Federal Loan Guarantee Helps Build New, Welfare Town Homes in Wytheville, Virginia

Federal Loan Guarantee Helps Build New, Welfare Town Homes in Wytheville, Virginia

Re: High Meadows Town Homes Rural Development Event

January 12, 2010 Let me understand what is going on here. The taxpayers will shell out as much as $9.5 million in corporate welfare and loan guarantees so a private developer can rent to mostly Section 8 welfare recipients? And like all of this kind of housing working people that earn a living I'm sure will be barred from renting them. And I'll bet anything they will refuse to check the immigration status of the renters. Let's see $9.5 million divided by 60 equals almost $160,000 per unit.

City-Data.com on Wytheville:
Median price asked for vacant for-sale houses and condos in 2008 in this state: $286,347.
Median contract rent in 2008: $464 (lower quartile is $262, upper quartile is $627)
Median rent asked for vacant for-rent units in 2008: $402
Median gross rent in Wytheville, VA in 2008: $560

The cost of renting these new units will range from $375 to $575 per month. This is no radical change from existing rents, so why are the taxpayers funding this? It seems a lot of people won't rent to Section 8 renters and for good reason.

To quote Mr. Boucher:

I am pleased to join you in Wytheville today as a new, federally funded housing development opens, which will provide high quality, affordable homes for Wytheville residents. The new High Meadows Town Homes fill a great need in our community-the need for high quality, affordable rental housing. The town homes will provide more housing choices for families who may not be able to afford to purchase a home in the Wytheville area. The new town homes have been built with the assistance of a federal guaranteed loan of $2,125,000 provided at my urging by the U.S. Department of Agriculture through its Rural Development Agency for which we will be presenting a certificate today. This amount represents the first loan guarantee made through the Agency's Guaranteed Multi-Family Housing Loan program in Virginia. The program provides a federal guarantee for loans made by a private lender in developing high quality affordable housing.

With the benefit of the federal guaranteed loan of $2,125,000, High Meadows Associates, which is based in Radford, has constructed a town home community here on East Main Street in Wytheville. The community includes ten one-bedroom, twenty two-bedroom, and thirty three-bedroom town homes. The cost of renting these units ranges from $375 to $575 per month. The total cost of building the new High Meadows Town Homes was $9.5 million. The construction and financing of the new homes is the result of a cooperative effort on the part of a number of partners. In addition to the federal guaranteed loan, the Virginia Housing Development Authority has provided tax credits to High Meadows Associates in the amount of nearly $700,000 annually over a ten year period. This amounts to more than $6.8 million in equity to help with financing the new construction. I am pleased to note that new town homes are now available for rental by residents.

More:

Virginia's First Multi-Family Housing Guaranteed Loan Provided by USDA

A standing room only crowd welcomed Congressman Rick Boucher of the 9th District in Virginia and Ellen M. Davis, State Director for Rural Development at the January 12th funding event in Wytheville, Virginia. The ceremony highlighted the very first USDA Guaranteed Multi-Family Housing loan in the state. "The new High Meadows Town Homes fill a great need in our community-the need for high quality, affordable rental housing" said Congressman Boucher during his remarks.

The new town homes were financed by a $2.1 million dollar guaranteed multi-family housing loan made by Lancaster Pollard Mortgage Service. The total cost of the project is over $9 million dollars and will provide 60 new modern, energy efficient one, two and three bedroom apartments to the Wytheville main street corridor.

Submitted by Vern Orrell, Assistant to the State Director, USDA Rural Development, VA Jan 14, 2010
Ref. http://www.usda.gov/blog/usda/tags/rurdev

To quote the Bristol Herald Courier (June 11, 2008),

A third of Bristol's residents need affordable housing, said Mayor Jim Rector, and "public affordable housing is the way to go. In private housing programs, the only goal is profit, while public programs do what is best for residents."

Instead of warehousing poor people forever in public housing they should be given the tools to become self-sufficient and be held directly responsible for their irresponsible conduct.

To quote Rex Todd of Winston-Salem, N.C.-based The Landmark Group, "Rather than have the working-class people sequestered on one side of town and the rich on the other side of town, the idea is to integrate people..." More here...

To quote Washington County supervisor Paul Price, "The rich get richer, and the poor never catch up." More here...

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