders and our money could never do. I realize that AH is dear to you, but would your time have been better spent?

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kyle pietras 3 years, 8 months ago

What's up Scott, When the market was sky rocketing YVHA was scrabbling trying to make a difference. Now they have time to get their ducks in a row. This is the time.

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exduffer 3 years, 8 months ago

C'mon! What's a nickel a day to have another agency that you can legitimately rant at. Look what you pay for this rag and don't say you don't get your moneys worth.

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Scott Wedel 3 years, 8 months ago

Kyle, Yes, when the market was booming YVHA was scrambling to try to make a difference and that is exactly what is wrong with them. They are too often reacting late to current market conditions.

So we agree that YVHA has no consistent vision and thus has not earned broad public support?

I could support a YVHA that has clear measurable plans.

Fred is absolutely correct to note the difference between a private investor risking their money and government officials risking the public's money. Iron Horse was a colossal mistake the second the City of SB considered it, not because the housing market turned downward, but because it put the City of SB into the housing market.

Now that the market turned down, it means that the same time that tax revenues are down and public needs are the greatest, is when the City of SB's real estate investment is losing the most money. Unlike private investors that can go bankrupt, City of SB real estate mistakes burden the citizens for years to come. (If SB needed motel rooms for seasonal workers then they should have put that out for bid and allowed the free market to compete, not buy buildings).

It would seem that successful housing authorities take a slow and steady approach while minimizing their debt and exposure to changes in the real estate market. They expand their programs when they get additional grants, but not based upon market projections. As a government agency that is expected to continue for the long term, then avoiding big mistakes is far more important that having big wins.

That YVHA felt they should scramble to make a difference is exactly why they need to be restructured and reformed. And that needs to be done before they ask for a tax.

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rhys jones 3 years, 8 months ago

Just looking a little closer at the numbers. So a half mill would generate over a half million -- well over 3 times their current budget -- how many mills will they seek? And what will we realize for all this money? Where will it go?

I've got a better idea: No new taxes, and no more YVHA; just take their curremt budget and buy a couple of distressed Stagecoach condos every year, then sell them to deserving local entrepreneurs, who are bringing money into this valley, however slowly, and not taking it out.

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boatski 3 years, 8 months ago

Maybe the YVHA should let us know how they are paying for the 2 million dollar loan on the piece of property they bought in 2006 for $2,253,800. That's got to be $8,000 dollars a month (just a guess) loan payments. And the property is exempt from the $12,000 a year (2006) taxes that the previous owner was paying. So not only are we (the public) paying on a loan on a piece of property that is "underwater", we are footing the taxes on the exempt property. This is all public record, yet never once mentioned in the public.......maybe this could be part of the reason, they want more money from us??? And we thought the Iron Horse deal was bad!

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rhys jones 3 years, 8 months ago

My apologies for that last crack; I know YVHA helps lots of people.

Still, I am a little suspicious of do-gooders, especially those seeking to do so at my expense. I always suspect an ulterior motive, ie, their expenses.

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Scott Wedel 3 years, 8 months ago

YVHA also bought two lots in Sierra View which are also deeply underwater. They bought them early and for whatever reason, failed to develop and put them into the hands of those needing housing, but kept them through the boom and now continues to own them after the bust.

Just more reasons why YVHA needs to restructure and reform before thinking about asking the public for a funding tax. They probably need to consult with some housing authorities that have done a good job of managing resources in order to recognize their mistakes and to come up with better policies for the future.

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Jon Quinn 3 years, 8 months ago

This is a very modest burden on both commercial and residential. The burden on a $500,000 residential property would be $19.90 according to 2009 values, and when it is re-assessed this spring it is likely that number would be about $12.93 if the assessor's estimates of a 35% price decline bear out. About a dollar a month. It is the mission of the YVHA to help bridge the affordability gap by implementing programs like down payment assistance and through the development of affordable housing projects and there is a clear nexus between real estate valuations and this affordability gap.

The recession has brought real estate back to reality, but I do not believe it has solved the problem of affordable housing in our city. In Steamboat we spend a lot of time talking about the importance of community and family. We complain about the high cost of living and are fond of blaming rampant development or poor government for creating the affordability gap, but then we also expect that both of the aforementioned can solve these problems with the stroke of a pen.

