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AFFORDABLE HOUSING FAIL: Central city projects keep falling apart for tax-exempt groups

Should well-meaning but incompetent non-profits butt
out of low-income neighborhoods?
 
COLUMBIA, 3/26/13 (Analysis) -- School board member and Central Missouri Community Action (CMCA) director Darin Preis should be eating his words.
 
"Never respond to the naysayers," Preis blogged, after criticism of CMCA's failed housing projects around the central city.

Turns out Preis should have listened to the naysayers.

Last month, a controversial but much-touted CMCA plan to house homeless youths at a 10-bed shelter on Seventh street, across from Hickman High School, fell apart when the non-profit failed to start the project after 5 years.
 
The failure followed neighborhood opposition, city funding, and a public relations campaign that included a Nov. 2011 groundbreaking and Preis' "naysayer" remarks.
 
The failure of three other housing projects this year is raising more red flags about non-profit groups whose management is not competent to buy, develop, or sell real estate.    Coupled with the Blind Boone Home and Heibel-March store disasters, the failures illustrate a taxpayer train wreck facetiously described as the City Hall-Non-Profit industrial complex.

Bailout package

Last week, the city announced three homes either constructed or rehabbed with tax dollars -- 711 Mikel St., 904 Madison St., and 411 McBaine St. -- failed to find buyers and would be "donated" to the Columbia Housing Authority (CHA) for conversion into rentals.  Non-profit Job Point and the city's Neighborhood Stabilization Program developed the homes as owner-occupied low-income housing.
 
411 McBaine might be sold to a private buyer, but Council members approved a bailout package: City Hall will purchase the house with taxpayer funds if the private sale falls through.
 
The "affordable homes" are anything but affordable, part of a continuing trend among Columbia-area non-profits to price their properties out of the market.   Rather than lower prices, they keep the homes as rentals in neighborhoods overwhelmed with renters.
 
So common has the practice become that observers fear a land-banking scheme is afoot, with taxpayer money surreptitiously used to buy up the very land developers, REDI, and the Blight Bunch have targeted for Eminent Domain: Central Columbia.

Job Point offered six homes for sale to owner-occupants on Madison, McBaine, Sexton, and Forest Avenues.   For 5 of the six houses, development costs alone run into six figures, in neighborhoods where a $75,000 sales price is too high.  Most of the houses are listed for well over $100,000. 
 
Job Point director Jim Loveless and city administrators blame the failures on the "real estate downturn."    But the downturn ended in Columbia at least two years ago.  

And any competent real estate agent could sell the homes if Loveless -- a developer-friendly former City Councilman -- and the city were willing to do what every other seller (without a taxpayer bailout) must: LOWER ASKING PRICES.
 
Instead, records say 904 Madison was listed for a whopping $102/square foot and 411 McBaine even higher: $107/sq. ft.
 
If HUD guidelines somehow prevent lower prices, then don't build or renovate in neighborhoods that cannot support higher prices.
 
History repeats
 
This year's failures remind of Job Point/CMCA low-income homes that failed to sell for the same reason in 2007.
 
Listed at $80,000 and $90,000, the small houses on Worley and Oak Streets sat empty for a combined five years after the groups blundered trying to sell them on their own.     "CMCA distributed flyers, contacted churches in central Columbia and sent out direct mailings to try to find buyers for the homes," the Trib reported.
 
Then as now, Job Point and CMCA blamed "the real estate slowdown and mortgage crunch."   But the crisis didn't blossom until 2008, as CMCA was failing to save the Heibel March Store, another City Hall/Non-Profit "partnership."
 
"I'm not sure how the failed attempt at renovating the Heibel-March building is a reflection on how we operate," Preis blogged.
 

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