What is a Housing Bank and Why Do We Need One?
How Would a Housing Bank Be Funded?
What is a Housing Bank?
"A
Community is never without the power needed to shape
its land use future if it is willing to anticipate and deal effectively
with change and opportunities as they arise."
Creative Land Development
author, Bob Lemire
What is a Housing Bank and why do we need one?
The Housing Bank is proposed to replace an existing County Commission
that is tasked with administering projects that help our working families
purchase homes that they otherwise could not afford. Today, not
even middle income families can afford to purchase a home in San Juan
County. As a result, many of our young families are moving away. There
are fewer residents in the 25-44 age group today than there were in 1990
while our overall population has grown by 50%. The basic infrastructure
of our islands is threatened because employers cannot compete with the
mainland for the skilled workers who provide our most basic and essential
services: our school teachers, deputies, paramedics, nurses, utility workers,
and all those who work hard to assure that our community is a great place
to live.
Why
is this happening and whose fault is it?
It is no one’s fault. We happen to live in a beautiful and desirable
place. Word has gotten out and lots of other people want to move here.
The increased demand for property has caused prices to increase rapidly
( 27% increase from 2003 to 2004 and 33.8% from 2004 to 2005). The history
of real estate values for the County consistently indicates that it is
very unlikely that the trend in real estate prices here will be sharply
reversed, even if the economy slows. Meanwhile, salaries increase by at
most 3% per year. Employers cannot unilaterally provide the necessary
salary increases; they would have to pass on their costs, if they could,
which collectively would drastically increase the cost of essential services
for all. Our working families are simply being priced out of the
market by the increasing gap between salary increases and real estate
price increases.
Isn’t this something that our affordable
housing organizations are already addressing?
For all practical purposes, our community land trust organizations and
other affordable housing groups are limited when they use federal and
state grants to serve individuals and families with low and very low incomes.
Since one-third or more of project funding generally comes from these
government grants, it has been difficult to complete projects without
that support. This income cap requirement results in bizarre situations
where a family might earn too much to qualify for these homes, but still
cannot afford to purchase a home in today’s market. The
Housing Bank provides for a continuum of funding approaches to cover the
gap that now faces moderate and middle income households.
Why
is the emphasis on owning property, as opposed to renting? If the concern
is affordable housing, couldn't affordable rentals be part of a solution,
too?
There is nothing to prevent use of these funds for the purchase or construction
of rentals. We have focused on owning property, primarily to be competitive
with neighboring communities on the mainland in hiring and retaining skilled
workers who are essential to maintaining our infrastructure. It is likely
that rentals will be needed as part of the overall solution and the Housing
Bank Commission can incorporate them into their strategy when appropriate.
Are there Housing Banks in other communities?
There are many organizations across the country that are similar to our
Housing Bank. We have learned a great deal from their successes
and failures and will apply this knowledge to our own unique
problems.