Can San Juan Capistrano Afford Affordable Housing?

Our town is a microcosm of Sacramento and Washington D.C. The tendency to grow government and to embrace social engineering programs is thriving here. City-funded “affordable” housing is an excellent example.

It is taken as the gospel truth at City Hall that the State has mandated that we provide a number of low cost housing units… or else! However, upon closer examination, one can see that there really is nothing to fear. There are no laws prescribing penalties; there is no downside for non-compliance. There is a nebulous risk of losing future “grant opportunities” (a topic for another story), but City Hall has embraced affordable housing and moved us further down the wealth re-distribution and big government road.

Apparently the State does not recognize that San Juan Capistrano already has several low and moderate income neighborhoods, including apartments, condos, and mobile homes. In fact, we are one of the few cities anywhere in California to impose rent controls on housing.

As if the ideological questions weren’t enough, the cost of this local “social justice” should make one worry for our future. For example, you may have heard about the Habitat for Humanity project now underway in town. This 27-unit development of affordable houses was promoted to the City as a benefit for “disabled veterans”. The City was to contribute land it acquired with money collected from developers. This land was valued at $2.05 million. The City also contributed a $1 million grant received from the state (you know… that other source of “free” money). Habitat was supposed to come up with the balance of the money needed for the $7.8 million project. A Development Agreement was signed in September 2006 in which a two year completion deadline was imposed to conform with the conditions of the State grant.

The project started off slowly and went downhill so Habitat came back to the City on several occasions to request more money. For various reasons Habitat did not get the units built and they were not able to raise the money they had promised. Our city, not wanting to have a debacle on their hands, came up with the additional funds instead. The first request for a loan/grant combo got Habitat $966,516. The second request got them $3.27 million. Over the last three years, our City has invested over $4.2 million in interest-free loans and grant funds after the original investment to keep this project afloat.

Through January 2010, only nine housing units have been completed. At this pace it will require another six years to complete the project. Already, it is clear that “disabled veterans” are not flocking to acquire these homes. The State will soon demand that the $1 million grant be returned. This repayment will have to come right out of local taxpayer pockets as that money was spent long ago.

The City saw this coming at them awhile ago and, after seeking and receiving an extension from the State (new deadline: 9/3/10), the City asked Habitat to estimate how much it would take to get all units built before the end of May this year. Habitat responded in a letter that it would take another $5.4 million (in addition to the original $3 million and the first request of $966,516).

Thus, the City's latest $3.27 million has left Habitat with a continuing shortfall of $2.27 million! If Habitat does not come up with the needed money and the City is done investing, then how will the project be completed by the new deadline?

Our city has bet almost $7.3 million dollars on this social engineering project that has become anything but affordable. Hopefully these units will be completed this year but at this time it is uncertain that the City will ever recoup our money. With other affordable housing projects in the works, one must wonder how much those are costing us also? Our elected leaders should really compare how much benefit we are receiving for $7.3 million versus the value of these “grant opportunities”.

Obviously, we cannot afford Affordable Housing!


Anonymous said...

That $7.2 million expenditure would be enough to fully fund our police services for about 10 months! In other words, we could have used that money to increase policing by 20% over the next five years!

Frankly, I vote for policing over feel-good social programs.

chec it out said...

why is affordable housing not affordable?
Because Open Space is so expensive.

Anonymous said...

We have affordable housing. Just look at the condos off Camino Capistrano. Full if gang members and welfare abusers.

MON said...

Another affordable houseing boondoogle is located in the historic Los Rios District. Take a drive and see the clap board, modular eyesores that has been permitted in our community. The financial history and applicant process could be added to the Habitat for Humanity taxpayer nightmare...of social justice.

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