10/05/2005: "Almost Tempted To Bet Gordy"
I was almost tempted to take Gordy up on his wager. I can always use an extra thousand dollars and having Gordy show us how to build a 1500 square foot three bedroom house including land, construction and improvements for $250,000 with private capital alone (the amount affordable by a senior teacher and which would also include an assist on the equity down payment), would be an enjoyable exercise. But, this is a much more serious issue than that. I went back and reread his column. I know that Gordy is serious in his beliefs and I began to think about how one might reasonably compare his "private capital only" position to what we are attempting to do with the Housing Bank. That might make an interesting debate, but would not be likely to solve any real problems.
Rather, a businessman must know the difference between simply having a political point of view and the practical issues of solving problems of financing, compound interest, wage costs, and market appreciation. A businessman must work to solve problems within the set of constraints that exist around him. He cannot allow himself to be drawn into speculations about how his job might be easier if only the real world would somehow conform to his particular political position. So, what are the constraints here? It is not exactly rocket science. Real estate appreciation has reached the point where salaries are not sufficient to qualify moderate income families for financing to purchase a home. We are not likely to change the cause of that, nor are we well advised to enslave ourselves to an idle hope to unravel 20 years of legislative and regulatory change. Those on the right might wish for a world in which only Adam Smith's silent hand guides the economy and those on the left might wish for a world dominated by social engineering. In our current situation neither is likely to happen, at least in a time frame that might help solve this problem.
Practically speaking, we need to agree on some very fundamental points. It makes no sense to hire a law enforcement officer and put him in a financially impossible situation. That is asking for a much more serious problem. It makes no sense to expect emergency fire, EMT and paramedic personnel to be available when we need them, 24/7, unless they live in our community. If such critical service employees have to commute from the mainland, it would require tripling budgets to cover multiple shifts and use of salaried staff rather than volunteers. It makes no sense to have teachers unavailable for meetings with students needing help because they have to catch a ferry. I could go on, but I think that the point is made. These are not bleeding heart issues, but practical economic issues. These are not people who are looking for a free ride at the taxpayer's expense, but hard working and highly valuable citizens who are smart enough to realize that they can afford a home on the mainland while they cannot afford one here. They are professionals valued in their current communities and have little reason to come to the islands or remain on the islands unless we can create a climate making it worth their while.
Therefore we need to work together, left and right, to find real world solutions to these problems today. We know, from our spreadsheets, research and analysis, that we are at a critical point. There are solutions that can work, but time is not being kind to us. Now is the time to implement solutions so that we can have the opportunity to argue the politics of the issue at our leisure.
So, let me put it back to you. If your contractor friends can build houses that are competitive with the mainland (or even close), we would like to talk with them. If you can show us approaches to financing that will allow moderate income families to purchase these homes, we would like to see what you have. Help us by being part of the solution, not the problem. But, don't waste everyone's time with wishes about a more perfect world. It ain't gonna happen in time to help!
If anyone reading this column is interested in working constructively toward solving this problem, please contact us. Let's work on real solutions. Be informed. Visit our website at http://SanJuanHousingBank.org/
Stephen A. Garrison