June 4, 2004 – The proposed Homeownership Act of 2004 introduced by Sen. Emmett Hansen II was approved unanimously Thursday night by the Senate Housing, Parks and Recreation Committee, which he chairs. And it got a big hand from representatives of the private sector and other government agencies.
It is no secret that the Virgin Islands has a critical lack of affordable housing. This was illustrated dramatically by figures given by Rosemary Sauter-Frett, president of the V.I. Board of Realtors; Clifford Graham, executive director of the Housing Finance Authority; and Housing, Parks and Recreation Commissioner Ira Hobson.
"There is a major lack of affordable housing in the territory," Sauter-Frett said. She said she has a waiting list of 67 people who can afford to buy homes in the $70,000 to $250,000 price range, and nothing to sell. And, she said, hers is only one of 33 real estate firms on St. Thomas.
On St. John, the average selling price of homes in 2003 was $1.04 million, a 53 percent increase from 2002, Sauter-Frett told the senators.
On St. Croix, the average home selling price was $331,166 in 2003; it has jumped to $436,067 this year.
On St. Thomas, the average was $386,680 in 2003, and it's up to $462,528 for this year, so far.
Hansen's legislation calls for the construction of 2,500 homes in five years, at the rate of 500 per year 350 on St. Croix, 100 on St. Thomas and 50 on St. John. They would sell for between $60,000 and $180,00, with the average price being $120,000.
The homes would be available to first-time home buyers and people who have lost their homes through foreclosure or divorce in the last seven years and who have been V.I. residents for at least five years.
Hobson said: "If Virgin Islanders don't build a home in the next five or 10 years, they will never, ever be able to own their own home." He said he has 17 homes available on St. Croix right now, with 125 applicants wanting them.
Graham said he has 3,300 people on a waiting list for homes. In answer to a query from Hansen, he said that over five years, $300 million could be generated from $60 million annually in home sales. Construction costs, materials purchase, property and stamp taxes, and employee payroll taxes could bring in another $300 million, he said.
"And the money stays here," Hansen commented.
Tax Assessor Roy Martin told the committee that from 2,500 houses the government could realize about $8.1 million a year in property taxes on the structures and another $500,000 on the plots of land.
Speaking on the telephone Friday morning, Hansen said: "This one bill alone could cover the deficit over the next five years without raising taxes or imposing new taxes."
Gov. Charles W. Turnbull said in Tuesday that the territory currently has a $92.4 deficit.
Options Proposed for Land Acquisition
Hansen's bill hinges on the government getting land for housing sites. He is proposing three ways this can be done:
– An real property owner delinquent in tax payments could, in lieu of having that property sold at auction, convey contiguous property of not less than three acres to the government.
– A property owner could, in exchange for conveying not less than three acres of land to the government, receive a 20-year tax rebate.
– The Housing Finance Authority would identify for transfer and conveyance suitable existing government property that is not being utilized.
The homeownership program would be administered by the HFA, which would contract with developers, contractors and builders. Included in Hansen's proposed regulations for developers is a requirement that at least 90 percent of their employees be local residents.
The only objection to the bill was raised by a committee member, Sen. Celestino A. White Sr., who chaired the committee for years and proclaims himself the Senate's "housing czar."
White took issue with a provision stipulating that 10 percent of the homes be set aside each for purchase by teachers, police personnel, health care professionals and qualifying veterans. The other 60 percent would be available for purchase by anyone who qualifies for the program.
White said this could put developers off. "They could be stuck," he said, and that might discourage them from buying into the program.
Hansen said on Friday that he doesn't think that is much of a problem. "What we want to do is have something to offer teachers and other professionals," he said. "If that's a problem, then I'm not opposed to it being changed, because the major tenants of the bill won't be affected."
White said at the hearing that he was anxious for the bill to be forwarded to the Rules Committee, where it could receive further "tweaking." In the end, he moved for the vote on it, echoing Hobson's assessment: "The longer we fail to act, the more prices go up."
Private, Public Sources of Financing Seen
Anthony Weeks, regional manager of Columbia Equities Ltd., had encouraging words for potential homeowners in the territory. Weeks collaborated with Hansen in presenting a housing fair in March on both University of the Virgin Islands campuses.
Weeks said his company will "bring $300 million to the V.I. before this decade is out. We are a vehicle to bring capital to this market. Education is the key." At the housing fairs, he said, more than 50 percent of the homeownership applicants were pre-qualified for the program. He said findings from the fair confirmed the lack of inventory of affordable homes in the territory.
There is federal assistance available, as well. Hansen earlier this year secured participation in the "American Dream Down Payment Initiative" for the Virgin Islands. The federal initiative to assist first-time homeowners was to have been limited to communities of at least 150,000 residents.
The program 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 said then. See "Aspiring V.I. Homeowners Find Opening Doors".)
Hansen was taken aback earlier this week when the governor announced as part of the administration's proposed fiscal year 2005 budget that he would seek to repeal Hansen's Infrastructure Act, which became law last fall through a Senate override of Turnbull's veto. According to Hansen, the legislation, which earmarks portions of property taxes for street lighting, potable water service and road maintenance, is critical to setting up water and sewer lines, as well as connecting roads for any new development.
However, Hansen said on Friday: "The governor can send down the repeal legislation. Since the override was unanimous, I am confident there will be no support for his repealing the legislation." See "Senator: Governor Killing Home Ownership Dream".)
Three committee members — Hansen, Sen. David Jones and White — attended the meeting. Sens. Luther Renee and Usie Richards were excused. The bill will next be heard in the Rules Committee.
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