Inclusionary housing should stay so

[posted to pro-urb]

Awarding windfall profits to those who “luck into” inclusionary housing (since nowhere near as many people end up with it as could qualify) strikes me as tremendously unfair to several groups, including:

* People who bought inclusionary units in areas that didn’t appreciate wildly. (Yes, these areas exist. A ca. 1925 Chicago bungalow that sells for $160K in a “good” south side neighborhood would sell for $360K on the north side, largely due to “the segregation tax.”)

* People who bought non-inclusionary units in the same buildings (especially for high rises). They paid $50, $100K more for their units and got something maybe a bit nicer inside. When resale time comes ’round, a buyer will look at an inclusionary unit and conclude it’s only worth $20K less — the cost of upgrading the interior, since the location is identical.

* People who didn’t buy inclusionary units, but could have, perhaps because of dumb luck or a technicality, whether not winning the allocation lottery or not having qualifying income or a sufficient down payment at that moment in time.

Affordable housing policy should seek to get people into, well, affordable housing. Similarly, a house is first and foremost a place to live, and then only secondarily an investment.

If we want policies to build household wealth, we can do that through much more efficient means — like tax credits that match savings contributions, e.g., line 48 on the 1040. Government should NOT be in the business of encouraging speculation in one investment type over another, and should not lead people to believe that they can be guaranteed better-than-market returns on any investment, housing or not.

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One thought on “Inclusionary housing should stay so

  1. The banking crisis, steep housing-value declines, and “troubled-asset recovery plans” of 2008 could just be the start of repaying the burden of years when people did expect better-than-market returns on their housing investments.

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