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The St Louis Contrarian

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

Archive for the tag “housing development”

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

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New Development Proposed on Choteau

A new mixed use development is proposed on Choteau and Jefferson. It will be quite a large project encompassing commercial, residential, and retail. The area could certainly use something like this. We wish the project well. Written by Paul Dribin

Low Income Housing Tax Credits

Low income housing tax credits are the primary source of construction and rehabilitation for affordable housing projects. The program has been around since the eighties and is an effort to get private sector involvement in the affordable housing development business. The program uses the equity generated from the sale of tax credits to create low debt on affordable housing projects, thereby supporting lower rents. (This is a vast oversimplification but sufficient for this discussion.)

The program has accomplished much but has significant limitations. It is neither efficient or effective. Let me explain.

The program is not efficient for two reasons. First it is excessively complicated, involving arcane aspects of tax law, legal issues, accounting etc. It is an extremely difficult program for a newcomer to enter. Second, and related, the administrative costs are extremely high. Too much of the money does not go directly to housing but lines the pockets of developers, consultants, syndicators, accountants, attorneys, etc.

Second, the program is relatively ineffective. It does not house the low income people who need it the most. Someone must be able to pay a decent rent to afford the program. Homeless or very low income people cannot participate.

Politically this is not the best time to address the need for a new affordable housing program but the community needs it. The National Affordable Housing Trust Fund is a start but its resources are limited for now. We need a simpler more efficient and effective affordable housing program.

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