Wednesday, October 29, 2008

Obamanomics at work in Pitkin County

"Spreading the wealth around" doesn't just occur at the federal level, despite all the focus that redistribution has received in the presidential contest. It takes place at the local level too, as a story in yesterday's Aspen Times makes clear.

Pitkin County commissioners are mulling a six-fold increase in their "affordable housing mitigation fee," according to the paper, which is actually a tax levied on builders -- and the buyers of what they build -- that's used to fund affordable housing projects in the area. It's redistribution of wealth, plain and simple: Some people pay more for a home or building than they need to, so the county can provide other people with subsidized shelter. This creates the illusion that "affordable housing" is increasing, when the net effect is to make building and housing county-wide much more expensive, deepening a "crisis" county leaders are trying to solve.

But this is what can happen when economic illiterates are in charge, and when do-gooder dogma supplants reason in policymaking circles.

As the cost of building these "affordable housing" units has risen -- a consultant hired by the county estimates that “a subsidy of $394,200 is necessary to make a 1,000-square-foot residential affordable housing unit in 2008” -- the tax extracted from builders (and passed on to customers) doesn't go as far. So now the county may raise the tax, possibly by a factor of 6, which will increase the overall cost of housing on most people in the county, while benefiting a minority of folks who win the affordable housing lottery.

If it really wanted to promote affordable housing, Pitkin County would be reducing barriers and costs for builders and developers, which would increase housing stocks and reduce sticker shock. But Pitkin County wants contradictory things: It wants to control "growth" and effectively punish developers, while offering ample affordable housing for its non-wealthy residents.

Until it recognizes the error of its ways -- and realizes that "spreading the wealth around" isn't just unfair, but also counterproductive -- the situation will only get worse.

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