A lot of Developers in Dallas have been applying for funding through HUD and being turned down by the city of Dallas. To be eligible for HUD financing 51% or more of the units have to be “affordable.” Dallas receives HUD funds from the federal government but then denies its developers access to those funds because does not want too much low income housing in Downtown. So basically author of this article believes Dallas is making a conscious effort to deceive the FEDS by accepting HUD money but then not using it for its intended purposes. A lot of this has to do with the image we have in our minds of low income housing. When someone hears low income housing they may think of drug dealers and prostitutes etc. and I really think this is the case here. I have never been the biggest Dallas supporter but I believe this is what is going through Dallas city officials’ minds. Dr. Forgey then made a very good point that to truly create diversity and a live work play environment then you need to have affordable housing for the people that serve food, clean toilets etc. (Don’t want to sound elitist but it does bring up an interesting point).
We discussed for a while the social obligation someone may feel to help find low income families find a new place when they are being forced to relocate.
When a group find a development with actual affordable housing it can cause an economic boom in the area. It makes sense because if it is truly affordable people will not live outside their means and have more discretionary income. This leads to more profitable businesses in the area which could also drive up property values.
Thought for the Day: If any average Joe off the street is making money buying and selling real estate then something is fundamentally flawed because it should not be that easy.
TAXES
The U.S. is broke so trying to figure out how to generate more revenue. Basically, they are proposing taking away the capital gains tax and taxing the income at your tax bracket, essentially turning a 15% tax rate into a 30%+ tax rate. Maybe too much money is chasing real estate deals and this will take away some of the players in the market. Policy has skewed real estate values in that it transfers risk from individuals and corporations and lenders to society.
In San Francisco they are proposing that tenants that rent a space would have to pay a commercial rent tax. This is absolutely retarded in that it will do nothing but drive small businesses out of San Francisco. Shifting burden away from landlord and on to the tenant is what this is doing.
INDUSTRIAL
Retailers are tightening up inventories therefore manufacturers are not getting the orders needed which leads to a lot of available space. Canada’s economy is strong at the moment and going through their own real estate bubble.
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