To the editor:
Much is being discussed about available housing in the state of Vermont. The private sector has to line up their financing from loan institutions. The non-profit sector lines up at the tax dollar door.
Non-profits like Down Street Housing receives millions in loans from state and federal sources. Most of the time in 30 year balloon payments at little or no interest. In other words, on a 50 million dollar loan they pay nothing on the balance or interest for the 30 years.
What do they do with the rent money?
And then according to documentation from the Vermont Housing and Conservation Board, they then get to refinance again (after never paying anything back) or having the loan changed to a grant.
This money started flowing out in 1988. A 30 year balloon payment would mean the balance (50 million and interest) would become due in 2018. If the money came back, we wouldn’t be on the hook year after year for more housing. Before UHCB (state) HUD (Federal Housing and Urban Development) loaned affordable housing to the private sector. Generally 20 year loans and when paid back the private sector owned the project and HUD had the dollars to loan out again. Its called revolving loan fund.
There’s much talk of why affordable housing is so expensive. Permit process, environmental, NIMBY, traffic, etc. Having to hire consultants, expert witnesses, lawyers drives up the cost. The privates have to pay this out of their pockets while the non-profits then claim the privates cost too much. The non-profits also [benefit] from the federal government’s “Low Income Housing Tax Credit” money.
I can’t get anyone to explain this to me clearly.
Maybe they can’t understand anymore than me.
From what I can figure. . . you can invest money due the IRS to [receive] this credit. Banks and insurance companies use this to reduce their tax bill. . . and might even get interest for their stockholders.
So we taxpayers pick up the bill instead. [This] supposedly kills two birds with one stone; [it] benefits the rich and supposedly benefits the poorer (affordable housing) or does it?
Remember these loans are generally financed or changed to grants.
Who picks up the difference?
You do.
Charley Burbank
Calais
