Re: Federal Expenditures


"Islander" <nospam@xxxxxxxxxxx> wrote in message
news:Xcadne32O685d5TZRVn-jQ@xxxxxxxxxxxxxxxxx
Jerry Okamura wrote:


We are experiencing an example of this locally and I believe that your
islands are as well. We are experiencing an influx of wealthy people who
are driving up the price of real estate to the point that even middle
income families cannot afford to purchase a home. There are no longer
any homes available for less than $200K and the median price of a home is
now $475K. Real estate prices have doubled in just 3 years. The result
is that we are having difficulty filling critical skill jobs needed to
support the basic island infrastructure. These same people scream bloody
murder at any hint of increasing taxes so that we can pay sufficiently
high salaries to attract and retain the workers that we need. Unlike
most communities commuting from less expensive areas is not possible. We
know that we are losing our younger families--there are fewer here today
than 15 years ago while the overall population has grown by 50%. Here,
the gap is enormous. Average salaries are $26K/yr while over 1/4 of
total family income is in just 1.9% of our population. We live in a
wonderful place, but as the population ages we are beginning to see
problems emerging. Lowering taxes won't solve the problem and in our case
would make it worse.


Okay, let me try to tackle the basis of your argument. Homes become
unaffordable when the spread between the price of that home and the
wealth of the average Joe becomes too wide. There is relatively nothing
you can do that could effectively lower the cost of a home, because the
biggest cost element is the land... other than perhaps free up more
land. That of course won't work either because no landowner is going to
put up their land for sale for less than they can get on the open market.
I suppose one argument that could be made is if the government bought the
land, and sold it for far less than they bought the land for... The
cost of building the home itself, has not changed substantially over
time. So, what can we do about those basic facts. Well, since you
cannot do a whole lot about the cost part of the equation, the only part
that you can do something about is the wealth of the individuals, so they
can afford to buy that home. It does not help the individual to be able
to buy that home, when the government takes a good chunk of what they
earn to spend on their pet projects. As I understand it, the government
takes about 40 cents of every dollar that a person earns away from them.
I am sure, that if the government did not take such a big chunk of a
persons earnings, more people would be able to afford to buy that home.
As for your comment that people are screaming bloddy murder at any hint
of increasing increasing taxes so we can pay higher salaries, that does
not make any sense at all. As for your comment that we are losing our
young families, that is what happens when we have a society puts a very
high price on raising a family. When people think the risk outweigh the
advantages, then they will tend not to want to take the risk. I do not
know what island you are talking about, but if you are talking about
Hawaii, income is relatively low here in Hawaii, because our main
industry is tourism. A good number of the jobs that are needed to feed
that industry are not going to be the high paying jobs...they will mostly
be the lower paying jobs...
There are basically three approaches that have had some success in solving
the problem, community land trusts (now over 200 in the USA),

I found a web site that describes what a community land trust is, since I
had never heard of it before. The part that caught my attention was the
part that said, "Community land trusts typically acquire and hold land, but
sell off any residential or commercial buildings which are on the land."
That is basically what the large land owners in Hawaii did, they never sold
the land, they leased that land, but you owned the building the land was on.
That whole idea which does help, has been widely unpopular in Hawaii. The
reason is very simple, people want to own the land, because when you own the
land, no one can change the rules on you.


sweat equity approaches such as that used by Habitat for Humanity,

I can see nothing wrong with what Habitat for Hunaity does, but they are not
going to put a dent into the housing problem...

and
workforce housing approaches that have emerged in the last few years. All
work by removing some element of the cost, either by donation of time or
money, by taxing in some fashion to subsidize housing, or by financing by
local businesses or public services to assure housing for their employees.
When the gap becomes too large, a combination of approaches are needed and
in our case public support in the form of a tax is now unavoidable. In
addition, the most successful programs index resale prices (gasp) to
assure that the community investment is protected against the rapid
inflation of real estate prices.

What you have listed is not going to solve the problem, it won't even put a
significant dent into the problem

The typical arguments are that reducing taxes or increasing salaries will
solve the problem. They don't once the gap becomes too large. For us,
the problem is most severe for skilled workers in the service sector.
This sector is approximately 9% of our workforce and is essential to
maintain the infrastructure. Most of their salaries cannot be increased
without increasing taxes. Lowering taxes makes the problem worse. Across
the whole workforce, in order to raise salaries high enough to make a
difference the cost of nearly everything increases and everyone suffers,
most especially seniors living on fixed income.

You mean the governemt service sector don't you? So, the ones who are
impacted the most are those people who work for the government, is that your
argument?


.

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