Subsidy for luxury housing?
I'm kind of horrified that the city is even considering giving a luxury housing developer a $5,000,000 subsidy. I just wrote my city councilman Brandon Coan:
Re: $52 million, 272-unit luxury apartment complex in NuLu
Right now housing priced over $500,000 is in excess inventory. The last number I heard was a 9-month supply. A balanced market has a six month supply. Conversely, housing priced under $500,000 has only a two month supply. A critical shortage. This would lead me to say that the city needs to be putting its incentive money toward non-luxury housing. I'd love to know if you are aware of any research that shows otherwise.
As you know, I negotiate real estate daily for a living. Not needing a deal puts the buyer or seller in the strongest position. Both parties seem to be trying to own that spot. Certain council members quoted below have drawn a line. The developer is likewise saying: “Flournoy Cos. is frankly not able to go forward...” [without a $5,000,000 incentive package].
The market and not the government should drive luxury development. If there isn't enough demand (and profit) the project should go away until there is.
I hope you will add your voice to these:
“I think 18 [lower cost units for workforce housing (teachers, police, firemen, etc)] is the floor,” Councilwoman Barbara Sexton Smith (D-4) said, noting her agreement with a similar comment made by Councilman Bill Hollander (D-9).
Both Hollander and Councilman Brent Ackerson (D-26) said they want downtown Louisville to house people earning a variety of incomes and requiring workforce housing in return for tax breaks is a way to help that.
Hope you're loving the job. Pete