I would bet that if this question fails at the ballot, it will be the end of the YVHA. Perhaps some of you would prefer that this was the outcome, but I see that the YVHA is making an impact for working families in our community. It is helping to keep Steamboat affordable for our workforce which in turn keeps Steamboat the kind of town I want to live in. I'll vote yes because I support the mission of the housing authority.

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ftpheide 3 years, 8 months ago

Rhys, I agreed with your original comment . The one before you apology. It wasn't incorrect or harsh. We can do without the YVHA.

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1999 3 years, 8 months ago

so Jon...excatly what does an "affordable house" cost in your opinion.

because I just read the real estate adds and found many many many were quite inexpensive.

also...if people can not afford todays prices perhaps they should continue to rent.

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JLM 3 years, 8 months ago

I wonder who had checked out the brain when these knuckleheads decided to consider a tax on real estate in the midst of a recession.

This is a perfect example of something SBS can live without --- YVHA --- completely.

Shut them down!

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Scott Wedel 3 years, 8 months ago

Jon, If YVHA provides such invaluable services then why won't the City and County continue to fund it? It would presumably be a higher priority than many of the other discretionary programs financed by the City. County's 2012 budget is going to be brutal with the decline in property valuations, but City's sales tax revenues have stabilized at a level that allows for a reasonable amount of discretionary spending.

It is asking the voters a whole lot to pass a tax to better fund YVHA, an agency with laudable goals, but has largely failed to achieve any of those goals. So you are asking the public for a tax, however small, to fund YVHA so that AFTERWARD it can restructure and create programs that have popular support.

I suggest the alternative of while being funded and hence oversight of the City and County that YVHA be restructured to have programs that have popular support and then ask for a tax increase to be able to expand those programs.

Giving more money with less oversight to YVHA can be worse than a complete waste of money. That money could be used to subsidize one project over another and thus scare off private investment in the affordable housing market.

What YVHA needs is the understanding that a housing authority is not a nonprofit development company with laudable goals, that a housing authority does not speculate on buying vacant lots, but that a housing authority is more like a bank that finances specific projects with an investment arm that can buy when there is strong positive cash flow. YVHA's speculative ventures from 2005-2007 have already cost it more money than several years of revenues from the proposed tax.

Thus, while I agree that a housing authority can benefit many residents, the threat of YVHA being disbanded does not scare me. That might be needed in order to later create a good housing authority that understands how to create programs that have broad public support.

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kyle pietras 3 years, 8 months ago

So much passion in this string of comments, mostly criticism. No ideas....

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Scott Wedel 3 years, 8 months ago

You want ideas? Well, I have only seen well run housing authorities from a distance, but it would appear they view their role primarily from the finance side, not the development side like YVHA. When being given money there are many ideas on how the money could be used, so many of the important ideas are to avoid speculation actions and place a far greater priority in preserving the money than on potentially making money.

A housing authority should be primarily concerned with bridging the gap between what people that are excellent candidates for owning a home can afford and what is available on the market. Programs such as down payment assistance for people that have some down, but not enough to qualify for better mortgage terms.

A housing authority should require that prospective buyers are saving for a down payment, but where it is possible to help get them in a few years earlier. It should absolutely not be putting people into housing that have not been actively saving for a down payment. (It could help someone that had to spend their savings for an emergency).

A housing authority should undertake projects only when there is no risk, when the units are all presold (possibly with assistance). Only then should they complete the purchase of the land. A public minded seller could take a modest amount of money for a nontransferable 1 or 2 year purchase option while the housing authority prepared the project.

If the housing authority is going to hold onto land then it must be acquired via gift or grant so that there are no carrying costs while waiting for the future development of the parcel.

A housing authority should only buy rentals when there is clear positive cash flow based upon current conditions, and not based upon projected cash flows.

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1999 3 years, 8 months ago

kyle ....read again ...there are lots of ideas.

namely...restructure and rework and regoal BRFORE the money is given. BEFORE the tax is voted on.

another...people should come up with their own downpayments.

read ALL of the posts again.

you don't see ideas because you don't want to see them.

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Steve Lewis 3 years, 8 months ago

Yes, there are good ideas in the posting above. Some bring a level of detail and depth of argument that lay useful framework. Particularly from Scott W. there is a consistent rationale, extending over many months and through several issues, that we should appreciate.

Jon Quinn deserves similar credit in my opinion. Jon is the only councilor who brings “council-on-your-corner” ethic to his work. Thanks Jon.

