Sunday, May 08, 2005

Here's backward thinking for you. The city of Fort Wayne gave empty lots to a not-for-profit, kinda like our City Builders. The not-for-profit tried to fix people's lives and build some houses, sure they increased appraised values, sure they used government grants ... like they should have. Then the government came down on them and sued them for 'inflating' values on houses, shut them down ... and the city took back all the lots. Go ahead and read all about it.

Now the government is out $208,000 and private banks are out some money and Fort Wayne is going to use this new "Synergy" program to take over and do it "right".

Come on cant we all think this through, the government is terrible at fixing people's lives, and in this case they got in the way of a group that might have been successful.
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2 comments:

Anonymous said...

Its a tricky thing trying to inject new, valuable housing into a deteriorated area. Appraisals aren't always enough to cover the cost of the new homes--thats where the forgivable loans or grants come in. They get used to reduce the buyers private bank loan amount to a level thats covered by the appraisal (and hopefully one that they can afford).

I don't know the specifics of this Ft. Wayne housing group, but among other Non-profits in housing my sense is that prices are sometimes inflated so as to support the non-profit, who may or may not actually be doing much to create that housing. The buyers qualify for all this grant money, and since its forgiviable, the nonprofits figure it won't hurt the buyer if they keep a good chunk of that for themselves in "development costs".

So, insted of actually making the houses significantly more affordable, the grants fund agencies that facilitate the work of bankers and builders in areas where they would otherwise never set foot.

Thats where we (City Builders) are trying to be different. We're not just facilitating others' work and surviving off of grants that are meant to reduce the total cost of housing, we're actually building the homes for less, and making them even more affordable through grants.

The other thing with the Ft. Wayne group is all the properties they held. How many homes did they build/rehab in a year that they needed, what was it, 175 properties?

Lake County is cracking down big time on property tax exemptions because they realized that by giving exemptions all over the place for reasons political and otherwise, they have been creating their own recent fiscal nightmares.

Of course nonprofits need land to work with, and they shouldn't be taxed, but Ft. Wayne's idea of holding the land and releasing pieces of it at a time in accordance with a well developed revitalization plan seems OK to me.

10:22 AM
daltonsbriefs said...

Good thinking Adam, stay on top of these issues. If you run across other cities that are having success let us know and I'll post links.

We want people to have access to housing ... we want to help people fix their credit and equity problems. Now it's a matter of using all our resources to get there.

9:44 AM

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