Shameful!

Subsidized affordable housing is a shameful enterprise.

Take Portland's most recent public housing project, Stephens Creek Crossing.  The previous low-income apartment complex on the property was called, Hillsdale Terrace.  The apartment buildings were tired and could have been renovated, but with government grants, the old buildings were demolished and new ones built, and they are beautiful!  The residents are truly blessed to live there.

The problem is the cost: 122 units for $53.9 million.  That's an astounding $441,800 per unit!

To put that into perspective, consider this:

• The median cost of a home in Lake Oswego is $328,000.  A 2-bedroom condo with about 950 sf costs about $140,000 and up.
• The Wizer Block "high end" apartments are estimated to cost about $473,000 per unit.
• Apartments in the Multnomah area within 2 blocks, built in 1961, are basic but well kept up, are valued at about $95,000 per unit, rent for $845 for 2 bedrooms, and can be rented with a Section 8 voucher.  

The shame is that so much more could be done with $53.9 million. People prefer the freedom to choose where to live, and no matter how great the public housing looks, a Section 8 voucher is far more prized and has a longer waiting list than public housing.

For $53.9 million, 122 families could rent private housing units for 74 years.  Section 8 Voucher recipients length of tenure is 3.08 years compared to 4.69 years for public housing (HUD), so vouchers would actually go farther.  If you put the money in a trust fund, the interest could extend the 74 years quite a bit.  Add in the fact that with private. Housing, maintenance is done by the landlord and in the end, he/she hopefully makes a profit, and the property pays needed property taxes to government entities.

Government housing is built at a higher cost per sf (HUD Research), the property does not pay property taxes, and operating costs on average are about $4,589 per unit per year.*  Add to that capital expenses of about $867 per unit per year*, off-site administrative expenses, and lost Multnomah County business taxes, and public housing winds up costing many times more than the Section 8 Voucher Program.  The true costs of public housing would shock the average person. And all the while, hundreds of families could have been helped for many decades with that pile of money.

Public housing for the most part, is obscene and immoral.

Is Public housing a housing program or is it a political program?  Is the experiment better left in the past, or will we continue to build more and more public housing to defend our privileged position of not being poor?  Why can't the market supply housing for low income families as has been shown in Portland (new apartments for $70,000 each).  Or has the federal government changed the program for social outcomes rather than for housing?

*  National Apartment Association 2013 Survey of Income and Operwting Expenses

Who benefits and who loses from these outrageously expensive and unfair housing projects?

The losers are:

• Hard working people who struggle to make their rent, who may never get or want government support, but will have to pay for the grandiose public housing through their taxes. 
• All taxpayers whose money is wasted on these outrageously expensive programs that help a
   ew when they could be helping hundreds more.  
• The biggest losers are the people who have real housing needs but could not access the limited spots at this or other public housing, but could have been helped with much more affordable and preferable rent vouchers.

The winners are:

• The usual architects, contractors, bureaucrats, money-changers, non-profit workers and others who make their living from programs for the poor.  

This topic continues - read the next post for more about Stephens Creek Crossing.