Jump to content

Downtown condo flippers

Richard Lawson

By Richard Lawson
in Nashville

Recommended Posts

producer2 Hamlet

producer2

Posted
Posted

kheldane,

You should not take two different quotes on completely different posts and put them into your rant as if they were one thought. My comment was in jest as it reads in my post and not related to the other comment. I was in agreement with the affordable housing issue.

Link to comment
Share on other sites

  • Replies 49
  • Created
  • Last Reply
Jeeper12 Hamlet

Jeeper12

Posted
Posted

I think Nashville's TIF program has run its course for new development in areas like Sobro, the Gulch, Midtown and even Church Street. MDHA has caught on to this and has been gradually reducing the amount of proceeds available (as a % of cost) without relaxing the 20% req'mt (20% of units must be afford). So, someone's earlier point that this program is simply enriching developers is off the mark. And MDHA is finding that it's not necessary to jumpstart projects in good locations anyway. So, they reason, why give up the future stream of tax dollars ?

I think a more fair question is whether qualified buyers of these units are benefiting too much from the discounts. I happen to agree that there is a public benefit to more folks living closer to city services and infrastructure. And I think that the sale/timing limitations (intended to prevent quick windfalls) require that some discount be available. However, in the last 3 years the future value of these units (the ones in luxury high rises anyway) has skyrocketted due to the escalation of prices in these high rises, while purchase prices haven't increased much (if you can get your hands on a unit). When those discount periods burn off the lucky buyers are going to have newfound equity in excess of $100k in many cases. I think that amounts to a windfall that exceeds the intended public purpose or benefit to the city.

I think someone also made a fair point that the taxpayers perhaps should not be subsidizing anyone (qualified or not) to live in a luxury high rise that they otherwise cannot afford. Cities all over the country are struggling with this question/issue.

I think that perhaps a more equitable and pragmatic approach would be to avoid trying to incorporate 20% (or whatever the % should be) into every building and, instead offer developers the option of paying into an MDHA housing trust in return for density bonuses (at the right locations). This would avoid the need to contribute city funds (TIF) and allow MDHA to be more deliberate about how and where to construct affordable housing. It may not be a perfect solution but I think it would be an improvement over the current programs.

Link to comment
Share on other sites
barakat Burg

barakat

Posted
Posted
Excellent! Since you're part of this program maybe you can explain to Jeeper12 and I why you deserve to have your housing subsidized by other metro tax payers. Why, exactly, are other metro tax payers responsible for helping you live "life as simply as possible"?

For my part, my life would be more "simple" if I didn't have to subsidize you living in your fancy condo.

Link to comment
Share on other sites
c00624 Unincorporated Area

c00624

Posted
Posted
I think Nashville's TIF program has run its course for new development in areas like Sobro, the Gulch, Midtown and even Church Street. MDHA has caught on to this and has been gradually reducing the amount of proceeds available (as a % of cost) without relaxing the 20% req'mt (20% of units must be afford). So, someone's earlier point that this program is simply enriching developers is off the mark. And MDHA is finding that it's not necessary to jumpstart projects in good locations anyway. So, they reason, why give up the future stream of tax dollars ?

I think a more fair question is whether qualified buyers of these units are benefiting too much from the discounts. I happen to agree that there is a public benefit to more folks living closer to city services and infrastructure. And I think that the sale/timing limitations (intended to prevent quick windfalls) require that some discount be available. However, in the last 3 years the future value of these units (the ones in luxury high rises anyway) has skyrocketted due to the escalation of prices in these high rises, while purchase prices haven't increased much (if you can get your hands on a unit). When those discount periods burn off the lucky buyers are going to have newfound equity in excess of $100k in many cases. I think that amounts to a windfall that exceeds the intended public purpose or benefit to the city.

I think someone also made a fair point that the taxpayers perhaps should not be subsidizing anyone (qualified or not) to live in a luxury high rise that they otherwise cannot afford. Cities all over the country are struggling with this question/issue.

I think that perhaps a more equitable and pragmatic approach would be to avoid trying to incorporate 20% (or whatever the % should be) into every building and, instead offer developers the option of paying into an MDHA housing trust in return for density bonuses (at the right locations). This would avoid the need to contribute city funds (TIF) and allow MDHA to be more deliberate about how and where to construct affordable housing. It may not be a perfect solution but I think it would be an improvement over the current programs.

Link to comment
Share on other sites
Jeeper12 Hamlet

Jeeper12

Posted
Posted
I agree that these programs have probably run their course, but I have to strongly disagree that the qualified buyers are benefiting too much. I think the developers themselves are benefiting too much. They're the ones that are supposed to be selling "affordable" units but are instead selling 500 sq. ft. condos for $160k+. I do not believe that the benefits the developers receive are really being passed along to the buyers. Similar size units in other developments that are not designated "affordable" are selling for the same prices. As far as purchase prices not increasing much, these units went for $100k a few years ago and now start at $150k. 50% is a pretty significant increase. If demand and the housing market slow down, these prices may be hard to sustain. Affordable buyers are also taking risks by buying units in these new developing areas.
Link to comment
Share on other sites
barakat Burg

barakat

Posted
Posted

^ Truth be told, all I did was fill out a form, and next thing I know I'm a home owner. Some of you seem to blame me for a perceived problem. I didn't create TIF or the concept of 'affordable housing.' I don't feel bad about it at all. I pay taxes too, people. The system worked for me, and yes I'll make 100k+ when/if I do sell.

Those of you who are anti-affordable housing -- are you home owners or renters?

