The City of Flagstaff continues to build spec homes, despite real estate values dropping nearly 40% and an abundance of existing homes for sale. Yes, for those of you who did not know, your tax dollars are being used to build spec homes. This is being done in the name of affordable housing. The question needs to be asked, should the City be in the house building business and are these homes any more affordable than existing homes that are for sale?
The other day I toured the construction site on Izabel St. for a small housing project being built by the Flagstaff Housing Authority. The home I toured was a 3 bedroom, 2 bath with a 1 car garage. It is built on City owned land and is listed for $162,000 and the land under the house will be leased to the new homeowner. The concept is that by the City owning the land and leasing it to the new homeowner, the price of the home will be lower and therefore affordable. To the Housing Authority’s credit it was a very nice home. The problem is that we are not living in 2006 during the height of the housing bubble when houses were on the market for a day with multiple bids and very few houses under $200,000. It’s 2012 and housing prices have collapsed by upwards of 40%.
Right now there are many homes and town homes for sale under $200,000. There are some fine, move-in ready homes out of that housing stock. For example; a 3 bedroom Christmas Tree home listed under $150,000 that’s been on the market for over 100 days, a 3 bedroom Shadow Mountain home listed under $160,000, a 4 bedroom town home for just over $140,000. Surely many of these homes will accept a fair offer. And for that price, you get to own the land too, no ground lease. So why would one buy a home for a higher price and not even own the land?
Granted, the homes the City is building are new construction. But most people I know are more than happy to buy an existing home in a nice neighborhood with a bigger yard on land they own. Most of those homes are ready to move in and will qualify for a loan just the same as the new construction and they are lower in price! Many peope buy an existing home as their first home.
I was told by the City Manager that there is currently about $800,000 available in this housing program to build more homes. This money was transferred from the general fund years ago and can be transferred back at anytime. That means the City can use this General Fund money for anything. Perhaps instead of being in the housing business and speculating with new home sales, we should transfer this money back to the General Fund. Surely there are better uses for these tax payer funds.
Please sign up for my blog at https://jefforavits.wordpress.com/
August 31, 4:00PM, 105.1, Mitch&Joe Show. Co-Host
September 20, 7:30AM, Coconino Country Club. Q&A with Councilman Oravits