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

[JEDI]

Biden framework includes $150B for affordable housing

President Biden’s proposed climate change and social services bill is expected to include $150 billion for affordable housing creation and financial assistance, elating supporters who feared it wou…

thehill.com

"$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]

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.

 

[sandorski]

Most likely Rental properties.

 

[pauldun170]

Edit - Never mind already have a full afternoon

 

[dullard]

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]

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]

Biden framework includes $150B for affordable housing

President Biden’s proposed climate change and social services bill is expected to include $150 billion for affordable housing creation and financial assistance, elating supporters who feared it wou…

thehill.com

"$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.

 

[JEDI]

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.
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]

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?

 

[sdifox]

i can understand a no sale convenant for x # of years when you buy the house, but whats to stop someone from renting it?

There are always string attached. If you qualify to buy affordable housing, chances are you cannot buy otherwise.

 

[IronWing]

Remember: if there is a conceivable way to scam a program, we shouldn't implement it, no matter how much good the program might do. People steal beer from convenience stores; we should close them all.

 

[dullard]

never thought of the house being built would be underwater when put on the market.
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]

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.