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Richard Rider

Politicians reject free market low income housing — caving to labor union demands

The SAN DIEGO UNION-TRIBUNE had a good editorial on 5/30/17 (see the bottom of this commentary), excoriating politicians for ignoring practical private market housing alternatives (such as “granny flats”) in favor of uber-expensive taxpayer-subsidized housing which meets only a tiny fraction of the low income housing need.  The editorial correctly highlights some building innovations that offer low income folks small but quality homes for relatively low cost.  Perhaps most intriguing is the 3D printer homes prefabbed in 24 yours for as little as $10,000 apiece.

But the editorial fails to consider WHY our politicos so quickly dismiss these amazing “shovel ready” alternatives.  The reason is that the labor unions (and their union construction firms) profit greatly from “affordable housing” — housing that can cost double what private apartments would cost and is FAR more expensive than these new housing options (built with nonunion labor).  These construction unions partner with their powerful public employee labor unions on policy issues, resulting in the election of local politicians bought and paid for by (or afraid of) these labor juggernauts.

Moreover, politicians never miss an opportunity to posture at a ribbon cutting ceremony at one if the ridiculously expensive projects.  There’s not much to crow about when someone erects a granny flat in their backyard.

Freeing up the innovative private housing market to provide more low income housing without taxpayer subsidies simply isn’t profitable for politicians.  I suspect our elected officials themselves don’t always consciously understand that fact — mindlessly accepting the influential labor union rationales justifying the government’s sadly misguided housing policy decisions.

***

ONE OTHER THOUGHT:  When government builds high quality low income housing and then grants some family DE FACTO squatters’ rights, that family will remain poor.  Having excellent housing for 1/3 to 1/5 the market price (coupled with other welfare benefits) is a huge incentive for low income people to (at least on paper) remain “impoverished.”

If work is found, the subsidized housing beneficiaries will seek only part-time employment or — better yet — employment for unreported cash. There is no “up and out” policy overseeing low income housing benefits.

It’s worth reviewing my online article about this effect.  The Pennsylvania Department of Welfare did a study of the effect of welfare benefits.

http://riderrants.blogspot.com/2013/02/yes-100-tax-on-earned-income-for-single.html

 

BOTTOM LINE:  If one is taking advantage of the Pennsylvania welfare/subsidy options, then between about $9,000 and $69,000 of (reported) earned income, such a family faces what amounts to an average 100% tax.

Stated differently, such a family earning $9,000 and receiving the subsidies is as well off as the identical family earning $69,000 and paying their taxes.  It’s an awesome disincentive to improve one’s lot in life.  And there’s every reason to assume that similar disincentives of roughly the same magnitude can be found in ALL of our states.  Certainly it is true in California.

***

http://www.sandiegouniontribune.com/opinion/editorials/sd-san-diego-housing-innovation-20170526-story.html


SAN DIEGO UNION-TRIBUNE

Editorial

Housing innovator deserved better from San Diego officials

30 May, 2017

California’s housing crisis is a matter of immense concern for millions of low- and middle-income families who see their family budgets squeezed by the constantly increasing cost of rents and mortgages. But the abject failure of the state government to help relieve the crisis by trying new approaches to adding housing stock should be cause for public anger, not concern. At the state and local level, officials continue to embrace housing subsidy programs that have tiny impacts and continue to refuse to think outside the box.

 

Now there is a fresh example of this backward approach in San Diego, where average apartment rent tops $2,000 a month and the median price of homes is more than $500,000. A May 22 San Diego Union-Tribune story detailed how Los Angeles developer Jennifer Litwak’s innovative proposal to build shipping container apartments and 3D-printed “urban cabins,” which could cost as little as $150,000 per unit, couldn’t get traction with the San Diego Housing Commission or with the Jacobs Center for Neighborhood Innovation, a nonprofit foundation with ambitious plans to redevelop areas in southeastern San Diego.

 

Litwak’s 6-year-old nonprofit company, Housing on Merit, has $1 million in hand and wanted to buy or lease land in San Diego to establish what it calls a Housing Innovation Learning Laboratory to try a new approach to housing. Given that it costs the city an average of $350,000 to build an affordable-housing unit using standard construction practices, Litwak’s ideas would seem worthy of full consideration.

 

Instead, Litwak says commission officials told her they passed because they considered the plan risky. Commission officials said their reason was they doubted her proposal could get approval from the mayor’s oversight board and City Council members.

 

Neither reason is acceptable.

. . .

To read the rest of this thoughtful editorial, go to this link:

http://www.sandiegouniontribune.com/opinion/editorials/sd-san-diego-housing-innovation-20170526-story.html