Mayor Parker should beware of the unintended financial consequences of her housing plan | Editorial
In some respects, the mayor's proposal is designed around a kind of generosity that is well-intentioned — and also costly.
Mayor Cherelle L. Parker has made her $800 million housing plan the centerpiece of her first term. Last month, we called it an ambitious and laudable goal, but one that needed to overcome steep obstacles.
While the thrust of what the mayor has proposed makes sense for our city, she and her colleagues on City Council should be mindful of some of the potentially unintended financial consequences of her otherwise worthy plan.
Take Parker’s idea for expanding the Basic Systems Repair Program, which has done an excellent job of remediating blight and keeping people in their homes. Parker has proposed spending an additional $84 million, which should be able to easily serve the households that are currently on the city’s waiting list.
However, the expansion would also cover the cost of repairs for thousands of additional households that exceed the current income guidelines allowed by the need-based initiative.
While this kind of generosity is well-intentioned, it is also costly. Many of these funds would go to households that are well over the city’s median income levels. Does it really make sense to subsidize home repairs for a family of four making nearly $115,000?
The plan includes other ill-considered streams. Some of the money for the proposal would go toward providing mortgage payments for middle-class households in luxury buildings.
Those funds would be available to households making as much as $143,000 for a family of four, and $100,000 for an individual.
Consider also the mayor’s plan to avoid evictions by making one-time payments to landlords — an effort that is expected to cost $70 million, and will help a projected 11,000 households stay in their homes.
Instead of spending over $200 million subsidizing middle-class households, the mayor should focus on ways to save them money without spending city revenue. Especially given the additional borrowing costs incurred when cities invest in housing.
One of the easiest ways to do that is by working with Council to unravel the web of zoning restrictions officials have implemented over the past decade. Bringing back a limited version of the property tax abatement, for example, which a recent report credited with facilitating the construction of nearly 60,000 new housing units during the roughly 20 years it existed, all without leading to displacement in the city’s existing housing stock.
An abatement capped at $395,000, which is the median cost of a home in the region, would spur housing construction without giving disproportionate benefits to the ultra-wealthy.
The mayor’s housing team contains many thoughtful professionals who have no doubt told their boss exactly that.
The bigger problem seems to be housing politics — an issue that arose during Wednesday’s Council hearings on the mayor’s proposal, with Council President Kenyatta Johnson indicating there is a desire among some members to set income eligibility levels for the plan on a district-by-district basis.
This is exactly the kind of needless complication that discourages new development, leads to construction delays, and ultimately results in higher housing prices.
City Council should work with Parker to trim the fat from her housing plan, pare down its own onerous zoning rules, and consider revenue-neutral ways to boost development instead.