Affordable Housing Institute : US

[Continued from the previous Part 1 and Part 2.]

 

So far our exploration of Cornerstone Apartments in Haltom City, Texas, has covered rapes, shootings, backed-up sewers, dead rats, no heat over a weekend, enormous water bugs, and an astonishing flyer from the management agent demanding that residents repair defects that are the owner’s responsibility and tacitly threatening them with the loss of their children (since disavowed).

 

What standard of performance should we expect?  Should we make allowances for Mr. Hance’s busy schedule?  After all, he is sponsor of fourteen properties and has a full-time job three hundred miles away.

 

 

Kent Hance, a former congressman and ex-state senator who is chancellor of Texas Tech University, says he has poured more money into the complex than he ever got out of it –

 

A man who has “poured money into the property”

 

Perhaps so.  If we had the complex’s financial statements, we could see what if anything Mr. Hance has lent into the property versus what he and his partners have taken out.

 

The property is not Mr. Hance’s sole, or even principal, source of revenue from Cornerstone Apartments.  Sale of the LIHTC to tax-motivated investors will have generated a substantial developer’s fee to Mr. Hance’s company.  So I suspect his company is well ahead, on balance – and even if it were not, where is it written that the amount one must or should put into a property is limited by what one has previously taken out of it? 

 

“I wish to be left alone,” said Scrooge. “Since you ask me what I wish, gentlemen, that is my answer.  I don’t make merry myself at Christmas and I can’t afford to make idle people merry. I help to support the establishments I have mentioned–they cost enough; and those who are badly off must go there.”

 

What business are you in, Mr. Hance?

 

“It’s enough for a man to understand his own business, and not to interfere with other people’s.  Mine occupies me constantly. Good afternoon, gentlemen!” 

 

I wear the chain I forged in life.  I made it link by link, and yard by yard.

 

– and [Mr. Hance says he has] always fixed any problems the state pointed out.

 

That’s not the standard, Mr. Hance.  It’s not the state’s job to point out problems in your property.  It’s your job to spot them and fix them whether or not the state or anybody else is pointing them out.

Hance said he feels a moral obligation to maintain Cornerstone.

 

“Otherwise,” he said, “I would have walked away five years ago.”

 

Had you walked away five years ago, Mr. Hance, your investors would have suffered substantial tax recapture.  You get no moral credit for staying in the face of recapture, interest, and penalties.

 

He also says he has done his best.

 

“I tell you, people renting there get a bargain compared to what they get at any other place.”

 

That is no defense, Mr. Hance.

 

 

Forget moral obligations, you are legally obligated to give them a bargain rent, and to provide quality affordable housing at that rent. 

 

Mr. Hance has no inner qualms about his ownership:

 

“I don’t feel I ought to make it like living in Highland Park, Dallas. That wasn’t the purpose.”

 

I’ve previously written about the disgusting mentality which says that ‘those people’ do not deserve quality affordable housing:

 

Ever since I started in affordable housing thirty-plus years ago, knowing nothing about it but what I observed and deduced, I’ve been confronted with prejudice against ‘those’ people:

 

·         Those people aren’t like us.

·         Those people are lazy and just don’t want to work.

·         Those people are just out to beat the system.

·         Those people have too many children.

 

Pots for sale, Kibera, Nairobi, Kenya

 

After all, we don’t need to give ‘those people’ anything too comfortable to live in, do we?

 

“At this festive season of the year, Mr. Scrooge,” said the gentleman, taking up a pen, “it is more than usually desirable that we should make some slight provision for the Poor and destitute, who suffer greatly at the present time. Many thousands are in want of common necessaries; hundreds of thousands are in want of common comforts, sir.”

 

 

“Are there no prisons?” asked Scrooge.  “And the Union workhouses?  Are they still in operation?”

 

 

“Many can’t go there; and many would rather die.”

 

“If they would rather die,” said Scrooge, “they had better do it, and decrease the surplus population.”

 

Mr. Hance wishes no such ill upon his tenants:

 

“I don’t think you could find anyone else who would put that kind of money in a project,” Hance said during a phone interview.

 

Actually, Mr. Hance, you could find a great many owners who would do that.  Some of them are non-profits.  An extremely good one has its headquarters in Austin.  A national non-profit with a long and successful track record has its Texas office in Fort Worth.  Some are large for-profits who value their reputation as high-quality owners and managers.  Allow me to call them to your attention.

 

What then must we do?  

 

We must shave our beard, that’s what

 

Tolstoy asked it a hundred and twenty years ago.  In Mr. Hance’s mind, he has done what the owner should; he has used the residents’ rents to pay such expenses as he could.  The flow of tax credits – well, that’s just a sideline. 

 

Rapes, shootings, break-ins, rats, water bugs, leaks.  They’re not your problem, Mr. Hance. 

 

You’re only the owner. 

 

`Or would you know,’ pursued the Ghost, `the weight and length of the strong coil you bear yourself? It was full as heavy and as long as this, seven Christmas Eves ago. You have laboured on it, since. It is a ponderous chain!’

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