Editor's note: Based on erroneous information the Source received, a previous version of this story stated that the HFA was asking for $1.5 million needed to cover its total operating expenses.
July 16, 2004 – The Housing Finance Authority has one major problem. It has almost no affordable land available to sell to would-be homeowners.
Clifford Graham, HFA executive director, told the Senate Finance Committee on Thursday afternoon that "the rising cost of construction and land in the territory coupled with the stagnant income of our clients [is] beginning to make the task of producing affordable housing difficult."
Graham was testifying in the committee's continuing series of budget hearings chaired by Sen. Adlah "Foncie" Donastorg, which will conclude on July 30. The authority's annual operating expenses are about $1.5 million. For fiscal year 2004, the agency had to generate $1 million of that amount from its housing units. Its government funding was $450,000, the same amount proposed in the administration’s proposed FY2005 budget.
The authority is prepared to accept the $450,000 as recommended by the governor to help underwrite the cost of the affordable housing program, Graham said.
Real estate professionals in both districts have repeatedly said in the last few months that there is no affordable land in the territory. The one bright spot in the authority's future is the Home Ownership Act of 2004, which passed the full Senate Tuesday and will be forwarded to the governor for his action.
In a June 4 meeting of the Senate Housing, Parks and Recreation Committee, Rosemary Sauter-Frett, president of the V.I. Board of Realtors, said she had 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.
Graham said at that same meeting that he has 3,300 people on a waiting list for homes.
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 now $462,528.
The Home Ownership Act, introduced by Sen. Emmett Hansen II, calls for the construction of 2,500 homes over 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 homebuyers 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.
The legislation hinges on the government getting land for housing sites. It allows landowners with delinquent property taxes to convey the property of not less than three acres to the government in lieu of the taxes. Another option the bill proposes would allow a property owner, in exchange for conveying not less than three acres of land to the government, to receive a 20-year tax rebate. (See "Senate Committee Approves Affordable Homes Bill".)
Law Revision Commission
Commission on Uniform State Laws
The Finance Committee also heard the budget request of the Law Revision Commission, presented by Sen. Shawn-Michael Malone, who is an ex-officio member of the commission by virtue of his chairmanship of the Government Operations Committee.
Malone submitted a request for an appropriation of $215,410 for FY 2005, an increase of $45,410 over FY 2004.
Attorney Tom Bolt was scheduled to appear on behalf of the Commission on Uniform State Laws, which he chairs. However, Donastorg announced Bolt was unable to attend the hearing due to a delayed flight returning to St. Thomas. Donastorg did not indicate whether he would reschedule Bolt's appearance.
Finance Committee members present at the session in addition to Donastorg were Sens. Roosevelt David and Louis Hill. Also attending were Malone and Sen. Celestino A. White Sr., who are not members of the committee.
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