Link to comment
Share on other sites
Kheldane Whistle-Stop

Kheldane

Posted
Posted
Are you familiar with using TIF and eminent domain to stimulate redevelopment in a blighted area? It's about positive effects on the health of the city as a whole. TIF as I know it comes from federal grants, not metros tax coffers. I pay taxes too; maybe I can help subsidize your next home.
Link to comment
Share on other sites
Jeeper12 Hamlet

Jeeper12

Posted
Posted
^ Truth be told, all I did was fill out a form, and next thing I know I'm a home owner. Some of you seem to blame me for a perceived problem. I didn't create TIF or the concept of 'affordable housing.' I don't feel bad about it at all. I pay taxes too, people. The system worked for me, and yes I'll make 100k+ when/if I do sell.

Those of you who are anti-affordable housing -- are you home owners or renters?

Link to comment
Share on other sites
c00624 Unincorporated Area

c00624

Posted
Posted
You'll have to be more specific about the 500 sf units selling for $160,000, or $320/sf. I don't think that has or is occurring but please identify a unit if I am incorrect about this. To your point about developers benefiting too much lets look at the Viridian. That developer received a $6 million TIF loan and as a result had to set aside about 60 units and designate them "affordable". I think you will find that almost all of those units sold for approximately $135,000 and that included a $10-12k parking space. As we now know, Viridian units are reselling for approximately $385/s.f. If you do the math that suggests that perhaps the developer could have sold the "affordables" for $240k to $250k (including the cost of a parking spc). That's $110kx60=$6.6 million in lost revenue, or about the amount of the TIF. Even if you take $40-$50/sf off of that number to reflect the market 12-18 months ago I still think this math suggests that the buyers are benefiting far more than the developer.

You would be correct in pointing out that the buyers must wait 5 yrs to sell and that there is uncertainty about how the market will perform in the interim. However, I think most people would be comfortable getting in at $215-230/sf knowing that the market already appears to be approaching $400/sf. Of course it could go down (in theory) but it could also go up significantly in 5yrs and that's what most experts seem to be expecting. Where else can one hope to earn 7-8 TIMES their money (10% down payment) in 5 years ? Pretty darn good deal (risk/reward) if you can get it, I think.

Link to comment
Share on other sites
Black and White Whistle-Stop

Black and White

Posted
Posted

quote name='barakat' date='Jan 9 2007, 12:16 PM' post='665708']

^ Truth be told, all I did was fill out a form, and next thing I know I'm a home owner. Some of you seem to blame me for a perceived problem. I didn't create TIF or the concept of 'affordable housing.' I don't feel bad about it at all. I pay taxes too, people. The system worked for me, and yes I'll make 100k+ when/if I do sell.

Those of you who are anti-affordable housing -- are you home owners or renters?

Link to comment
Share on other sites
Kheldane Whistle-Stop

Kheldane

Posted
Posted
Kheldane,

I bet you have or had kids in school. I don't but I paid for yours and I was/am happy to do it. It is just a point to say that not all programs work for everybody's situation. I am sure there are as many pros as cons for this and most programs.

Link to comment
Share on other sites
Kheldane Whistle-Stop

Kheldane

Posted
Posted
Pretty soon I'll be paying so much to make everybody's life affordable that I'll fall into the affordable category myself. Hey wait a minute, could that be the plan for the government to start taking from those according to their means and giving to those according to their needs. Sure sounds like it.
Link to comment
Share on other sites
producer2 Hamlet

producer2

Posted
Posted
^No kids myself but family members with kids in Davision co. used home schooling. Metro schools are for suckers... .

If you willingly pay for other people's education then that just shows you have poor money management practices, it doesn't prove you're a noble contributor to society. I can 100% guarantee if Metro government gave two line items people can choose from on their annual property tax bill (one including education costs and the other without educational costs) the vast majority of metro residents (probably including you) would choose the small dollar I'm-not-going-to-pay-for-education amount. You can claim it, but I really doubt whether you would (if given the choice) spend thousands on someone else's kid. Maybe I'm just cynical like that. I know I wouldn't spend it, nor will I need it spent on my kids (homeschool).

However, the last line of your post interests me greatly. What, in your opinions, are the "cons" of funding public schools with tax money? Bear in mind, I'm not asking what's wrong with public schools themselves, I'm asking what are the "cons" with funding them with tax money.

Link to comment
Share on other sites
gop Crossroads

gop

Posted
Posted

ok.....I'm new to this whole thing. Only my second post EVER....Anywhere. I hope I'm doing it right. I'm a real novice. Anyway, on subject....I bought a unit at the Viridian before they ever broke ground. I did it for the purpose of flipping. I closed in November. I now have a contract on it to sell and will close in February. I made a significant profit. Someone who is opposed to this practice please educate me.

Link to comment
Share on other sites
Resident Unincorporated Area

Resident

Posted
Posted

:whistling:

ok.....I'm new to this whole thing. Only my second post EVER....Anywhere. I hope I'm doing it right. I'm a real novice. Anyway, on subject....I bought a unit at the Viridian before they ever broke ground. I did it for the purpose of flipping. I closed in November. I now have a contract on it to sell and will close in February. I made a significant profit. Someone who is opposed to this practice please educate me.
Link to comment
Share on other sites

Archived

This topic is now archived and is closed to further replies.

Go to topic listing

  • Recently Browsing   0 members

    • No registered users viewing this page.
×
×
  • Create New...

Important Information

By using this site you agree to our Terms of Use and Privacy Policy. We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.