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The St Louis Contrarian

Providing Independent and Intelligent Insight on St. Louis Public Policy Issues

Archive for the category “homeownership”

Garbage Research

I continue to be appalled by some of the garbage research that gets published in the name of social science and urban development. A recent one was published by The Brookings Institution titled The Devaluation of Assets in the Black Community. This is certainly a provocative title.

The research presumed to show that single family homes in the black communities are worth less than comparable houses in white communities. This is something that is hardly a surprise. These differences can be explained by lots of reasons, most prominently crime and schools. The authors made elaborate adjustments to properties and concluded there must be other reasons than the usual real estate ones for the difference in price. That difference of course was race.

If they could have shown comparable neighborhoods where everything was the same except race they could have made a point. Of course, they didn’t do any such thing.

My real problem is the concept of devaluation which assumes there is a proper value for any piece of real estate, or anything else. I could argue my house in St. Louis is devalued compared to San Francisco. These comparisons are meaningless. In St. Louis, black families moved out of historically black neighborhoods in huge numbers for reasons I stated, safety and good schools. Hardly surprising. Written by Paul Dribin

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Vacancies in St. Louis

As you may know, there has been a collaborative formed to address the huge vacancy problem in St. Louis. Various task forces are meeting and I participate in two of them. Most of the people at the meetings appear to be community activists with a smattering of developers.

The discussions have generally been good but rather general in nature. We do not seem to want to address the key problems which I see as:

1. Outmoded methods of management and sales by LRA.

2. The higher cost of doing business in St. Louis.

3. Historical preservation

4. Crime

5. The overall oversupply of housing and undersupply of population in the region.

6. The unwillingness of the group to accept demolition.

Written by Paul Dribin

Green lining in St. Louis

I heard a talk today at one of the many marginally useful meetings on vacancies in St.Louis. The discussion was about green lining, an effort to artificially prop up property sales by financing the gap between appraised value and total development costs on single family houses.

The issue as presented seems dubious; that tons of people are waiting to do major rehab to houses on the north side who can’t get the appraisal they would need. The green lining program would put together a pool of institutional funding that would provide second mortgages to fund the appraisal gap.

There are several problems with this approach. The first problem is that the homebuyers would immediately be under water. What if they want to sell the property and cannot pay off the mortgage. Second, the proposal does not address credit issues which I think are a bigger problem than appraisals. The program should go all the way and guarantee the purchaser’s equity. But the real issue is creating demand in an area with high crime and poor schools. Written by Paul Dribin

McKee Again

The Paul McKee effort on the north side of St. Louis appears to be going nowhere. I have been a fan of Mr. McKee and was impressed with his work at Winghaven in St. Charles County. I still believe him to be a sincere person.

The project he tried to undertake in St. Louis may have been too big for anyone to handle and he faced obstacles of community and political resistance. He certainly made his share of mistakes, especially in not engaging the community in a better manner. Nevertheless, he has not lived up to his commitment, has rehabbed almost no houses, and has needed the Geospatial Project buying out his properties to save him. Too bad. Written by Paul Dribin

The Real Cause of Vacancies in St. Louis

At the suggestion of Todd Swanstrom, I read a book by his colleague titled Housing Dynamics in Northeast Ohio by Thomas E. Bier. The book written about the Cleveland area is also applicable to St. Louis and many other cities.

The argument in the book backed by data is that vacancies occur when there is an oversupply of housing in the region. This oversupply of housing occurs because developers are looking to profit by building more housing, and land is cheaper in the suburbs. The author points out that when there is an oversupply the oldest, most worn out housing loses all market desirability and becomes vacant. The problem is made worse because developers can more economically build in the suburbs and the infrastructure in the suburbs is stronger.

This plays out when we look at the north side of St. Louis. There will only be a turnaround if the city figures out how to streamline its development requirements, crime is controlled, and schools turn around. In addition a marketing campaign to young people around the company would help. We could offer free housing and lots of land. Written by Paul Dribin

Container Houses

The Post recently wrote of a couple in Old North St. Louis who are building a house consisting of storage containers. As long as the housing meets code, why not? The sad part of the story is that lenders are not willing to make mortgage loans on the north side. Isn’t that redlining? Written by Paul Dribin

St. Louis Housing Summit

Today, 9/21, I attended a housing summit here in St. Louis at Christ Church Cathedral downtown. The idea of the summit was to start to build a coalition to develop more affordable housing in St. Louis and end homelessness. There were approximately 300 people in attendance including some homeless people. The speakers were good, enthusiasm high. Let’s hope for the best. Written by Paul Dribin

Update on Paul McKee and Northside Project

Little is happening in this arena. KWMU came upon a renegotiation agreement that requires relatively little of the northside group to keep the deal going. As I have said, I know McKee and consider him an honorable purchase. I think he has been squeezed by too many parties in the city. Written by Paul Dribin

The Biggest Cause of Housing Unaffordability

I run into issues affecting housing affordability every day. The simplest and also most difficult problems are the land use and zoning restrictions that unnecessarily drive up the cost of housing and or limit or ban the construction of apartments. Some of these decisions are things such as:

1. Banning of small houses

2. Minimum lot sizes that require a large expenditure on land.

3. Banning of manufactured housing.

4. Excessive road widths and sidewalk requirements

5. Inefficient inspection processes.

6. Banning of apartments

These are not sexy issues and are often overlooked. Each one of them makes housing less affordable. Written by Paul Dribin

TIF In University City

NOVUS Development had been approved by University City to develop a mixed use commercial site at the intersection of Olive and I-170. This is an ethnically diverse area with lots of small businesses and minority residences. Community leaders are calling for a Community Benefits Agreement which would establish clear objectives to benefit everyone in the community especially those that might be displaced by the development. I believe this is only fair and proper in such a situation. I am confident this development will be a win-win. Written by Paul Dribin

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