"It's not what we do."    

COLUMBIA, Mo 12/15/15 (Beat Byte) -- "The City of Columbia has no experience, competency or capacity to manage residential housing, or the financial impact of it," said Columbia Mayor Bob McDavid last Monday. 

He wanted to "express skepticism for the record" about City Hall's new role as designer, developer, builder, and manager of affordable housing. 

"Though I appreciate the altruism, I don’t feel the City of Columbia has shown any competency or capacity to design residential housing," McDavid repeated, to city manager Mike Matthes and community development director Tim Teddy.   "It’s not what we do." 

A Columbia Heart Beat story about city government's plans for a bastardized land trust on Lynn Street apparently prompted McDavid to pull a related issue off the city's automatic consent agenda for discussion (video, about 1:57). 

The "Lynn Street Cottage" plan would sell $125,000 "cottages" to low-income home-owners without the land beneath or around them, which City Hall would retain.    The high price surprised the Mayor, who envisioned cottage owners under water from the get-go.      

"You build a $125,000 cottage and what can the client sell it for?"  he said.   "You’ve got $70,000 homes across the street."

"I don’t feel the City of Columbia has shown any competency
or capacity to design residential housing."
-- Mayor Bob McDavid

Mischaracterized by city staffers as a "community land trust," or CLT, the Lynn Street Cottages instead resemble "historical sharecropping, with the benefits going to the landowner" City Hall, Heart Beat reader Salif Auster observed.   A traditional CLT invests land ownership into the homeowners via a non-profit.  

The city's ownership of the land, its mortgage guarantees, and the high cost of the homes relative to surrounding properties (which destroys homeowner equity) effectively turns the Lynn Street Cottages into rentals, McDavid said, echoing a sentiment expressed by a Heart Beat source.  

"When you have no real equity in a home, it’s like a rental.   It’s really not ownership," McDavid said.   "Once we do this, we’re in the property management business.   Then we're putting people with no experience in property management in the property management business."

Sixth Ward Councilwoman Betsy Peters, who owns and manages rental property, agreed.  "I’m not sure I want the city to get into the rental property business," she said.  

McDavid found the Lynn Street plan troubling from several other perspectives, including its financial impact on taxpayers.    

"$200,000 in surplus funds is going to fund four $50,000 first mortgages," McDavid said.   "Whoever gets these houses gets a gift of $50,000 equity." 

Providence Bank will also "carry a $75,000 mortgage on each house, for a total of $300,000," McDavid added.   "I was told the city is guaranteeing that mortgage.    So, in fact, the city’s liability is not just $200,000, it’s $500,000." 

The idea of city government becoming a mortgage guarantor made McDavid and other Council members uneasy.   "This Council is going to have to, somewhere down the line, put some mom who can’t pay her mortgage and her family out on the street," McDavid said.  

"We'll have to evict someone," Fifth Ward Councilwoman Laura Nauser said.

"I don’t want to deal with people who are delinquent," McDavid continued.   "I don’t want to deal with people who default." 

"So this Council is going to have to, somewhere down the line,
put some mom who can’t pay her mortgage and her family out on the street."
-- Mayor Bob McDavid

Finally, McDavid objected to city staff deciding "out of our 20,000 citizens in poverty, which four families get the benefit of $50,000 in equity and a city-guaranteed mortgage."

"I appreciate the altruistic motives," he reiterated.   "But I am skeptical that the city is getting into the property management and construction business where it does not have any core competence."