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Affordable, Attainable Workforce Housing is Essential

Aug 12, 2020 12:00:00 PM / by Don Magruder, CEO RoMac Building Supply posted in Affordable housing

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Although everyone is finally acknowledging that there is a problem in housing locally and nationally, they cannot agree on what to call it.

Some say we have an affordable housing problem, which means housing has become so expensive due to land costs and regulations that the average middle to lower income family cannot afford a home. The problem with the word “affordable" is the group of people who tie affordable housing with government low-income housing, and they do not want that in their backyard.

Then the term “affordable housing” evolved to “workforce housing.” Workforce housing implies homes that are available to and affordable for people who have jobs and the rationale is justified given the economic impact on the community and need for workers to care for an aging retirement population. The problem is that some people perceive workforce housing as migrant worker housing and they do not want that in their backyard.

The new term being batted around nowadays is “attainable housing,” which is affordable, workforce housing that is attainable by most middle to lower income home buyers. There is a real possibility that attainable housing will be stigmatized because it infers that just about anyone can buy a house and some people do not want riff-raff in their backyard.

The first big problem with affordable, attainable workforce housing is not the name but rather the attitude of other homeowners who do not want middle to lower income families in their neighborhoods. However, they want these people to be their essential workers when they need supplies and services. The economic engine of America is fueled by essential, low-skilled workers, and until there is an appreciation that these citizens deserve an opportunity for clean, decent, and affordable housing, this problem will persist.

There are four actions that Lake County’s government and citizens can do to encourage the development of affordable, attainable workforce housing.

First, change impact and building fee calculations to be proportionate with the cost of the home. The impact, building, and hookup fees for a million-dollar home can be the same as a $200,000 home. That is not fair, and it is overvaluing homes that should be produced at the lowest cost.

Set up zoning for affordable, attainable workforce housing and then as part of the Lake County Comprehensive Land Plan deny variances which seek to limit and change areas. Those who have the means can afford lawyers and groups to fight affordable housing, but it is in the community’s best interest to provide housing for these essential workers.

Next, designate exceptions to local building code and housing ordinances for affordable, attainable workforce housing. It makes no sense to impose the landscape ordinance to an affordable home in Lake County. There are many codes and ordinances that should be stripped away from lower priced housing.

Finally, as a community, stop the fight against affordable, attainable workforce housing by dropping opposition to developments in your proximity. The COVID-19 pandemic has shown that this community needs essential workers. Stocking shelves, making deliveries, and providing in-home services are essential and you cannot attract the best essential worker with subpar housing.

Lake County must develop a housing plan that addresses affordable, attainable workforce housing. It does not matter what you call it—the bottom line is essential workers must have clean, decent housing.

Don Magruder is the CEO of RoMac Building Supply and host of Around the House.

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Quickly Crank Up the Economy with Affordable Housing

Apr 22, 2020 1:30:00 PM / by Don Magruder, CEO RoMac Building Supply posted in New Home Construction, residential homes, Economy, COVID-19, Affordable housing, coronavirus

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The Covid-19 coronavirus outbreak, along with the collapse in the oil sector, is putting enormous stress on the United States economy. The White House, Congress, and The Fed are scrambling for ways to fire up the economic engines. Most of the proposed stimulus programs are one-time shots, industry giveaways, and Wall Street bailouts that seem to mainly benefit the mega-corporations.

If government really wants to crank up the American economy and solve a national problem with little to no cost to the taxpayers, it should implement a real National Affordable Housing Program targeting lower and middle-class workers. If government, at all levels, would shake out all unnecessary regulations, needless government fees, and excessive corporate greed from affordable housing, housing starts would surge from the current levels of 1.3 million up to 2.5 - 3.5 million.

Up until the Great Recession, housing has always been the igniter of the United States economy. It was Wall Street’s greed, through bundling and bizarre financial instruments, that ruined the housing industry. A real American Affordable Housing Program that can crank up the economy and solve the national shortage of homes for working families must be free of Wall Street greed and influence. Yes, it should be a government program administered by the Department of Housing and Urban Development (HUD).

The first and most important aspect of this program is to identify what housing qualifies for affordable housing. The number should be based on what is affordable for lower and middle-income families in the area. Here in Lake and Sumter Counties, that number is $215,000 or less. The program would not be available for housing that cost more than what has been identified in the affordable range. We do not want to fund McMansions again for people on the upper end.

Secondly, mortgage money, controlled interest rates, zero down payment and government backed mortgage insurance should be available to lower and middle-class workers. The caveat for not allowing profiteering off this program would be that the mortgage guarantor, the United States Government, would repossess the property in case of default; the homeowner must make the home their homestead; and they could not sell the property for more than the purchase price for 7 years. The home would be registered in the National Affordable Housing Registry and would have restrictions placed upon it to prevent greed from ruining the program. The homeowner could sell the home for the original selling price and get back any equity.

You need land for affordable housing developments. Both the Federal and State government can participate in helping private developers to make property available. There should be a targeted lot price to qualify for the program. The land must be deed restricted for affordable workforce housing for a period of 20 years to discourage profiteering of the program. Property owners that sell tracks of land for affordable housing projects would pay no capital gains tax and the United States government would pay for all infrastructure costs up front for affordable housing developments and allow the municipalities and utilities to reimburse the cost over a 20-year low interest government bond. Bond costs would be covered by local taxes and fees.

States and local governments’ involvement would be in the reduction and waiving of building fees and impact fees for all nationally registered affordable housing projects. Affordable housing zones should be developed that would take the increased valuations in the land's taxable value and the increased tax receipts for land improvements like a Community Redevelopment Agency (CRA). The revenue could be used for bonded schools and road infrastructure instead of impact fees.

There is so much more that can be done if the Federal, Sate, and local governments truly decide to address the huge affordable housing shortage in America. This program could crank up housing starts above 2.0 million units for several years providing jobs, income, and real wealth to Americans without really costing the taxpayer anything. Why not focus on a real problem and have something to show for it, instead of another Wall Street corporate bailout that rewards greed?


Don Magruder is the CEO of Ro-Mac Lumber & Supply, Inc., and he is also the host of the “Around the House” Television Show which is hosted weekly on Lake Sumter Television.

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