This is folly. No, it’s worse than folly. It’s madness. Stark, raving, gibbering insanity.
“Fairfax, like the rest of the country, is facing a foreclosure crisis that’s unprecedented,” said county Board of Supervisors Chairman Gerald E. Connolly (D), who proposed the idea. “The county has to use its resources and influence to try to stem the tide.”
Using funds from existing housing programs, Fairfax County will purchase 10 houses outright and provide government-backed, low-interest loans for another 190. Says Connolly in an official statement: “We will offer assistance to those at risk of losing their houses, assist first-time buyers purchase already vacant houses, and in some cases the county or its nonprofit partners will purchase a small number of houses to help stabilize distressed neighborhoods.”
A Fairfax County website asserts that the county had 4,527 foreclosures last year, and 3,518 in the first quarter of 2008. Somehow, helping 200 homeowners is supposed to “restore stability” to the housing market.
OK, that’s clearly delusional. But how about the thought that the initiative can help with affordable housing? Gardner elaborates: “One of Fairfax’s primary goals is to expand its affordable housing stock … particularly the category known as workforce housing, which is intended for such middle-income professionals as teachers, police officers and firefighters who otherwise couldn’t afford to live in one of the nation’s most affluent jurisdictions.
So, for $10 million, the county will provide financial assistance to 200 middle-class households. Where’s the money coming from? $6.3 million will from the One Penny Housing Fund, $2.075 million from existing federal HOME funds, and $2.95 million from existing FCRHA line of credit.
And what do those funds do? According to county documents, the One Penny Housing Fund was set up to… preserve affordable housing. Indeed, in 2007, the fund was credited with “preserving 1,412 units.”
House about those FCRHA (Fairfax County Redevelopment and Housing Authority) funds? Let’s see, the mission of the FCRHA is “to provide, maintain, and preserve decent and safe affordable housing for low and moderate-income families.”
Now, how about those federal HOME funds? According to a U.S. Department of Housing & Urban Development website, “at least 90 percent of benefiting families must have incomes that are no more than 60 percent of the HUD-adjusted median family income for the area.”
So, Fairfax supervisors voted to take money from the One Penny program, which last year preserved 1,412 units of affordable housing, and will use it, along with additional resources, to make available 200 units of affordable housing. Only in a politician’s mind could that possibly constitute a good trade.
Furthermore, the supervisors’ action is taking funds meant for lower- to middle-income recipients and making some of it available, according to Gardner, “to first-time buyers earning as much as $75,600, or 80 percent of the area’s median income.” Sounds like Robin Hood in reverse: Take from the poor and give to the middle class.
There is one other option that Connolly and others could pursue to make housing more affordable in Fairfax County: Just stay away! Let the marketplace work. A funny thing happens when there are more houses on the market than people willing to buy them: The prices drop. By definition, when prices drop, houses become more affordable!
D’oh!
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