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Many in the affordable housing community will be acutely aware of last year’s “Building ‘Taj Mahals’ with Taxpayer Money*”, a scathing critique leveled at the rising cost of low-income housing tax-credit projects. Posted July 21, 2011 in the Voice of San Diego, the article contends that increasingly competitive requirements for amenities, green features, and site location have driven the cost of developing affordable housing to be more than double that of private, market-rate developments (At least, such seems to be the case in California).
The basic justification for any sort of taxation in a democracy is that taxes levied will be used for the general public benefit. Ranging from military defense and sewer systems to schools and vaccinations, these publicly funded goods and services improve life for the aggregate. Self-interested Keynesian economics dictate that without the intervention of public policy, many services critical for the success of large-scale economies would remain unfunded by the private sector.
And so we arrive at the questions that beg to be asked: is the low-income housing tax credit program a just use of tax-payer funds? Does the program benefit only the select few who happen to income-qualify, or is there a greater public benefit to all the rest of us who are footing the bill? Perhaps most importantly, should these affordable housing projects include nice amenities, or just provide for the basic necessities of life?
These questions, abstract and remote last July when I first read the diatribe of Taxpayers and Taj Mahals, came into sharp focus recently when one of our own projects came under fire from Utah’s tax-credit administering body for providing too many amenities. Suddenly my positions on the issue, previously certain and dogmatic, found themselves on shaky ground.
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