ManOfDrinks t1_jedk2we wrote on March 31, 2023 at 6:12 AM

Reply to comment by Nutmegdog1959 in Proof that capitalism won’t solve the affordable housing crisis. by No-Ganache7168

None of what he listed amounts to directly providing funds, they're all tax incentives to make building homes a feasible business venture where they otherwise wouldn't be.

Nutmegdog1959 t1_jedlou2 wrote on March 31, 2023 at 6:32 AM

Tax incentives are a waste of time.

Last time an actual good tax incentive program was established it was erased by the Tax Reform Act of '86 (?). That was a 25% tax CREDIT against income.

Trouble was, mostly historic properties that would have been renovated anyway, got renovated. And projects that were so-so didn't get done.

What's needed is for the Towns to select property that they believe would make good affordable housing sites. Do the planning, approvals, preliminary proposed designs, infrastructure and land acquisition. The Towns could finance these 'mini municipal developments' with loans from a State established loan fund or development bank.

Put the projects out for bid or RFP. Build it, then sell it with or without tax incentives such as reduced property taxes for a few years.

This 'completion backwards' principal takes the risk away from the builder or developer.

Developers shy away from Affordable Housing because of the risk. Time from proposal to completion can be years. Price of materials can vary wildly. Interest rate fluctuations. Scarce capital gets tied up, nothing gets done.

It's not that complex. Sitting around, wringing hands, waiting for the 'private sector' to step up is a fool's bargain.

sound_of_apocalypto t1_jeg0b76 wrote on March 31, 2023 at 7:07 PM

I like this idea. There should also be protections in place to keep it as affordable housing.

Nutmegdog1959 t1_jeg9a2l wrote on March 31, 2023 at 8:07 PM

Restrictive covenants in the deed and mortgages with a "silent second" mortgage that needn't be paid back as long as property remains 'affordable housing'.