Liddick: Solutions to Colorado affordable housing crisis worse than problem (column)
December 11, 2017
Cynthia Lopez is stuck in her home, poor thing. Ms. Lopez bought a 1,200-square-foot home in Green Valley Ranch in 2012 for $150,000 – not a screaming deal, but a good one. This year, she decided to sell it and move up, in accordance with the time-honored traditions of the American Dream. She had a buyer offering $256,000, enough to allow purchase of a larger home. Then the Peoples' Republic of Denver showed up and shredded her dreams like a weasel hitting a chipmunk.
It seems Cynthia Lopez bought one of the Green Valley homes sold as "affordable housing." As such, she cannot sell it for more than $186,000, a 5 percent per annum increase. However, it appears there are no documents from the original sale advising Ms. Lopez of this, nor is there any written evidence that the city confirmed, or even inquired about, her income – a problem, since "affordable housing" is reserved for low-income buyers. If true, this means the city of Denver perpetrated a fraud on Ms. Lopez and, if the standard HUD-1 settlement statement was used, did so with federal forms. Will the FBI show up? Probably not. They're busy looking for Russians under the beds at Mar-a-Lago.
Nor is Cynthia Lopez the city's only victim. There are at least five other known identical cases, scores of similar situations and doubtless others not yet unearthed. After all, the city only hired a compliance officer for the program this June.
Questioned by reporters about Ms. Lopez' situation, Erik Solivan, director of the program afflicting her, was noncommittal but pointed out that all programs require enforcement. Two weeks later, Cynthia Lopez received notice from the city saying she was not in compliance with the affordable housing program and would have to put her house on the market within 30 days – at $186,000. And sell to someone who qualifies for the program. It is slowly and painfully dawning on her that she is a serf, who never really owned what she bought.
The program of which Ms. Lopez ran afoul is called "Housing Opportunities for People Everywhere." That's right: HOPE. It's run out of the mayor's office. One hopes they paid George Orwell's estate royalties.
Ms. Lopez' dilemma, shared with many others, is caused by a noble impulse perverted by base, self-contradictory or just plain incomprehensible ends. Misery like hers is all-too-often the end of government programs to "help" or "solve problems," from housing crises to poverty.
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The problem HOPE was created to solve was real: housing prices were rising, and not only in Denver. Colorado is a nice place and people are pouring in to live their own version of the American dream; the market responded in a completely predictable and logical manner: prices rose to meet demand.
On top of the natural growth in prices, new government regulations and restrictions made building in Colorado more expensive; the bill was tacked onto prices for new construction, as was the additional expense for any "affordable housing" the builder was forced to offer as a price for permits. Hobbled by new legislation governing liability, building slowed in certain sectors; prices accelerated. En voila, the need to "do something" about prices that froze the less-well-heeled out. Hence, "HOPE" and its sister programs across the state.
Was there a better way? Yes. As early as 2004, people like Stephen Hackman of the Independence Institute saw a government-made problem in the offing, a Frankenstein monster of regulation, subsidy, market interference, "green zones" and "planning" that would one day turn on its creators. He wrote about it in a monograph entitled "How Government Makes Housing Unaffordable in the Denver Metro Area" which advocated a much lighter government hand and a more agnostic approach to what an "ideal community" might look like. The warnings were of course ignored by the people who knew better, with the result we now have: people being told that their homes are not their own, and facing threat of dispossession in the name of the urban revolution.
If few people believed that programs like "HOPE" would usher in the peaceable kingdom, the situation would be beyond laughable. But many do believe, so the problems caused by misguided and mismanaged government efforts to save us all from ourselves are deadly serious, because sometimes their cure is worse than the disease.
Food for thought for those who think the government will wipe all tears away, when it won't even let Cynthia Lopez sell her own house for a profit.
Morgan Liddick writes a weekly column for the Summit Daily.
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