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Steve Lewis 3 years, 8 months ago

There are also useless ideas in the posting above. The suggestion that YVHA is a group of people of flawed character or that their game plan always included “looking for a handout” is flat wrong.

A lot of people can now say their judgment was wrong during 2007 and 2008.

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Steve Lewis 3 years, 8 months ago

I’ve helped Fred reduce his over-reaching first comment to something more plausible in his second comment: “When local government makes a decision akin to the IH they are obligating others to help bail them out.”

That allows for an argument over principle. But if you plan to argue a principle Fred, you shouldn’t be cherry picking when the principle matters. For example, did City risk taking matter to you when the City agreed to bonding of base area projects of the URA? You attended that conversation. Did the principle come up for you then?

Scott, whether or not I agree, I think you present a reasoned argument. What do you see is the fundamental difference between City backing of YVHA and City backing of: the community center, the URA, the Orton property purchase, any other non-profit getting City funds, the chamber, the golf course,

What is the principle that works across all of these?

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exduffer 3 years, 8 months ago

lewi, A:He who whines the loudest gets the most (that is if they have the money to broadcast their whine).

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Rob Douglas 3 years, 8 months ago

Here's a little reading for our community socialists: http://www.realclearmarkets.com/articles/2011/01/31/successful_innovation_requires_sound_failure_management_98845.html# While the specific point being made by Frezza in this particular column concerns government investment in industry, the larger point applies to all government investment in areas best left to the free market.

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Steve Lewis 3 years, 8 months ago

Evelyn, It’s fine with me if Fred wins on your scorecard. Rob's similar scorecard has kept me smiling for days, because I like that example of Rob. Ditto when Rob chooses to label his neighbors “socialist” while posting a link. No reply is needed.

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Steve Lewis 3 years, 8 months ago

But Evelyn your posts above and elsewhere do prompt a reply:

Rhys expressed her apology above. She deserved credit for that. It’s not easy to apologize, particularly in public. I cannot think of a better example of civility. But after her apology you went the other way, writing, "I agreed with your original comment. The one before you(r) apology. It wasn't incorrect or harsh."

By your effort, an apology was undone, and an insult reinstated. That is reprehensible.

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Steve Lewis 3 years, 8 months ago

You venture another bad example today.

Per the above you endorse this comment by Rhys: “Self-serving organizations that do little or no actual good, but have lots of meetings where they talk about the good things they are going to do. Most of them are supported by do-gooders with too much money, who want the tax writeoff. This time it's different. Now they are asking you, the taxpayer, to pay for their fun. And if you do, then they won't have to find a real job. …If there's one thing that grates me, it's people who don't produce; they just talk. If you think about it, that covers a lot of folks. Just leave me and my computer alone, and don't steal any more of my money than you are already.” This was your opinion of YVHA two days ago. . Today you posted this: “Did the City Council listen to Ed's advice? He sounds like a reasonable person.
 He is a self-made man and knows what he is talking about.” Evelyn, Ed is the past president and current treasurer if YVHA.

Based on the view allowed by your narrow and uninformed politics, Ed is today a very smart fellow we should listen to, and two days ago a lazy schemer attempting to rip you off.

This time you set a perfect example, albeit a bad one shared by many. You prefer a “win” for what you lazily believed in before the conversation even starts. There is no gray area. It’s clearly black or white, Rep or Dem, freedom or socialism.

Rubbish.

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Fred Duckels 3 years, 8 months ago

Steve, Sometimes you remind me of Robert Gibbs. maybe you are in the wrong field..

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sledneck 3 years, 8 months ago

"No matter how worthy the cause, it is robbery, theft and injustice to confiscate the property of one person and give it to another to whom it does not belong." Walter Williams

NO MATTER HOW WORTHY

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Scott Wedel 3 years, 8 months ago

Steve, I don't really understand your question because I think the City supports those other entities and I am not arguing that the City should not fund YVHA.

I think the better and reasonable situation would be for City to fund YVHA at around current levels if County does not fund it. I think it is entirely possible for YVHA in this housing situation to offer substantial help to enough number people particularly in the area of working with lenders to basically accepting a short sale to the current owners (reducing the mortgage debt as compared to foreclosing and taking a bigger loss). But I think YVHA needs to be restructured to get out of the speculative development business of holding vacant land.

