Affordable Prices for Goods, Services
From Issue: Volume XX - Number 20
By Taylor Ramsey
Government involvement in the private marketplace feels good, but it only increases the burden on those of us who directly, or indirectly through higher prices, pay taxes.
As an example of government involvement in the marketplace we can look at Redevelopment Agencies. Californians decided to do away with Redevelopment Agencies in 2012, but there are a few projects remaining to be completed. Redevelopment Agencies use a percentage of property tax revenue to work with private developers to improve conditions in blighted areas, provide low-income housing, etc.
The City of Long Beach recently finished one of the remaining RDA projects to provide new low-income housing. The project required taxpayers to come up with $5.7 million for 14 apartments. Each apartment cost Californians $407,142.
Those two bedroom units cost more than the average price of a home in our area and the payments being made by the new homeowners are well below a normal mortgage amount. The poor guy who is working and trying to save enough for a down payment on a home is being forced to send his own money to a government agency so they can redistribute it to some guy who will buy a home that cost too much to build and allow him to pay lower than “market” rates to own it. Amazing.
The article stated that the RDA is still working on completing the building of 300 more units. If we use the cost of the first project as an example, those 300 units will cost taxpayers over $122 million!
The City of Lakewood has used redevelopment funds to operate a Fix-Up / Paint-Up program for persons who own rundown homes with the intent to increase property values. At the same time, Lakewood wants to use redevelopment funds to create low income housing. Does that make any sense? Use taxpayer money to increase property values and at the same time use taxpayer money to build homes so people can afford to purchase homes below “market value.”
Earlier this year I saw an advertisement that read “You can own a beautiful, brand new townhome with the city’s help.” Of course, a potential buyer must apply and meet certain criteria to be considered one of the few to be given the opportunity to purchase a home the buyer can’t afford. The advertisement should have read “You can own a beautiful, brand new townhome with your “neighbor’s” help. Thank goodness, the community is full of non-qualifying taxpayers who are forced to give their own money to the new lucky buyer. Government continues to push home ownership out of reach of the everyday family.
I contend that if the marketplace were able to operate without government involvement the price of housing would actually decrease and more people could afford to own a home. Home ownership is not a right. The opportunity to earn a home is.
Remember when the US Congress was asking home lenders, along with Freddie-Mac & Fannie-Mae, to make loans to people who could not afford them? The demand for homes went through the roof and so did prices as a result of that demand.
Our elected representatives create programs that feel good without paying attention to the actual effects of their decisions all the way down the line. Government should be removed from what should be private sector activity in the marketplace if the true goal is affordable prices for goods and services.