Affordable Housing Gets Bum Rap
Affordable housing is about living life with financial options.
For some the home they live in is everything, it defines who they are and it is their primary investment. For others their home is a place to live. People have a diverse view on what the house they live in means to them, and people have different priorities.
We all have limited resources, from the federal government, to state budgets to Bill Gates and Warren Buffet. Typical retirees have fixed incomes and limited ability to increase net worth. Broad spectrums with one thing in common, limited resources.
It has been said “Money is good for the good it can do”. Money has time value, at 6% you pay $6000 per year to borrow it or get $6000 per year to lend it, time value.
Based on the fundamental principles of limited resources and time value of money, affordable housing is about personal priorities and the option of discretionary spending.
As an example using 6%, a good historical average $300,000 has a time value of $18,000 per year, while $100,000 has an annual time value of $6000 per year. Whether owned out right or mortgaged, you are either losing interest income or paying to borrow.
Sustainably Affordable housing offers the opportunity to those who chose to live in the $100,000 home to take the $12,000 per year difference and do as they wish in retirement. They may want the extra money to travel, spend on the grandchildren, or contribute to charities. The list is as diverse as people are.
There are those who would like to paint sustainably affordable housing into a “those people” class war. They like to use terms like workforce, subsidized, and low income, emotional charged stigmatized words.
Future retirees will come to view sustainably affordable housing as smart, prudent, comfortable, conservative, and emotionally satisfying. They will view their home as a place that meets their needs to live comfortably.
They will take the money they save and use it to enjoy life. As people grow to appreciate “house is a home” as a concept, rather than as an investment or measure of personal worth. Excess will be viewed as insecure arrogance, wasteful, and just plain stupid.
Government spending, industry bailouts, cap and trade, crumbling infrastructure, an aging population, escalating health and energy costs, and taxes, all point to one thing, we will contribute more and receive less, each and everyone of us, its guaranteed.
Eventually proper solar exposure and appropriate overhangs will define modern homes like indoor plumbing and electricity once did. I know you laugh now, but when you go outside in July in Mesquite, do you seek the shade, or in winter a warm sunny wall, it is intuitive and it is the future of housing. Sustainable affordable housing is basically energy efficiency combined with proper solar orientation.
Sadly many Mesquite retirees did not have affordable housing as an option. They have bought large expensive homes and in the process given up many of those discretionary spending options. This of course is really what affordable housing is all about, personal financial options. The City of Mesquite has avoided any earnest discussion about affordable housing for years now.
Given a clear picture of retirement goals and options, many well healed retirees will chose sustainably affordable housing. Not because they can not afford to spend more but because they have other things in their lives that are far more important. Life is short and priorities are important. Status and image are fleeting and hollow at best.
Sustainably affordable housing has been given a bum rap, a bad image, although this has come mostly from those concerned with status and image.
Mesquite has an opportunity to shape the future; sustainably affordable housing is achievable here. It will require bold leadership with commitment and action today. The future will be here before we know it.
Many future retirees who can spend $300,000 will come to Mesquite to buy those $100,000 green sustainably affordable homes. The reason is simple, they want to spend that extra $12,000 a year having fun, rather than an extra 1000 square feet to heat and cool.
$1000 a month extra spending money for the average future retiree will change their lives dramatically. It would be very good for local businesses as well.
Interest rates have been historically and artificially low, this will not last forever. The average conservative retiree will not take out a mortgage more than about 2 to 2.5 times their annual gross income. This points to a greater urgency today to address tomorrow’s sustainably affordable retirement housing.
Mesquite’s future depends on decisions made today by the current leadership and administration. They need to hear your thoughts on affordable housing in Mesquite.
Chris W. Miller
ERA Brokers Consolidated
Mesquite NV 89027