The Ill-Conceived Housing bond

by John McClaughry

Reporter Lou Varricchio of True North Reports has just finished a four part series on affordable housing, in particular, the $35 million housing bond included in the budget bill just enacted in the State House. His June 29 report contains this startling admission.

“Responding to criticism that mortgage loans for Vermont’s affordable housing program will likely never be repaid, the head of the Vermont Housing Finance Agency [Sarah Carpenter] says the program doesn’t depend on repayment, and is nonetheless financially sound. “There is very little expectation that these mortgages will have the capacity to be paid back without disrupting the project,” Carpenter said in a letter obtained by True North Reports.

“If the incomes of the residents remain low … there is no room in the rents to pay back these loans. We do not want to raise rents and displace low-income residents at the end of tax credit compliance period just to pay back a deferred loan,” she added.

She continued “Our state policy is to make sure that housing we invest in remains permanently affordable so we do not have to buy it back as we have had to do over the years with a number of federal housing programs.”

I suppose the state can make anything permanently affordable if they just throw your tax dollars at it year after year. Whether this deal is affordable for the taxpayers is quite another question.

- John McClaughry is vice president of the Ethan Allen Institute.

{ 2 comments… read them below or add one }

Doug Richmond July 15, 2017 at 12:35 am

What is a lousy $35,000,000
Among 600,000 residents = $60 per person and $240 a family

Drop in the bucket, when you are doing it for “THE PUBLIC GOOD’

Reply

Jim Bulmer July 16, 2017 at 10:40 pm

It’s the misguided, irresponsible thinking and actions of people like Ms. Carpenter that has lead Vermont into its current state of financial mess. I was brought up to understand that actions have consequences. What message is being sent to low income renters or buyers if they are lead to believe that they have no obligation to repay, and and are lead to believe that the state does’nt expect it? Further, bonds have maturity dates at which time funds are needed to repay the principle. From whence come the dollars????? You guessed it, we tax payers. INSANITY.

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