At issue is dealing with the increasing number of foreclosed properties and the lack of affordable housing for the poor. Never mind that the crisis is brought about by the increasing number of the poor; not the decline in the number of housing units. New Jersey just got some money from the federal settlement with banks and the Legislature can’t wait to spend it as if the cash were hot coals burning through their pockets.
In this case, it is the democrats who lead the charge toward fiscal debacle. The approach sounds very logical at first glance but the devil is in the details and above all, the application. Will the new agency be managed by professionals or just serve as refuge for more political hacks who may bungle everything? Depending on the execution of the plan, this could be a success story or just another sorry show of government waste.
And once properties are bought and refurbished with public funds, who is going to purchase them? The fundamental problem we face is not lack of housing; it is that people can not afford the housing. That means that we have a deficiency in wages and jobs.
And then comes the issue of property taxes: Too high for all but particularly onerous for those on fixed or of low income. If property taxes are abolished – as I propose – that would change the picture. The quandary is that, to be in compliance with the Mont Laurel decision, as the standards of living of many New Jersians decline, we must lower housing costs as well. But as the standards of living continue to decline, how can we keep up with ever lowering housing costs? Of course it is an impossibility.
Housing costs, for the owner or renter, are a partial function of property taxes: The higher the tax the higher the cost of living in the house.
Enter then the public safety issue: If anyone thinks that by fixing houses, the security situation improves, think again. That is not how it works. Fresh paint does not deter crime.
The advantage of not having property taxes is that renovators/speculators/investors or whatever you want to call them can purchase foreclosed homes at today’s low cost and fix them up at a much lower risk because the property taxes won’t be draining them while they wait for a buyer or renter. So there would be much more activity in that market with the lower risk.
But the problem is urban areas is different. The security issue must be addressed before the housing renewal happens. Private capital is not attracted to crime-ridden areas and the government can not supplant the private sector. The State of New Jersey simply does not have enough money for that.
Senators Lesniak and Buono are counting on the bonding authority of NJ HMFA – that means more borrowing. Yes, we balance the state budget every year but the independent agencies are bonding the state’s future right and left. Every independent authority bond is backed by the good faith and credit of the State of New Jersey. I hope everyone knows that.