I thought this was about corn syrup.
high fructose affordable housing tax credits.
Lots of people don't seem to appreciate that building high income housing pushes down the costs of housing for low income housing, but people who currently own expensive housing get that really well. I don't know about Texas specifically, because you have to merge onto a kind-of freeway to merge onto the real freeway and that's just not something I'm willing to do in daily life.
4 is true, but I don't know that we need to subsidize high-income housing?
The affordable housing expert quoted seems to be complaining that property firms are taking a big tax break and only providing as much affordable housing as they are required to do in return for the tax break.
I take it to mean they're complaining that Texas wrote a rule which does not demand enough from developers in order to get the incentive.
Affordable housing is either used housing or very small housing. The latter is illegal, and the former has to be built in the past. So we're kinda screwed for a couple decades, but the only way to get unscrewed is to build expensive housing in the hopes that it makes some of the older housing cheaper and eventually becomes cheap itself in a few decades.
8 feels plausible but is not true. There are lots of new apartment complexes built that have some percent reserved for people earning some portion of the AMI, in exchange for tax credits. (LIHTC housing.)
In Texas, inclusionary zoning is illegal, but that's another mechanism to require new affordable units as well.
FWIW, I don't think the mechanisms in 9 scale very well to generate sufficient amounts of affordable housing. Mostly yes, you just need tons more housing built. I'm just saying these other mechanisms do exist.
What I'm trying to say is that LIHTC housing is very common. They get built all the time. It's just that there will be 25 units set aside at 30% AMI for a city that needs 25,000 units at that price range.
||
They surrounded the frightened partygoers and slathered seal blubber on them with mops.|>
I was about to say that should have gone in the other thread, but on reflection I don't see how it could possibly be irrelevant.
Yes - and there is a good argument that affordability mandates are in effect a tax on building new blocks of flats - because you are forced to sell some of the flats for less than the market price - which means you'll get fewer of them, like you get fewer of most other things you tax. The tax breaks will offset this to some extent of course.
"$1 million a year" is so unmoored as to incline me against this professor. That's a lot for a 10-unit property, not much for a 200-unit.
The linked PDF report in the interview is more grounded, though. It seems to say the requirement is that the units be restricted by tenant income, but that income is middle-income (100-115% AMI), their rent itself is often not required to be kept in line with that income (although it may in practice be as that could be fairly close to market rate in Texas, and obviously they need to fill up the building); when it is, it's higher than LIHTC ("traditional" nonprofit affordable housing developments), 35% not 30%, and utilities count on top.
The report notes the group of "middle-income renters making 100-115% of the area median income (AMI)" is "adequately served by the market." This is true in Texas, not so much in California, and it's because Texas builds market rate (increasingly infill as well as sprawl). In California, it's resulted in more pressure to subsidize at that moderate income, which is a losing game.
There is something of a scam going on with bond financing that's being noticed in California - a group has basically constituted its own pet muni-issuing agency, and is buying existing for-profit but aging apartment buildings, adding some light rent / income restrictions, and calling that converting to workforce housing. (I don't think they get property tax exemption - that's stricter in CA - not quite sure there.) But there, the issue is they're paying so much for the buildings they're likely not going to be able to keep up the debt service over 10-20 years (they can now, but not as maintenance needs increase), and the motivation seems all the fees the involved parties get for issuing the bonds and brokering the deals.
8-11: This seems like something that better design and borrowing from examples of more effective jurisdictions will make more scalable. Montgomery County, MD is building faster with its own revolving fund. Linchpins include (1) make it mixed income so it mostly pays for itself, not 100% low-income as public housing used to be* and many LIHTC projects still are, and (2) power of the state to issue cheap debt. (Which is an implicit non-accounted-for subsidy with opportunity costs, but if it gets shovels in the ground I'm not complaining.)
*this design hallmark of US public housing was itself at the behest of the real estate lobby in the 40s - they didn't want competition - and seems to be a big cause of the sorry state and reputation of public housing in decades since
I haven't read the articles yet, but in general you wouldn't necessarily expect a tax incentive like this to result in significantly lower rents than average, unless you mandate that as part of the design of the program. The point of this type of supply-side incentive is to get more housing built, which will reduce average rents over time but those decreases won't necessarily be concentrated in the specific projects that get the incentive. Again, you can mandate that as part of the design of the program, and cities often do, but that often just means developers won't bother and the program isn't very effective.
8-11: Part of what can be frustrating about housing policy discourse (among many things!) is that market conditions are very location-specific and vary a lot from place to place. A lot of the focus tends to be on big cities that are expensive because they have robust economies and terrible housing policies, and those are certainly important, but the issues they face aren't the same issues other cities with other conditions face.
The traveling thing definitely sounds like a scam though.
16: I know MA has started investing directly in projects that are already in process but have run into trouble because of changing financing picture. They get the money back once the project is finished.