If YVHA is not going to reorganize itself to get out of the land speculation then I would not be terribly upset if that caused them to be disbanded. There is enough of a public need that I think it would not be that long before good housing programs such as counseling would be created again.

Though, if YVHA is disbanded then I think it would be a terrible mistake to give their good assets to the City, but should be transferred to a recreated RALF (nonprofit not controlled by government).

BTW, the City Council's decision to grant Habitat $75K for a riverside duplex lot completely baffles me. Habitat is a great organization, but it seems to me that more good could be done for more people than $75K for two residences.

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Steve Lewis 3 years, 8 months ago

Scott, You have the same view as I do then.

My point is that some of the current debate on YVHA's possible tax is spilling over to a rejection of City funding of non-profits altogether. If fiscal hawks are going to argue against funding of YVHA, based on conservative principle, they should also argue when business friendly organizations like the chamber get funding too.

And Fred, you have a lot to say about the folly of funding non-profits, "do-gooders" I think is your label, but I've yet to hear you complain about the City bonds for the URA promenade, or the funding of the chamber. What is your principle that separates some as so bad and others are just fine? Your loudest complaint is the City taking on their risk or bailing them out. The former is exactly the case in the URA bonding by the City. I don't understand you at all.

But you still make me smile.

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Scott Wedel 3 years, 8 months ago

Steve, I think what people are rejecting is the concept of YVHA and the City being involved with affordable housing because it is a free market and YVHA allowed itself to be a high overhead speculative developer and this City has been particularly inept in its dealings in the real estate market. The linkage policy was about as bad as possible because it was a hassle for developers and the requirement of the affordable units be part of the project instead of allowing them to develop units in a more affordable neighborhood than Main St or base area which caused tweaking with what qualified as affordable caused far fewer and much less affordable units to be built. And it PREVENTED creating affordable units comparable to existing units in a neighborhood where people could see the benefits of the program, but instead buried them out of sight in exclusive developments. Likewise, the Iron Horse purchase, the structure of the bonds and subsequent property management was about as bad as possible.

People here seem to accept the City spending money on just about anything as long as the money buys what it is intended to purchase. From philosophical and potential risk points of view, guaranteeing the URA bonds was a terrible idea, but the public seems to have accepted it because the money was spent directly on construction

But the idea of a tax to better fund an unreformed YVHA in this city is about as popular as laying outside by the pool to catch some rays this afternoon.

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Fred Duckels 3 years, 8 months ago

Steve, Municipal bonds are used every day to finance government infrastructure. The folks buying the bonds are financial people and they investigate thoroughly as in the Base Area situation. In the affordable housing case we had elected officials making decisions based on social justice, speculation, and overestimating their abilities to get involved in wheeling and dealing. Try getting a muny to cover this situation in advance, not hat in hand after the fact. Much of the work that I do is financed by munies, and it is not my job to question. I have been the voice against affordable housing from day one. I contend that it is foremost, a political tool used by self appointed visionaries to advance their agendas.

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Scott Wedel 3 years, 8 months ago

Fred, It was easy for the buyers of the URA's bonds because the City guaranteed them. The questionable move was the City guaranteeing the bonds of a redevelopment agency that is funded from incremental property and sales tax when there are questions of whether the redevelopment agency will have the revenues to pay all the bonds. By guaranteeing the bonds, the City removed the risk from the buyers of the bonds because they transferred the risk to the City's general fund and thus the City's taxpayers.

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Fred Duckels 3 years, 7 months ago

Scott, I don't think that the municipal investors would have any interest in our AH purchases, this serves as warning that maybe we had a foolish deal.

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Scott Wedel 3 years, 7 months ago

Fred, If YVHA's debt on the 40/129 parcel has unfavorable terms then the city could get better terms by issuing municipal bonds guaranteed by city tax revenues and have no problems selling those bonds. Bond investors rarely care where the money is going, but just care about the ability of the funding authority to repay.

That is why the base area URA was in deep problems because the original deal with US Bank stated revenues that the URA did not have when the bonds were signed. So then US Bank, not legally able to avoid releasing the money was forced to send notice of default since the bonds were not backed by the funding stated in the bonds. And the URA was basically stuck until City came to the rescue and guaranteed the URA's refinancing package.

It is amazing to me how you can stand by the URA and denigrate YVHA because the two are in similar situations for similar reasons. Main difference being that City has guaranteed URA's debt while it told YVHA to try to get a tax hike to fix their revenue issue.

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