‘Affordable’ Housing: The Easiest Bond to Vote Down
- Increased government involvement in the housing sector will drive up input prices
- More homeowners will be taxed to fund the personal preferences of other homeowners
- San Antonio taxpayers will be left with the tax bill when the housing market settles down
A good friend of ours recently quipped about how she wished she had a good product or service idea to go along with her immense analytical and organizational skills. No doubt if she did, she’d have little trouble finding financial backing.
All government needs though, is a captive tax base. Politicians like to refer to these taxpayers as “investors.”
San Antonio mayor Ron Nirenberg used some form of that word five times in laying out his case for proposition F, the $150 million housing bond on the ballot here in San Antonio in a couple weeks.
When voluntary investors in the private sector put their resources behind a new or improved gadget, they generally get a return if those who buy the gadget get a big(ger) bang for their buck. That’s the hope of proponents here, to “fill affordability gaps” in the local housing market.
In reality, politically-directed “investment” tends to exacerbate current problems and/or create new ones.
Rather than “spurring … resources” by intervening in the market, the city is more likely to spur prices of inputs by competing with builders already busy trying to bring 20,000-to-30,000 new units online.
That’s to say nothing of the organizations he cites (some publicly-funded) that are already working to alleviate this problem, such as it is.
A recent report in the San Antonio Express-News cites people “seeking apartments … after returning to the office, finding a new job, breaking up with a partner or simply wanting their own space.”
Additionally, Mayor Nirenberg implies that some homeowners have a right to stay put if they want to.
Why is it the responsibility of other homeowners to subsidize these varied groups’ personal preferences? Make no mistake, they will, because all this debt gets billed to them in the form of the property taxes they’re forced to pay. Recent appraisals are already sending shockwaves across the area.
The mayor also believes that people are living “farther away from job centers … due to a lack of affordable housing options.” Odds are just as well that they’re moving out of city limits to avoid being conscripted benefactors for the whims of city council.
The pressure on those who remain will only intensify as more segments become exempted from this coercion. It’s yet another reason the whole property tax scheme should be uprooted and scrapped (the subject for a forthcoming column).
At the end of the day, this effort, should supporters convince voters to swipe the city’s credit card, will have about as little effect on local housing prices as the oil market will feel from President Biden tapping the Strategic Oil Preserve for 180 million barrels of crude.
That’s ironic because both problems are (partially) caused by a similar policy choice in Washington D.C.: a weak dollar. If the mayor is curious at all why “prospective homebuyers” have been “losing to outside investors,” that’s it.
The housing market will inevitably come back down to earth when the dollar strengthens, whether due to a president finally standing up for it, or investors fleeing other currencies because of a global downturn (see the Great Recession).
At the end of the day, these ‘affordable’ housing bond projects will require ongoing subsidization to be kept afloat. They are a terrible financial risk for the city, and a looming drain on every taxpayer with no end in sight. VOTE NO to this unwise housing bond proposal.