Biden proposes $15B to subsidize creation of affordable housing. But what's to stop the buyer from flipping the house at market rates?

JEDI

Lifer
Sep 25, 2001
27,837
1,600
126

"$15 billion for the Housing Trust Fund, which provides grants to states for the construction and repair of affordable housing. "


or charging market rates for the apartments if it's an apartment complex?
 

nakedfrog

No Lifer
Apr 3, 2001
53,765
6,261
126
On the last FHA loan I got, one of the requirements was that it be my primary residence and that I live there for at least a specified amount of time. So, probably through some similar mechanism.
 
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dullard

Elite Member
May 21, 2001
23,809
1,994
126
The money goes to:
1) $65B for repairing/replacing public housing, no buying and selling there.
2) $25B for rental assistance, no buying and selling there.
3) $15B to build and repair affordable housing.

I assume you are talking about item 3 only. In that case, only a part of it is for building housing. And it is needed because the market value is less than the cost. It is hard to profit from a flip in that situation when the market rate is less than what it costs.

But in the end, if it builds more small houses/apartments, then that is all that is needed. Why should I care if someone later profits?
 

quikah

Diamond Member
Apr 7, 2003
3,643
383
126
I don't know about other areas, but in Palo Alto, BMR (below market rate) units are tagged for low income buyers/renters. They cannot be sold/rented normally.
 

dank69

Lifer
Oct 6, 2009
31,825
19,925
136

"$15 billion for the Housing Trust Fund, which provides grants to states for the construction and repair of affordable housing. "


or charging market rates for the apartments if it's an apartment complex?
Maybe nothing is stopping people from doing that. Maybe you should try it and report back on how much money you made and how easy it was.
 
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JEDI

Lifer
Sep 25, 2001
27,837
1,600
126
The money goes to:
1) $65B for repairing/replacing public housing, no buying and selling there.
2) $25B for rental assistance, no buying and selling there.
3) $15B to build and repair affordable housing.

I assume you are talking about item 3 only. In that case, only a part of it is for building housing. And it is needed because the market value is less than the cost. It is hard to profit from a flip in that situation when the market rate is less than what it costs.

But in the end, if it builds more small houses/apartments, then that is all that is needed. Why should I care if someone later profits?
never thought of the house being built would be underwater when put on the market. :eek:
hm.. in that case, why not just build Tiny Homes?

as to why i care.. it's my tax $.
why am i subsidizing a flipper?
but your augment makes sense in that it'll be hard to flip for a profit.
 

JEDI

Lifer
Sep 25, 2001
27,837
1,600
126
I don't know about other areas, but in Palo Alto, BMR (below market rate) units are tagged for low income buyers/renters. They cannot be sold/rented normally.
i can understand a no sale convenant for x # of years when you buy the house, but whats to stop someone from renting it?
 

dullard

Elite Member
May 21, 2001
23,809
1,994
126
never thought of the house being built would be underwater when put on the market. :eek:
hm.. in that case, why not just build Tiny Homes?

as to why i care.. it's my tax $.
why am i subsidizing a flipper?
but your augment makes sense in that it'll be hard to flip for a profit.
That is it, they are building small homes, ones that sell for less than they cost to build. I think that actual tiny homes are more expensive, since it takes complex equipment like composting toilets. But build something small.

Safe housing is one of the best returns on investments. It cost far less to give someone a home than to address any of the issues that homelessness brings (heath, crime, unemployment, etc). I'd much rather my $20 of taxes/year go to building someone a home than have to pay $50/year in emergency room fees because someone got too cold/hot. Why would fear of a potential flipper profit make you want to spend more tax money?

The construction company profits building the building. Boeing profits from military spending. Doctors profit from Medicare spending. All government spending is essentially profit to someone. Why is flipping where you draw your line?
 

fskimospy

Elite Member
Mar 10, 2006
75,556
29,599
136
i can understand a no sale convenant for x # of years when you buy the house, but whats to stop someone from renting it?
Usually the terms of the lease/purchase agreement. For example NYC has HFDC co-ops people can purchase that not only have income requirements, they also have what's known as a 'flip tax' where up to 50% or even more of any profit you make from the sale goes back into the building.

It's really easy to attach strings to prevent what you're talking about.
 

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