Problem: Housing in the Seattle area is too expensive.
Government solution: Artificially inflate the buyer pool by throwing millions in government loans at the problem.
Seattle will soon stake low-income housing developers in the cutthroat bidding wars for building sites.
The idea, which the City Council’s Housing, Human Services and Health Committee approved as a two-year pilot project earlier this week, is to lend developers money fast and early — up to five years before they’re ready to build.
The program will help non-profit developers secure sites before Seattle land costs get even more out of hand and better compete against their for-profit counterparts, who often can move more quickly, said Kollin Min, regional program director in Seattle for Enterprise Community Partners, an organization that helps fund low-income housing.
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The program will get $2 million a year through 2009 from the city housing levy’s operating and maintenance fund.That’s just a start, Min said.
“It’s a very good first step,” he said. “We need to have a larger pot to really make a dent in the problem.”
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The Legislature authorized a separate $1 million earlier this year for a similar program statewide.
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Forty percent of the program money would go to home-ownership programs for residents earning 80 percent to 120 percent of the median income. Other money could go to rental housing for people making no more than 80 percent of the median income.
How does “spend more money” make sense as a solution for the problem of something being too expensive? I’m no economist, but I’m pretty sure that projects like these only serve to further drive up prices.
Should local and state governments bother trying to get involved at all, or should they just let the market work itself out?
(Aubrey Cohen, Seattle P-I, 05.03.2007)