Thursday, November 5, 2009

The City Paper on affordable condos in the neighborhood

Saw an interesting post on the City Paper's Housing Complex blog about affordable condos in the Kenyon Square building in Columbia Heights and elsewhere. New condo buildings have some afforable units that are geared towards people making below the median income in the area. However, if those people sell their condos, they only get a fraction of the money back, and they can only sell to other low income people. After 11 years, for example, they get about half back, with the rest going to a city affordable housing fund.

I see the point of these rules, which is to discourage flipping and such, but as the post points out, sometimes people just need to move -- they have a family now or whatever reason. Local nonprofits are looking to change the rules. Interesting stuff.

5 comments:

Paul said...

What's wrong with the rules? The point of affordable housing as condos isn't to artifically create some huge flipping opportunity for a low income family. It's to create affordable housing stock that will continue to be affordable regardless of whether the current tenant moves on.

Instead of the beneficiaries of these affordable housing units bellyaching that they don't benefit from appreciation they should be thankful for the opportunity they've been bestowed. They are able to live in a nice neighborhood, in a new building and can benefit from the mortgage interest tax deductions. If they can't be appreciate that then maybe all DC affordable housing should be apartments...

Anonymous said...

They knew the rules going in. If they thought their lives would change then they should have stayed in an apartment as renters.

IsmeSon said...

I agree with Paul. Keep the return on equity within the affordable housing program so that others may benefit from it. I wish I could qualify for such a program, instead i'm left with having to pay market price.

Anonymous said...

No one is arguing that they should be given a huge windfall for flipping. It's a subtle point, but equity is key to ownership in housing as it is in the way you treat a rental car.

If the owner has no equity when they leave, they probably have to go back to being renters when they leave. I know my downpayment in Mt.P came from appreciation on a prior home.

So, the residents are stuck and often stay longer and in more crowded conditions than they would otherwise do.

In fact, if you have to move within 3 years, you probably end up with a loss b/c of the closing costs and loan fees.

Also, if interest rates go up, you may have to sell at a loss since it is the next-buyer's income that sets your price.

And, if you have no equity, why maintain the home? Why not illegally rent it out. Would you want to have that kind of neighbor?

There are ways to modify the stakes to make it work better. We ought to fix it.

Anonymous said...

SOL! These people knew exactly what they were getting into. That woman doesn't have to take care of some crazy lady with dementia that she isn't related to-this part of the story sounds iffy to me. Maybe she's cashing the ladies SI or disability checks, you know what I mean? She should kick her out and then she would have enough room for her two children and husband. She can wait it out a few more years.