To great fanfare, the Allegheny County Chief Executive boasted of how wonderful the newly completed low income housing units in Braddock are. According to the Exec this development exemplifies that inter-governmental cooperation is working well.
Well, maybe not that well after all. The problem is that the 24 new housing units cost $9.5 million with the taxpayer picking up the lion’s share. UPMC put up $3 million and the rest comes from government in the form of grants and tax credits used to secure bank lending.
The per home cost amounts to nearly $400,000. In the private sector, the annual rent for a $400,000 home could run to $2,500 per month or more, depending on the health of the real estate market. The actual rent paid for these units will come nowhere close to the market value. Moreover, In Allegheny County, depending on the school district millage, a home of that value would easily have a yearly property tax bill of $10,000 or higher.
Thus, not only are taxpayers heavily subsidizing the construction of these homes, which means the rents will be enormously subsidized, but the properties will pay no property taxes that residents in non-public housing have to pay. As a result, the homes will be an additional drag on County, school, and municipal resources to the extent the use of county, school and municipal services are used by residents.
And in 2013 this is what passes for good government use of resources in some quarters.
