Wednesday, December 26, 2007

Affordable housing robs taxpayers

In matters of public housing, Sun Valley city government has been fiscally incompetent, and it hasn't been open in its workings with "affordable" housing matters. Sun Valley initiated publicly owned, subsidized housing with the purchase and operation of two housing units, and there is $806,000 in the new budget for further public housing matters.

In 2005, with no public comment or hearings, Sun Valley initiated a housing fund to acquire publicly owned housing, to be specifically in Sun Valley and at River Run. (Why should Sun Valley taxpayers fund Sun Valley Co. housing at River Run?)

In 2006, with no public comment or hearings, Sun Valley purchased two condominiums in Elkhorn for $455,000, part of a deal with the developer. These two-bedroom units typically rent on the open market in Ketchum and Sun Valley for $900 to $1,200 per month. (There are 15 such units for rent currently listed in the newspapers.) Sun Valley decided it would get into competition with privately owned, free-market rental housing with its own public-ownership housing.

Sun Valley rents these two units to a city policeman and a fireman for $750 per month. As $1,200-per-month units, Sun Valley subsidizes the unit renters $450 per month, or $5,400 per year. But look at the total costs to the city. The city pays $3,600 per year association dues for the two units. The city, county and schools lose $3,800 per year in property taxes no longer privately paid on the two units. Had the city invested $455,000 at 8 percent, the return would be $36,400 per year and still retain the principle. The taxpayers' costs for $10,800 (2 x $5,400) rent subsidy is $43,800 per year. Fiscal competence?

As necessary, Sun Valley should just use annual $5,400 rent-supplement vouchers for its employees, and let the employees rent whatever they want on the Ketchum-Sun Valley open market, maybe even a one-bedroom unit would do. For all the costs the city incurs for only two city-owned rental housing units, with rent-supplement vouchers for the same costs the city could provide eight units of affordable housing for its employees.

Sun Valley should amend its housing fund, get out of public-housing ownership, and just provide rent-supplement vouchers instead of providing publicly owned housing. Such vouchers are much more cost effective and versatile and provide affordable housing to more people more easily and quickly within the existing rental housing market.

Milt Adam

Sun Valley

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