Mar. 21, 2004 Sen. Emmett Hansen II had potential good news Friday for the more than 100 Virgin Islanders who were prequalified for mortgages at the housing fairs held by the senator earlier this month.
Hansen, who chairs the Housing, Parks and Recreation Committee, is introducing legislation that will pave the way for these potential homeowners to actually own a home. He said, "The answer has been under our feet all the time."
That "answer" is land, government land. "The greatest resource in the world is land, and we've been allowing ours to lay fallow for mongoose and iguanas, rather than using it to provide for our people," he said.
A longtime advocate for collecting delinquent property taxes owed to the government his legislation last year to farm out the collection to a private vendor failed Hansen has come up with a new concept; one which he says will inject life into the territory's moribund economy while helping delinquent V.I. taxpayers. Those uncollected, delinquent taxes are estimated anywhere from $80 million to $120 million, he said.
Speaking by phone on Sunday, Hansen described his proposed 2004 Homeownership Act, which he said will allow the V. I. government to build 500 affordable homes a year for the next five years.
"With a median cost of $120,000 for homes, the initiative amounts to $300 million in economic activity over the next five years," Hansen said.
The legislation is threefold:
– It provides for delinquent taxpayers to deed land at least equal in value to their tax indebtedness to the government.
– It allows for property owners to donate at least three acres of land to the government exclusively for affordable housing. Those property owners would receive tax rebates on double the amount of land donated, however, the land must be contiguous. This, Hansen said, would prevent persons donating inferior land and receiving tax rebates on prime property.
– The government will identify land from its current holding, which will be designated for affordable home ownership.
Hansen said Sunday that the government owns "thousands upon thousands of acres of land." Nobody seems to have the exact amount, but it has been estimated at $385 million. "And nobody is doing anything with it," Hansen said.
Hansen said, "Some may believe that we are taking something from the government, but actually we are expanding the tax base by creating more homeowners, collecting on the long overdue property tax indebtedness, and not taking the property away from the owners. And [we're doing this] by stimulating the labor market and the consumer market."
The act will also bring homeownership down to affordable levels. Though Hansen is pleased with the influx of EDC (Economic Development Commission) companies into the territory, he said the flip side of the infusion is that "the housing market has been inflated past the buying ability of most residents."
Realtor Rosemary Sauter, speaking at the St. Thomas homeowner fair, said there is "zero" affordable housing on St. Thomas. (See "Aspiring V.I. homeowners find opening doors".) The situation is the same on St. Croix, Hansen said.
According to Hansen, the cost of land is a major consideration for prospective homeowners. Consequently, Hansen says that by making government land available, "what you are doing is actually decreasing the cost of the home by $15,000 to $30,000. For a lot of people that's the difference between owning and not owning a home."
With somewhere between 100 and 130 persons at the housing fair who are prequalified for mortgages, Hansen said that means that homes proposed to be built are already spoken for. He said the local government will not have to fund home-building activities. "Anyone can log onto the Fannie Mae, Federal Housing Authority, or Housing and Urban Development (HUD) Web sites and see how other communities are utilizing outside capital to fund homeownership initiatives in their communities. Many of these mechanisms are already here and not being utilized; I plan to change that."
Hansen has made several trips to Washington, D.C., in recent months to secure a piece of the American Dream Downpayment Initiative for the Virgin Islands. The federal program to assist first-time homeowners was to have been limited to communities of at least 150,000 residents. The initiative opens the door to home ownership for more low-income and minority families by helping to offset the up-front costs, providing families an average of $5,000 toward down payment or closing costs. The Virgin Islands has been granted $1.3 million for this purpose.
Hansen visited HUD Assistant Secretary Roy A. Bernardi in Washington and was able to get the territory included in the Bush administration initiative. And he was able to persuade Bernardi to participate in the fair and also deliver the keynote address the first day of the St. Croix fair.
Recently, Hansen has taken some flak on the Dream Initiative. Clifford Graham, V.I. Housing Finance Authority executive director, issued a statement last week saying Congress left the V.I. out of the program.
In response to Graham's charge, Hansen aired parts of Bernardi's speech during the Thursday night broadcast of Channel 8 News. Bernardi said, "In December of 2003, we at HUD were fortunate on Dec. 16 to have President Bush sign the American Dream Downpayment Initiative. And that down payment initiative will provide 2003 dollars, monies for the Virgin Islands to utilize to assist people who are buying their home for the first time. And you'll be hearing more about that program as we come into April and start distributing that money."
According to Hansen, Bernardi's speech "speaks for itself."
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