Dave Hultin published the following article on Affordable Housing in the Real Estate Guide, June 2008.  Pease click on the link below to download an Acrobat PDF of the article:

Affordable_housing_requires_morality.pdf

KSFR Radio Broadcast, Diego’s Journey Home, May 1st, 2008, Featuring a Discussion on Affordable Housing with Kim Shanahan, President of the Home Builders Association, Santa Fe Mayor David Coss and Michael Loftin, Homewise Corporation.  Thanks to KSFR for allowing us to reproduce the broadcast here.

The following letter has been sent to the Santa Fe Area Home Builders Association Membership from Kim Shanahan, Vermejo Park Construction and 2008 President of the Santa Fe Area Home Builders Association:

To: Santa Fe Area Home Builders Association Members:

The Santa Fe Area Home Builders Association is getting ready to seek an intervention in a suit filed by a number of local developers, including Dennis Branch, a member of SFAHBA, in U.S. District Court against Santa Fe County and the City of Santa Fe.  The suit seeks to invalidate The City’s and the County’s affordable housing ordinances as violations of certain Constitutional Rights.  As the Association embarks on this course, it is important that our membership understands the motives and intentions and be ready to assist in potential costs.

In the interest of full disclosure, let me say that Dennis Branch and I are partners in Vermejo Park Construction, but not in development ventures.  I am not a plaintiff in the suit.

The suit seeks to address an inequity in the way the City and the County have attempted to address the affordability of housing.  As you may know, the City and County ordinances, though they differ is some respects, essentially require that a certain percentage of homes be sold a fixed prices which are below market values for the homes and require that the homeowner give the government in interest in the home to the extent of the difference between the fixed price and the market value of the home.  Of course, the equity really comes out of the pocket of the seller because the seller is required to enter into the transaction.  The equity in the affordable home is then shared between the government and the homeowner.  This scheme is seen as unfair to both the seller, who have lost money on the sale (property) and the homeowner who must share equity with a government.

When the developers first considered the suit they asked SFAHBA to join them as named plaintiffs.  On the advice of attorney Karl Sommer, who was retained by SFAHBA to advise on the matter, we declined but asked for the opportunity to intervene, which meant that we could join the suit as a separate but equal plaintiff.  Whether or not we, as an organization, will be allowed to intervene will be decided by the court since intervention is only allowed to parties who are potentially aggrieved by the action complained of in the suit.

We believe the ordinances affect every member of our association, even those not directly involved in building and developing affordable housing, because of the chilling effect it places on our industry as a whole and especially because of recent amendments to the City ordinance which drastically increases fee-in-lieu payments on “developments” as small as single family lot splits.

On a personal note, I am not opposed to affordable housing and am proud to live in a community that places such a high priority on the development of affordable and decent housing.  As a member of the City’s Planning Commission in 2005 I voted for and helped persuade other commissioners to vote for the current ordinance.  I am also not opposed to the requirement of 30% or the prices at which houses must be sold.  But I have come to believe, as the plaintiffs do, that affordability is an issue that must be addressed by the entire community and not just one sector of the community – a sector which does not create the lack of affordability in our housing market.  The lack of affordability results from many factors – supply, demand, income levels, regulatory structure, interest rates, etc.

The time for us to consider intervention is upon us.  We will soon be asking our attorney to file the intervention on our behalf.  When that happens, the legal meter starts running and gets expensive quickly.  ...  If it is decided that we do not have “standing” in the case then we will be denied intervention and will be limited to filing an “amicus briefs” which will only be an opinion the court will consider in its decision.

One of the unique requirements of filing a case in Federal District Court is that plaintiffs and defendants have to enter into mediations prior to getting before a judge.  That will provide the City and the County with an opportunity to change the nature of the ordinances and to establish new policies for funding affordable housing which would address the grievance that the suit seeks to correct.

The Santa Fe Area Realtors are proposing a community-wide conference this spring on affordable housing, which SFAHBA will cosponsor.  This event could be a forum for putting all stakeholders at the table to come up with new thinking on how to solve once and for all a persistent and real problem for our area.

Until then, however, we will be going forward with our legal options.  We ask all members of SFAHBA to contribute to these efforts and pledge your support and your dollars to this effort.  We will be establishing a Trust Account to accept contributions to this legal fund.  All contributors are expected to remain anonymous.  Our builder/developer members need to really step up, especially those who lose tens of thousands on each affordable house transaction, but all of us are affected by these ordinances.  Please consider at least $100 as a minimum contribution to the legal fund and call Gary today at 982-1774 to make your pledge.  The future of homebuilding in our community is at stake.  That means your livelihood and mine.

Please post your comments concerning this action.