November 24, 2012

Affordable Housing 101

Lets take an example of a 3 unit building that will cost an agency 500,000 to redevelop:
  1. buy the property
  2. then sit on it up two years or more
  3. apply everywhere for grant monies to build afforable housing
  4. assemble on average 90% of the monies you need in grants (450,000)
  5. 50,000 of your own money into the project

3 years later the project is done and the agency only has 50,000 invested and need to rent the three units out to tenants that meet the "affordable" guidelines so as to not have to pay back the 450,000.

Here is my question imagine if we were able to take the same 450,000 and:

  1. give it out to current home-owners (there are tons) who meet income guidelines to repair their houses like we did with the NRSA. There is a huge need.   
  2. give these monies in matching monies to qualified people to buy one of the many vacant houses in the city.

The question here is what is the highest and best use of the monies, in this example 450,000.


jpm01609 said...

we have learned from the housing crisis of 5-6 years ago that there are a lot of ppl who can't or don't want to own a house.

the idea of ownership is overwhelming to them for various reasons. Home ownership is not for everyone.

Work has to be done, stuff fixed, schedules met, etc

For these type of ppl, I would recommend they stay renters.

For the landlord wannabe, it only takes a few months missed payments by the tenant(s) to snowball into further crisis: late payments, higher interest, etc.

There are tenants who take advantage of landlords, and in most cases landlords never get paid.


Jahn said...

<<<<Agress 110% w EPB

Bill, since when does a non profit, gub'mint funded builder of low income housing biuld 3 units of house for a mere $500,000?

Seems to me the average low income housing unit comes in somewhere between $250,000 to $500,000? IMagine I can buy a nice 56 foot, 2.5 story, brick colonial over in Westwoods Hills for how much.........maybee less that waht it costs to build low income housing in Worc's Best Ghettos?