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How do you know that financing the "apartment above the store" became so difficult? Do you have any data to back this up?
Have you ever heard the expression "correlation is not causation"?
I remember the 1950s, by the end of that decade I was 10 years old. We lived in a small-ish mill town. Very few business owners lived "above the store" in the downtown area. You have to have a lot more than a building where you can live above your business to open a deli.
If the purpose of the FHA was to increase home ownership, it makes perfect sense that such buildings were excluded. Small business owners are not the "average person".
How do I know? Because I know people who've tried to do it and I know of people that have formed an organization to try and help people combat all the hurdles thrown in front of them. (to be fair, it is more than just financing...you have local zoning and other regulations that get in the way also).
This is a very real issue and anyone that has tried to build anything like this, knows it firsthand:
...except you are not being a messenger. A messenger simply forwards or delivers something authored by a source.
You are providing your own opinion. That is different so the "don't shoot the messenger" saying isn't accurate here.
This:
Quote:
Originally Posted by Katarina Witt
A lot of these Depression-era programs were designed to make jobs for people as well. If home ownership was made easier, it would mean more jobs for construction workers.
is factual. It's the same with the old "surplus food" program, which morphed into the food stamp program and now the SNAP program. One purpose is to give farmers markets for their crops.
How do I know? Because I know people who've tried to do it and I know of people that have formed an organization to try and help people combat all the hurdles thrown in front of them. (to be fair, it is more than just financing...you have local zoning and other regulations that get in the way also).
This is a very real issue and anyone that has tried to build anything like this, knows it firsthand:
Basically the same hurdles thrown in front of any development. You might, here, skate under CEQA which would be a huge hurdle that larger developers developing larger projects cannot. It really isn't particularly burdensome for small projects. It's just burdensome for everyone. There aren't any special rules that make it harder for developing little projects that aren't big enough for someone else to take interest in. It's actually the opposite. As the project gets larger, the burden grows. It's just that those small projects are often too small for anyone with the expertise and financial backing to bother with so they don't happen.
Basically the same hurdles thrown in front of any development. You might, here, skate under CEQA which would be a huge hurdle that larger developers developing larger projects cannot. It really isn't particularly burdensome for small projects. It's just burdensome for everyone. There aren't any special rules that make it harder for developing little projects that aren't big enough for someone else to take interest in. It's actually the opposite. As the project gets larger, the burden grows. It's just that those small projects are often too small for anyone with the expertise and financial backing to bother with so they don't happen.
That type of housing is not available because getting financing became so difficult. We can't judge the demand today because quite frankly, no one could (or wants to) build it. Consequently (and a bit of a tangent) , we have fewer and fewer unique local small business owners that used to be able to boot-strap starting a business - shop at street-level, lived upstairs (or in back). Eventually he/she was able to build a house and then rent the upstairs for additional income. That vacuum that was created is now filled up with national chains of every size. The person that in the past was able to open up a deli in his hometown, is now unfortunately the manager of his neighborhood Subway. That hurts the local economy in many ways.
Sacramento has had quite a number of apartments over retail projects in the past ten years.
I seem to remember one of the points your hero making was how his little downtown was mostly empty because no one wanted to live in all the apartments over retail that existed, so it's rather strange to me to be getting one's panties twisted up about lending to build more of what people don't want. Certainly, there's parts of the country where there is demand for residential over retail and it's prevented by zoning. If that's an issue, take it up at the local zoning level. Don't pull a McConnell and blame local zoning on the suburbs. Some criticism can fairly be targeted at the FHA for its own restrictive lending practices, but at the end of the day the FHA is a small percentage of total lending. Should it change? Maybe. But the FHA is a massive program myriad in bureaucratic red tape. Always has been, always will be. It's a one-size fits all program, and when the one size includes a huge number of retail over residential that is vacant because no one wants to live there the rules do make sense.
Fact is, small business receives preferential treatment. At basically every level of government, there are policies designed to lighten the regulations and streamline the bureaucracy for small business. They are given preferential treatment. There's also government programs to help subsidize and encourage small business loans. Both treatment that Subway, being a franchise, would typically not qualify for. Yet the small business owner who opened the subway, despite not getting that treatment, opened a Subway. The manger who could open a non-franchise deli did not. So it goes.
Well, you quoted me and then talked about the "broken window fallacy", one with which I am not familiar, BTW.
The broken window fallacy, not to be confused with the broken window theory, is all about the fallacious argument that breaking windows and causing destruction, generally, is beneficial for the economy because it puts laborers to work. Knock something down, now you need a worker to put that back together. But, had this not been broken, the owner may have spent their money elsewhere, doing newly beneficial things. A repair only represents a return to the status quo, not an improvement over it.
The general idea is that economic activity for the sake of economic activity is not economic growth, just a cannibalization of existing resources.
Basically the same hurdles thrown in front of any development. You might, here, skate under CEQA which would be a huge hurdle that larger developers developing larger projects cannot. It really isn't particularly burdensome for small projects. It's just burdensome for everyone. There aren't any special rules that make it harder for developing little projects that aren't big enough for someone else to take interest in. It's actually the opposite. As the project gets larger, the burden grows. It's just that those small projects are often too small for anyone with the expertise and financial backing to bother with so they don't happen.
Agreed.
Further, if a developer plays by the federal rules, small, 3+1 two-story developments are straightforward. But these are small, so large developers don't mess with them.
It's usually city rules (or, in some regions, land costs) that get in the way, ie, zoning and permitting. Then there's the reality that large chains have preferences for built forms: malls, strip malls, stand-alone buildings. Don't have a large chain tenant? Lenders may offer less favorable terms because chains are viewed as less risky.
Sacramento has had quite a number of apartments over retail projects in the past ten years.
I seem to remember one of the points your hero making was how his little downtown was mostly empty because no one wanted to live in all the apartments over retail that existed, so it's rather strange to me to be getting one's panties twisted up about lending to build more of what people don't want. Certainly, there's parts of the country where there is demand for residential over retail and it's prevented by zoning. If that's an issue, take it up at the local zoning level. Don't pull a McConnell and blame local zoning on the suburbs. Some criticism can fairly be targeted at the FHA for its own restrictive lending practices, but at the end of the day the FHA is a small percentage of total lending. Should it change? Maybe. But the FHA is a massive program myriad in bureaucratic red tape. Always has been, always will be. It's a one-size fits all program, and when the one size includes a huge number of retail over residential that is vacant because no one wants to live there the rules do make sense.
Fact is, small business receives preferential treatment. At basically every level of government, there are policies designed to lighten the regulations and streamline the bureaucracy for small business. They are given preferential treatment. There's also government programs to help subsidize and encourage small business loans. Both treatment that Subway, being a franchise, would typically not qualify for. Yet the small business owner who opened the subway, despite not getting that treatment, opened a Subway. The manger who could open a non-franchise deli did not. So it goes.
OK, but is the retail owned by the apartment dwellers? I get the impression that ST is talking about a business with the owner's apartment above it, and the owner owns both the business and the apt. I think what you're describing is businesses on the first floor, and rental apartments above, which are totally unrelated to the business.
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