Affordable Housing on Tap

I take issue with these places -- and it makes me want to jump on the "Maybe it's better to rent" bandwagon. (Though, I'm already on it personally... just not actively cheering.)

My issue is with the formulas they use -- basically the income maximum to purchase price ratio!

The Bergen Street co-ops (from what I can glean... there's not clear information) requires family incomes over $54k but under $75k and the purchase prices vary between $180 to $350. And, of course, there are maintenance fees... though probably fairly reasonable since it's new construction (but there's still landscaping etc.)

I just see these "moderate income" and "affordable" housing schemes as making sure the residents are living on the edge. Sure, your expenses go down over time relative to cost-of-living/wages, but that takes a long time to get to that tipping point. There is not "forced savings" at the beginning of a amortization schedule and these "affordable" properties are loaded with resale restrictions suppressing the resale prices. It says you can buy a place with an income over $75k, but at the "unsubsidized" rate which -- I'm sure -- adds at least a couple hundred thousand to the price.

These places just seem nice on paper... but I find it hard to think the reality is the same things.

What if the government subsidized *rental* properties instead? Just strikes me as a better use of our tax-payers money... private multi-unit property owners that are subject to "rent control" (but closer to market rates) -- but receive a subsidy to make up for the low rent (and avoid the ills of rent control -- e.g., not being able to afford to maintain your property.) This is just a thought... not well thought out. However, I see this forced house-poor structure of the "affordable" housing as fundamentally flawed.

I know I couldn't afford a $250,000 house (plus monthly maintenance) making $60k in this city.

Posted by: tybur6 at November 6, 2009 10:22 AM

ENY -- Did you even read my whole post? Or did you just read that sentence... it's about the REQUIRED ratio of income to unit price. This is not the free market. These housing schemes require the buyer to have a certain level of income... no more, no less.

Posted by: tybur6 at November 6, 2009 12:55 PM

Oh gawd ENY... it's not "forced" in terms of forced to buy here. It's forced in terms of the income restriction to purchase price ratio *forces* the owner to use a dangerously large portion of their income to live there.

It strikes me as strange that a gov't program is DESIGNED to create a situation where making the monthly payments is a risky situation. The ratio means that you can't save very much and thus not create a buffer if something bad were to happen (like lose your income temporarily).

This is what I mean by forced. Not you live here or we kill you. Forced to live on the edge fiscally... It creates an opportunity to buy, but not the opportunity for stability (at least not for years and years) My point is that this option is NOT "affordable" -- and WE are paying for it. WE are paying for an "affordable option" that doesn't actually improve the lives of those that take the option!

Posted by: tybur6 at November 6, 2009 1:29 PM