Tax Abatement Is No Solution

[Mark Kindt]

Tax Abatement Is Not The Solution for Unaffordability

Even if you allocate a higher percentage of monthly income to rental costs (30% vs. 25%), there still remains an affordability gap against most categories of Lakewood residents.

While the tax abatement proposed by city council for the incoming developers is a financial boon to the developers, it is unlikely to increase affordability on the new units that are being built.

It is unfair to the city's rate-payers and tax-payers.

Fairness Caveat:

I have used Lakewood Center North only as an example of current market rates for high-end rentals. I am not suggesting that that project unfairly benefited from public subsidies.

I'm sure the reader understands that my primary point is addressed to the heavily-subsidized One Lakewood Place project and other new developments that will benefit from the new tax abatement legislation.

Even the one bedroom apartments are likely to be unaffordable.jpg (298.41 KiB) Viewed 4040 times

[Stan Austin]

You know--- Lakewood could have been the perfect test for the absence of tax abatements and the open bidding of public properties available to developers. The current model is a back arswards upside down model.

[Mark Kindt]

You know--- Lakewood could have been the perfect test for the absence of tax abatements and the open bidding of public properties available to developers. The current model is a back arswards upside down model.

Mr. Austin, at the end of the day, One Lakewood Place will be provided about $40,000,000 in direct and indirect public subsidies, including tax abatement.

Now all the incoming developers will be eligible for tax abatement. It's an open door policy.

Between the 50% rate increase in water/sewer rates and broader tax abatement, voters will have very strong and very sound reasons to vote down the proposed school levy next spring.

[Mark Kindt]

Tax Abatement Will Not Improve Housing Affordability For New Developments

The proposed changes to the tax abatement ordinance will not improve affordability for Lakewood households who would like to reside in these new developments. This is another illusion.

The majority of Lakewood households will not have enough income to even think about residing at One Lakewood Place, much less purchase a town-home there.

As we can see from the market rate for two bedroom units at Lakewood Center North (average $2,000), a Lakewood household would need an annual income of around $80,000 to lease a two bedroom unit there.

Is it reasonable for any of us to believe that the housing units at One Lakewood Place (or the other proposed developments) will be below market-rate? Of course, not.

Even with the proposed "set-asides" based on Area Median Income (AMI) it should become clear that the majority of Lakewood households will be priced-out of housing in the new developments.

Be patient, I will walk us through this, but it will take time.